The dramatic Monte Paschi match, but also the announcement of the sale of Pioneer to Amundi by UniCredit on the eve of the maxi capital increase which will be announced tomorrow. The reaction of the markets to the cut in oil production among non-OPEC countries and to the prospect of an axis between Putin's Russia and the US after the surprise appointment of Rex Wayne Tillerson, former number one at Exxon and friend of the Russian president , to US Secretary of State. Without forgetting the quick solution to the Italian government crisis.
But the key appointment will be the Fed meeting on the rate increase which will be communicated on 14 December, at the end of the meeting of the monetary committee of the US central bank. An obvious but historic decision: the era of low rates is about to make room for the increases necessary to finance the investments of Trumpeconomics and the public deficits caused by tax cuts.
The pressure on US T-bonds continues this morning. The week restarts with the Treasury Bill at 2,49% and the Bund at 0,36%. The BTP trades at 2,03%. The euro was little moved at 1,056 against the dollar, depreciating both Friday and Thursday. Gold drops to levels not seen since February at 1.158 dollars an ounce.
Asian stock exchanges are mixed. At the end of the session, the Tokyo Nikkei index rose by 0,9%. Weighted down by the real estate company sector and by the collapse of some insurance companies, the Chinese Stock Exchanges are retreating. Hong Kong -1,1%, Shanghai -1,8%, Taipei -1,4%. The Kospi index of Seoul is slightly up (+0,2%), the Indian stock market is down: Bse Sensex -0,4%.
Futures signal a good opening up, around half a percentage point, on the main European markets.
MPS ATTEMPTS THE REFUND, UNICREDIT THE CONFIRMATION OF THE RALLY
Separate discussion for Milan. The Italian Stock Exchange, on whose stage both the last act of the Monte Paschi crisis and the rebirth of Unicredit are about to be staged, after a remake with still unpredictable implications. Despite the most brilliant week of the last five years (Ftse Mib index +7%) Piazza Affari lags far behind the other European Stock Exchanges: -14,5% from the beginning of the year compared to +2,7% in Paris and + 4,2% of Frankfurt.
AN EXTRAORDINARY DIVIDEND FOR MUSTIER
A last-minute recovery of the banking sector is made possible by the run-up by Unicredit (+20% in the last week). This morning one of the last acts, undoubtedly the most challenging, of the Unicredit sales campaign will be announced: Pioneer, the asset management company of the institute, the second power of Italian asset management, passes to the French Amundi (Crédit Agricole and Société Génerale ) for just over 4 billion, including an extraordinary dividend for the Italian seller.
The operation falls less than a week after the sale of BankPekao (about 3 billion) and a package of NPLs. Tomorrow in London Jean-Pierre Mustier will unveil the contours of the new business plan, which includes, alongside cost cuts and governance reform, the proposal for a capital increase in the order of 13-14 billion which will only be partially covered by the current shareholders: therefore, the change of structure is inevitable.
BUT PUBLIC INTERVENTION IS READY FOR SIENA
Much more dramatic is the story of Monte Paschi, which restarts on the Stock Exchange from -10,55% on Friday. The board of directors of the bank, convened yesterday evening to examine the situation after the still unofficial refusal of the EU Supervisory Authority to extend the execution of the capital increase to 20 January, decided to insist on the attempt to raise 5 billion on the market within year, without having to resort to state intervention.
It was therefore decided to reopen the conversion of subordinated bonds into shares with the aim of also involving retail customers, counting on the necessary authorizations from Consob to derogate from the provisions of Mifid 2 on the risk profile of the savers involved. Indeed, the plan developed by JP Morgan and Mediobanca envisages the reopening of the stock-bond exchange offer already aimed at institutions (1 billion in capital raised) also to 140 MPS customers who subscribed to the offer (2,1 billion ) in 2008. In this way, another 1-1,5 billion could be raised.
Furthermore, after the resolution of the government crisis in record time, the sovereign wealth fund of Qatar could make a comeback, which could provide another billion. At this point, the bank should perform the last miracle: to convince private equity and other large investors to contribute 1,5-2 billion. If the institute fails to implement the plan in the next 20 days, including Christmas, government sources have already said that a public rescue plan is ready with inevitable repercussions on shareholders and bondholders, albeit limited by state intervention.
THE TREASURY OFFERS 4,75 BILLION BOTS
In this high-tension climate (but soothed by the zip closure of the political crisis) the Treasury will today make available to investors 4,75 billion euro in 12-month BOTs, compared to the 5,5 billion maturing, in a placement which probably, given the context in which it will take place, will see the yields of the Annual Bond up compared to the -0,210% of the November placement. In closing, on the gray market of Mts, the yield of the Bond that will go to auction exchanges between -0,176% and -0,195%.
MURDOCH'S PUSH ON MEDIASET
The banking sector will absorb much of the market's attention. But there are other issues to report. Mediaset (+3% on Friday) could take advantage of the turmoil around the media sector after Sky, 39% controlled by the Murdoch group announced that it had been approached by Twenty-First Century Fox, another company of the Australian tycoon, in view of a purchase offer. Fox's offer is equal to 12,82 euros per share in cash and represents a premium of 36,2% on the last quotation. The offer values Sky at 22,04 billion euros.
OIL AT THE HIGHEST SINCE JULY, ENI INVESTOR DAY IN NEW YORK TOMORROW
The oil market is on the move. Brent prices rose this morning to 57,89 dollars, the highest since July, as did WTI to 54,51 dollars. On Saturday the main non-OPEC producers, i.e. Azerbaijan, Mexico, Oman, as well as obviously Russia, agreed to reduce crude oil extractions by around 550.000 barrels, in addition to the 1,2 million barrel cut made by the cartel on 30 November.
The unknown factor, according to experts, lies in the attitude of US shale oil producers, who are more than competitive on prices over 50 dollars. But the appointment of Tillerson, a great friend of Vladimir Putin, as secretary of state shows that the new US administration aims to cooperate rather than compete with Moscow.
In this climate, ENI's investor day will be held on Tuesday in New York. The stock closed virtually unchanged on Friday (+0,1%). Noteworthy is the slump of Saipem (-4,2%) after losing a maxi-order for the Turk Stream. In Rome there will instead be the presentation of the World Energy Outlook (with Calenda and the top management of Enel Greco and Starace), the preliminary balance of the Unione Petrolifera for 2016.
Not just the US. A meeting of the heads of the Swiss Central Bank and the Bank of England is also scheduled. In both cases, no change in rates is expected. On the contrary, the central bank of Mexico will increase the cost of money for the fifth time in 2016 in an attempt to curb the fall against the dollar.
THE NEW ECONOMY GOES TO REPORT FROM TRUMP
To justify the increase in US rates there is the comfort of numbers. In November, American unemployment fell to 4,6% from 4,9%, to its lowest since 2007. Surprises also on the growth front, which in the third quarter recorded +3,2% compared to the expected 2,9%. the best result in recent years. Consumption drove the GDP, rising to +2,8% from the previous 2,1%. Retail sales should give another signal to that effect in the coming days, reflecting that the financial health of US households has improved.
Trump Tower is now at the center of the global economy. During the week it will finally be the turn of the Big names in the new economy to cross the threshold of the new center of power. So far, the digital economy has been neglected by the new president and by Wall Street, convinced that the new administration's immigration policy will create problems for Silicon Valley. But representatives of Alphabet, Apple and Facebook as well as Amazon's Jeff Bezos will arrive at the New York appointment. Among the Big names invited to the meeting with Trump there will also be Safra Catz, number two of Oracle, and Chuck Robbins, CEO of Cisco.
