The markets are galloping, from East to West. On both sides of the Atlantic, the positive signs of the economies are multiplying. The ball of billionaire mergers is back in fashion on Wall Street, Europe is celebrating the comeback of the banks. The difficulties for the agreement on crude oil fade into the background while, at least for now, the recovery of the dollar against the euro more than compensates for the worries about the now endemic crisis of the pound. It's not hard to predict that attention will soon turn again to the increasingly probable rise in US rates. But for now the "game in the city" that fascinates the stock exchanges, at least in Italy, concerns Mps, the protagonist today of a historic day.
After yesterday's board meeting, the first elements of the new industrial plan of Monte Paschi approved unanimously yesterday are coming out. The extraordinary shareholders' meeting to give the go-ahead for the capital increase of up to 5 billion euros has been called for November 24th. The operation will be with "exclusion or limitation of the option right". The delegation to the Board of Directors for the increase must "be exercised no later than 30 June". Also envisaged is the grouping of shares in the ratio of one to one hundred.
MPS AT THE END OF THE PLAN, PROFITS OF 1,1 BILLION
Here is a summary of the main news ahead of the meeting with analysts and the press conference:
– 2016 loss of €4,8 billion after credit risk provisions of €3,63 billion at the end of 2016.
– Reduction of 2.600 seats, closure of 500 branches.
– Cet 1 phased to 13,5% in 2019
- Deconsolidation of 28,5 billion euro of doubtful loans, of which 27,6 billion non-performing loans through transfer to vehicle for 9,1 billion euro.
– Mps received a purchase offer from ICBPI for merchant acquiring activities for 520 million euro.
– The Bank sees net profit at the end of the plan at 1,1 billion, more than 11%.
After yesterday's very strong increases (+28,3%, to 0,3470 euros, double the historical low reached on 7 October at 0,1620 euros, on the wave of trading that involved 13% of the capital) , the market appreciates and sabets again. The stock immediately started on the upside and at 9,19 in the morning it went through the volatility auction, started running again +20% and returned to volatility. Capitalisation, which had already slipped below 500 million, has risen to over 1 billion. All under the pressure of the rumors about the names of the partners to be involved in the capital increase: George Soros, John Paulson, the Chinese central bank and the sovereign wealth funds of Kuwait and Qatar.
ALSO NETFLIX IN THE SIGHT OF AT&T. THE MERGER CLAPS WALL STREET
In the meantime, Meteo Borsa has many other news to register. Contrasted Asian markets. Tokyo (+0,6%) and Sidney (+0,6%) rose under the push of the dollar. Hong Kong and Shanghai were weak, both -0,1%. Meanwhile, the yuan continues to fall to 6,7885 against the dollar.
The American stock market closed higher, but withdrew from the highs of the session. S&P500 index +0,5% to 2.151 points, reaching 2.155 points during the day. To beat the historic record reached in mid-August, the benchmark index need only go up by 2%. The Dow Jones gained 0,4%.
The opposition of Donald Trump and, more nuanced, of Hillary Clinton to the mega deal worth 85,4 billion dollars between AT&T (-1,6%) and Time Warner (-2,2%) held back the two protagonists of the wedding of the century. Even more important is the rejection of the deal by Moody's and Standatd & Poor's: for the rating agencies, the new colossus is destined to navigate debts without appreciable advantages. Regardless of the criticisms, however, AT&T doubles the stakes: the Texan giant is about to launch an offer on Netflix with the intention of building, together with Time Warner, the most powerful media group in history.
The protagonists of other mergers are in great turmoil: B/E Aerospace rose by 15,4% after the purchase offer (6,4 billion) by Rockwell Collins (-6,9%). Ameritrade -2,9% after advances towards Scottrade.
Another driver of the increase are the quarterly. Waiting for the big names (Apple +0,9% and Boeing +2,3% in the lead) T Mobil stands out, +7,8% after the accounts. In the post-exchange Visa released the data of the fourth quarter of its fiscal year. Net income was $1,93 billion, up 28% year over year. The credit card giant reported earnings per share of $0,78: the consensus was expecting $0,73. After the Stock Exchange, the stock fell by 0,9%. Still on Microsoft (+2,2%).
Oil fluctuates around $50 a barrel. Investors are wondering about the consequences of Iraq's request, engaged in the war against ISIS in the north of the country, for an exemption from the agreements recently signed with OPEC to limit production. WTI crude is traded at 50,17 dollars a barrel (-1,4%), while Brent loses 1% to 51,25 dollars a barrel. Oils thwarted: Chevron -0,2%, Hulliburton -0,2%, Exxon +0,5%
The start of the week in strong acceleration for the stock exchanges of the Old Continent, which score substantial gains thanks to the performance of the PMI indices of the Eurozone.
MILAN +0,8%. ALTOLÀ VALLONE IN CANADA
Milan closed yesterday's session up 0,81%, at 17.306 points, after having reached a maximum of 17.385. Paris +0,42% and Frankfurt +0,54%. The performance of Madrid was more consistent (+1,38%), at its highest for six months, supported by the forecast of the formation of a government between Popular and Socialists after the electoral deadlock that has lasted for a year. Banco Santander +4%.
The City's concerns over the loss of the European financial passport weighed on the London listing (-0,46%). Wallonia's no to the Ceta agreement between the EU and Canada sent the trade negotiations up in smoke, despite the support of 28 countries, including Belgium.
CHINA: STOP IN GERMANY, EU DIFFICULTIES FOR SYNGENTA
Thud in Zurich by the agrochemical giant Syngenta (-5%). It emerged that ChemChina (Pirelli's controlling shareholder) did not present the authorization to the European antitrust authorities within the established time frame. It is not clear whether it is a bureaucratic hitch or something more relevant, capable of blowing up the acquisition. German authorities have vetoed the Chinese purchase of Aixtron, a microchip company. Beijing has bought an average of one German company a week since January.
THURSDAY 6-MONTH BOT AUCTION FOR 6 BILLION
On the debt market yesterday was dominated by Spain: at the end of the session the Italy/Germany yield premium was worth 137 basis points against the 108 of the Bono/Bund spread. Sigh of relief for Portugal: the Dbrs agency kept its rating unchanged, avoiding a downgrade which would have prevented access to loans from the ECB. In the evening came the announcement of the six-month Bot auction on Thursday 27 October: 6 billion against the 6,6 expiring.
FLY UNICREDIT. DEL VECCHIO: THE INCREASE? I DON'T KNOW IF IT'S USEFUL
Not only Monte Paschi. The financial sector was among the brightest. In Europe, banks stood out, with the sector index rising by 1,5%. Insurance companies go up by 1,3%. Unicredit is on the rise (+4%). Leonardo Del Vecchio, a shareholder of UniCredit with about 2%, said yesterday that he does not believe that the bank needs a capital increase. Ubi Banca +3,4%, Banca Popolare dell'Emilia Romagna +3,3%. The insurance companies were also highlighted, in particular UnipolSai (+2%) and Generali (+1,7%). Among the asset management companies, Azimut and Poste Italiane (+1%). Banca Mediolanum (+2%). Effervescent Anima (+4%) and Banca Generali (+4%).
LUXOPTICAL: TURNOVER +3,2%. “IN 2017 WE WILL DO MORE”
Luxottica +1,74%. The society ended the third quarter with a turnover of 2,22 billion euros, an increase of 3,2%. In the first nine months, turnover totaled 6,94 billion (+1,8%). As indicated in a note, the outlook for 2016 is confirmed. "We believe we can accelerate the growth of the group from 2017, keeping it healthy and sustainable in the long term", commented Leonardo Del Vecchio, executive chairman of Luxottica, and Massimo Vian, product managing director. “We are satisfied with the quality of growth in the quarter and the vitality of our business in markets such as Europe, Latin America and Southeast Asia: these results are even more significant because they were achieved in a phase of heavy investment and intense integration work and organizational simplification, and in an uncertain macroeconomic scenario”.
ITALGAS ON THE STOCK EXCHANGE ON 7 NOVEMBER. FCA ACCOUNTS TODAY
The Italgas road show got underway in London and will return to Piazza Affari on 7 November when its separation from Snam becomes effective (-1,15%). The company is about to go public with an estimated capitalization of between 3,5 and 4 billion euros, 2016 revenues exceeding one billion, an ebitda margin of around 65% and an ebit/Rab ratio of 6%, which will have to guarantee a higher margin high relative to the cost of capital. Post-demerger the shareholding will be made up of Cdp Reti & Cdp Gas (26%), Snam (13,5%) and free float (60,5%). Shareholders already know they can count on a base dividend of 20 cents.
The auto sector did well: Fiat Chrysler +1,5% (today's quarterly), Ferrari +1%. Brilliant Telecom Italia (+3,3%). Mediaset +1,3%.
