FONSAI INCREASE, CONSOB SUPERVISES THE OVERDRAFT. CHINA WARMS ITS ENGINES: WEDNESDAY THE STIMULUS
Mario Monti returns from the mountains of Sun Valley, Idaho, with a new promotion by the Big Corporate USA. To fall back into European and Roman difficulties. Among the appointments of the week, the Eurogroup meeting stands out, which on Friday should give the green light to the aid package for Spain and an acceleration for the anti-spread shield, made even more urgent by the relegation decreed by Moody's which could follow similar moves by Fitch and S&P, given the negative outlook of both agencies.
There will be no Treasury auctions next week pending the latest round of bidding between July 27 and 30. Both Italy and Spain will not hold auctions in August. But between now and September 15, Italy will have to repay 70 billion between BOTs, CTZs and BTPs and place new securities for around 50 billion.
"Any attempt to say 'we are in solidarity but without controlling anything, without any compensation', will have no chance with me or with Germany". Thus Angela Merkel in an interview with the ZDF TV network. "If you have a common currency - she added - this means, of course, that in addition to the advantages there are obligations and that the political decisions of each individual member have an effect on the other countries".
Merkel's words serve to soften the hawks of her majority. At least 26 CDU deputies intend to reject aid to Spain during the parliamentary vote on Thursday 20. The measure, as has already happened for the ESM, will pass only thanks to the support of the SPD and the Greens.
The estimates of the International Monetary Fund on world growth will be released today. The forecast is that the outlook coming from Washington signals a further deterioration from the previous 3,5%.
"It must be very clear that the objective of a stable recovery of our economy is far from being achieved". These words by Premier Wen Jiabao, visiting Sichuan, have convinced operators that the stimulus package for the Chinese economy is approaching. The decision could be taken as early as Wednesday 18 according to the China Securities Journal.
The prospect of a package of expansionary measures from Beijing supported prices in the first session of the week, overcoming worries about the slowdown in profits in the second quarter. In Tokyo, the Nikkei 225 index marks +0,05%, Hong Kong rises by 0,19%.
In the meantime, the march in the prices of agricultural raw materials continues. Wheat futures climbed to their highest since 2008. The euro, by contrast, traded at new lows at 1,2240.
After JP Morgan's lower-than-expected losses, the US quarterly campaign is in full swing. During the week, the accounts of about a third of the companies that are part of the Dow Jones as well as about eighty of the listed companies of the S&P 500 will be announced. Today, in particular, it will be the turn of Citigroup; tomorrow to Johnson & Johnson, Coca Cola and Goldman Sachs; Wednesday at Bank of America, American Express and IBM. The forecasts are negative: only 5% increase compared to a year ago against 9,2% in April. But for the Big Eurostoxx 50 the estimates are even a drop of 9%.
This morning, after six months of exhausting negotiations, the capital increases of Fondiaria Sai (-18% in Friday's session) and by Unipol (-7,8%) for an amount of 1.100 million euros each.
The Fonsai increase provides for the issue of 916.895.448 ordinary shares at a price of 1 euro each (0,435 premium) offered as an option to shareholders at a rate of 225 new shares for every 1 already owned. The clash on the Terp is equal to 24,7% compared to the prices of July 5th. Unipol, on the other hand, will issue 422.851.420 new shares at a price of €2 at the rate of 20 new shares for every 1 already owned. The theoretical price per share is €1,17 for Fonsai and €2,5 for Unipol. For rights, treated separately, the theoretical value is €44 for Fonsai, €10 for Unipol.
Given the hyper-dilutive characteristics, Consob has set up accurate monitoring of trading to avoid short selling, which is already prohibited. The two operations will be supported by a guarantee syndicate of eleven banks which, given the complexity of the situation and the difficult moment of the markets, have been able to discount excellent conditions: the five foreign institutes (Ubs, Nomura, Deutsche Bank, Barclays and Crédit Suisse) will receive 24 million in the form of consultancy in addition to 4,8% of the global sum, equal to one hundred million each while Unicredit, Mediobanca and Unipol itself (which ensured the subscription of the Fonsai savings) will only be assigned the commission of 4,8% .
Spotlights also on Impregile it on the eve of the assembly of the possible ko. In fact, if the balance of power that emerged in the meeting of 12 July is confirmed, Pietro Salini could succeed in revoking Impregilo's board of directors, thanks to the decisive vote of the Amber fund and other financial operators close to the activist fund. The conditional is a must because these days Igli can play all out, trying to convince the minority partners to shift the ag of the balance in his direction. In reality, Amber's choice is motivated by the hope that Igli, defeated in the meeting, will react with the launch of a takeover bid which Amber (accredited in the meeting by 7,3%) could participate. Meanwhile, this morning Pietro Salini is engaged in another meeting with a boxing flavor, this time for the approval of the budget of Salini spa contested by his family.
European stocks ignored Moody's on Friday and closed higher on expectations of new economic stimulus in China. In Milan, the Ftse Mib index rose by 0,95%. London +1%, Paris +1,1%, Frankfurt +1,8% and Madrid +0,5%.
Italy easily digested Moody's downgrade of its sovereign debt rating by two levels, placing 5,25 billion euro of BTPs of various maturities with declining yields. The recovery of Italian government bonds has only been seen on short-term maturities, those which in any case count the most as a very important portion of the 1640 billion euro of outstanding Italian bonds are short-medium term.
Leading the rise in the European stock exchanges were commodity companies, media companies, telephony companies and automotive companies. For this latter segment, the session ended with good increases for the three German giants and a crash for Peugeot -8%, falling to the lows of the last 26 years following the announcement of the restructuring which will lead to the closure of two production plants. Fiat -3,3%, probably the victim of an association with Peugeot.
Telecom Italy it closed up 4,5%. Best stock of the blue chip basket was Salvatore Ferragamo +6,6%. Also recovering Tod’s + 2,4% Luxottica + 1,9% Yoox + 3,3%.
