The week opens in the name of currencies. The Turkish lira is gaining positions, up to 3% on the wave of the electoral success of President Erdogan's AKP, which managed to undo the defeat suffered six months ago.
Meanwhile, after last Friday's sharp rise in the yuan, China raised its currency fixing base by 0,54% this morning, the largest increase since 2005. With this move, the Beijing authorities intend to reiterate that the exchange rate now depends on the market, not from political decisions. Meanwhile, the economic situation is not improving: in October the PMI index remained unchanged at 49,8 points, below the expectations of analysts who had forecast it would reach 50 points, or the watershed between contraction and expansion.
China's difficulties are reflected in Asian stock exchanges. Worst of all is Tokyo (-1,6%) ahead of Hong Kong (-0,9%). Shanghai scores (-0,6%).
THE BOSS OF ILIAD MAY KNOW THE ASSEMBLY
Reactions to the Turkish vote, US occupation and the state of health of European economies based on PMI data released this morning. There is no shortage of material for the first session in November. But the attention of the European markets is also concentrated on the telecommunications sector. The merger season among the many, too many companies in the sector (about 500, including 30 former incumbents against the 4 US managers) is now underway. And the first battlefield is the Bel Paese.
The battle over Telecom Italia restarts this morning, having jumped to the highest multiples in Europe thanks to the purchases of Xavier Niel (15,1% of the capital) and Vincent Bolloré (20,03%). The prevailing opinion is that the two do not act in concert nor do they intend to go beyond the takeover bid threshold, which explains the drop in the stock at the end of the week.
But the very dynamics of Niel's blitz, which makes use of a first-rate team (Lazard as director, Crédit Suisse agent bank, legal advisor Erede Pappalardo), suggests the plot of the next episodes. In addition to six call options to be settled starting next June, the owner of Iliad has subscribed to an equity swap equal to 5,1% of the capital, which can be reached in just 24 hours.
Niel, therefore, has the 5% necessary to convene a Telecom meeting, in which he could deploy, at his choice, part or all of the shares reserved. The target? The decadence of the current board of directors in view of new strategies. The Bolloré company, at that point, will ask for adequate representation on the board.
In these days a move by the government is expected, which has reiterated several times in recent days that Telecom is strategic. But, having discarded the Golden Power, any reaction requires a strong financial commitment that is not within the reach of the Italian Strategic Fund.
DRAGONS PREPARE QE2. FIXED INCOME BELOW ZERO
The price lists restart with the guarantee guaranteed by an exceptionally positive October for the markets, but also with the mortgage of the probable increase in US rates in November. In this regard, the data on US employment which will be released next Friday is very important. The forecast is for a positive balance of 181 units, better than the disappointment in September (142).
Numerous interventions by US central bankers in the coming days. Stanley Fischer, number two of the Fed, William Dudley of New York and Dennis Lockart of Atlanta will speak. The key event is scheduled for Wednesday, when Janet Yellen will appear before Congress.
No less relevant is the debate in Europe, awaiting the decisions of the central bank on December 3rd. The new economic forecasts will arrive on Thursday which will give an overview of the public finances of the euro area and will indicate the point at which the recovery is, always at the mercy of external factors and internal demand and investments that are still too low.
Mario Draghi, in an interview with Il Sole 24 Ore, did not exclude that, alongside the strengthening of Qe, other interventions are possible to appease deflation. There will be a speech by the president of the ECB on Thursday. 40% of euro area stocks are now in negative territory. Including 6-month BOTs and CTZs assigned at auction at less than zero interest.
Meanwhile, European stress tests have shown that the four main Greek banks need 14,4 billion euros of liquidity to return to normal.
RECORD OCTOBER. SAIPEM, FCA AND MANAGED IN THE LIGHT
Has been an exceptional October for the markets. The American S&P500 index has accumulated an increase of about 9%, the largest in the last four years. At the same time the Eurostoxx 600, which brings together the most representative stocks of the euro area, recorded the best rise in the last six years with +8,8%.
The recovery of the Eurozone was driven by the very strong rebound of the German Stock Exchange: in October the Frankfurt Dax rose by 11,6%, to find anything better we have to go back to April 2009 (+16,7%). Less effervescent Milan, which has to be content with an increase, albeit flattering, of 5,1%. At the top of the Piazza Affari ranking is Saipem (+16,5%) which rebounded from the lows of the last ten years after the announcement of the group's relaunch plan which includes a capital increase, debt refinancing and entry into the shareholding structure of the CDP. Telecom Italia follows closely behind, inflamed by the entry of Xavier Niel.
The Exor / Fiat Chrysler duo recorded a gain of around 15% thanks to the listing of Ferrari. The sales data for cars on the Italian market in October will be announced today. Mediolanum (+15,3%) and Azimut (+13,7%) also did well, driving the recovery in risk appetite. Finally Enel, driven by the decision to incorporate the subsidiary Enel Green Power, which could be brought to the attention of the respective Boards of Directors in mid-November.
BANKS UNDER FIRE, LUXURY STILL SUFFERS
Black month instead for the credit. Among the ten worst stocks are four banks: Pop. Milan, Pop. Emilia, Intesa, Banco Popolare. There is also little confidence in the Luxury sector. Among the worst stocks of the month are Moncler (-8,7%) and Tod's (-2,8%).
PIRELLI LEAVES THE STOCK EXCHANGE TODAY. AND ANSALDO STS PREPARES THE GOODBYE
After the uninspiring debut of Poste Italiane (from 6,75 on the IPO to the closing at 6,50 on Friday) Piazza Affari must record two important farewells. The sale by Finmeccanica of Ansaldo Breda and of the listed Ansaldo Sts to the Japanese company Hitachi has been completed. Today, the railway signaling leader's assembly will be able to deliberate on the matters on the agenda”.
Meanwhile there will be a relay race in the Ftse Mib basket: Anima Holding will take the place of Pirelli after the success of the takeover bid launched by Marco Polo (Chem China and Camfin) on the company.
UNICREDIT EXCEEDS THE BULGARELLA CASE. AND GETTING READY FOR THE CUTS
Crisis overcome in Unicredit. The review court of Florence has exonerated Fabrizio Palenzona and the managers of the group involved in the alleged favors to the Bulgarella group, in the odor of relations with the boss Matteo Messina Denaro. Ten days after the review of the business plan, Unicredit was thus able to close the matter, albeit with a crackdown on relations between the bank's managers and board members.
The plan under examination by the Board of Directors on 11 November should provide for a reduction in personnel of up to 12 thousand cuts, to increase profits and raise the group's assets without resorting to a capital increase. The indiscretion on cost cutting does not include in the calculation of layoffs the 6.000 people who will leave the Unicredit group with the planned sale of the subsidiary in Ukraine and the exit from the consolidation perimeter of the subsidiary active in Ukraine.
Unicredit's new plan should focus on internal growth through the development of businesses that absorb less capital and generate commissions. The Bank could also announce a €1 billion-a-year cost-cutting plan, to be implemented by 2018.
