PIAZZA AFFARI EVEN IN APRIL THE QUEEN BAG IS CONFIRMED
M&A FEVER AND BOND BOOM PUSH THE BULL
The May Day celebration falls at the right moment to appreciate the march of Piazza Affari, the main price list of the first part of 2014. The index FtseMib in fact, it closed the month of April with a modest positive change (+0,6% approximately) which nonetheless managed to confirm Piazza Affari at the top of the world stock exchanges in terms of performance in the first four months of the year with a gain of 15 %. In fact, in the same period the Eurostoxx index rose by 2,8%, Madrid +5%, Frankfurt stopped at a very modest +0,5%.
To underline that this is not a momentary tear but a trend that promises to last, the Italian visit of Lawrence Fink, number one of BlackRock, who in the Bel Paese, after the strong purchases of the last year, now counts investments for 59 billion dollars.
The meeting of Fink with Matteo Renzi, revealed by the president of Generali Gabriele Galateri, demonstrates that the big names in the financial market have descended on Italy with the intention of staying there for a long time: only a sensational own goal from the Bel Paese could at this point reverse a trend that promises to last, also because it rests on a framework in which positive factors seem to prevail, despite the clouds arriving from the eastern front.
OIL BELOW 100 DOLLARS, US TAPERING CONTINUES
The weather is clear a Tokyo, one of the few Stock Exchanges open today in the East: the Nikkei index rises +0,9% one hour after the closing. But above all they brake gold e Petroleum, slipped below the threshold of 100 dollars a barrel. Wall Street indices also closed in positive territory: S&P 500 +0,27%, Dow Jones and Nasdaq both up +0,3%.
Il Fed meeting gave no surprises: we proceed with the fourth round of tapering. The purchases of Treasuries and mortgage bonds by the central bank thus fall by another 10 billion a month to 45 billion dollars a month (20 billion are mortgage backed securities and 25 are US government bonds).
Few clouds disturb the skies of the markets: the slowdown in US GDP in the first quarter (only +0,1%, one point less than forecasts), it was explained as the latest negative effect of the harsh winter. The communiqué issued after the Fed meeting underlines that the economy has returned to growth since March. A speech by Janet Yellen is scheduled for today, a propitious occasion to bestow new reassurances on Wall Street.
Europe, on vacation today, experienced a session of consolidation, amid tensions on the Eastern front (surprisingly, the Russian central bank raised rates again to buffer the ruble crisis) and waiting for the decisions that the ECB will take on 8 May: inflation in the EU area rose in April to +0,7% from +0,5% in March, a small sign that makes the adoption of expansionary measures less urgent. London closed up 0,2%, Paris -0,2%, Frankfurt +0,2%, Madrid unchanged.
Heavier drop for Piazza Affari (FtseMib -0,8%), committed to the late April adjustments, another positive month for the Italian market which closes the first third of the financial year with a very flattering balance.
“PERIPHERY” TO THE RESCUE: DEBT SECURITIES FLY
Among the data that explain the good economic situation, a place of honor goes to the hot spring of debt securities, thanks also to the good, if not excellent news arriving from Lisbon: Portugal, which only six months ago seemed destined to ask for a new aid package to Brussels, has decided to imitate Ireland by exiting the EU aid plan disbursed three years ago slightly earlier.
The market response borders on enthusiasm: The Portugal it now places its bonds at more advantageous conditions than Australia which also boasts a triple A- rating. Meanwhile, the ten-year bond of Ireland, a country that has been dumb on the markets for a few weeks after a long purgatory, is traded at 2,89%, or only 20 basis points above the US T bond. And Greece, which has a debt/GDP ratio of 172%, gets a yield of 4,95%, not much worse than New Zealand's 4,2% (triple A rating).
In this context, the records of Italian debt are not surprising. Yesterday the yield of BTP ten-year declined to 3,07%, the lowest level in history. The spread drops below 160.
PURCHASING FEVER RISES. ANSALDO STS BACK IN THE SIGHT
A second factor that adds adrenaline to Taurus is the impressive growth of M&A fever. Deutsche Bank reports that 14 deals worth more than 10 billion dollars have been announced since the beginning of the year, the highest level since 2007. But the list seems destined to grow longer in the next few days.
The hottest sector remains pharma: the board of Astra Zeneca rejected the offer of 60 billion pounds, launched by Pfizer ("big is not always better" was the response to the advances arriving from the US) but several major shareholders have made it known that they think differently.
Meanwhile in Paris the tender for Alstom: The company welcomed the $13,5 billion offer from General Electric. Attention for Ansaldo Sts (+3,6%), which could end up in the sights of Alstom itself, which plans to invest in transport after the sale of the energy division. And so on. The tech and pharma sectors, recently in difficulty after the glories of 2013, are among the most affected by the phenomenon.
TLC RETURN SUPERSTARS. YOU LIKE THE PUBLIC COMPANY FORMAT
The telecommunications sector deserves a special note, in full swing after years of disappointing results. The market seems determined to make up for lost ground with an eye to the former incumbents. In France, already a battlefield for the control of Sfr, flies Orange runs Deutsche Telekom.
It is not far behind Telecom Italy , public company format, yesterday the best blue chip in Piazza Affari and second best in the ranking for the month of April (+8%) which is a candidate among the protagonists of the "hot" spring. This is the opinion of the managers of Norges Bank, the Norwegian central bank which among other things manages the pension fund of Scandinavian civil servants, who bought 2,015% of the capital of the former Italian incumbent. The stock has gained 2014% since the beginning of 28.
BANKS, READY TO RUN AFTER BRAKING
As usual, one hundred of the attentions remain the banking sector which, in truth, has experienced a month of adjustment. In fact, the worst stocks of the month include Banca Popolare dell'Emilia Romagna -10%, and Monte dei Paschi -9,5%, worst stock in the last April session despite the news that the MPS Foundation and the two South American partners with whom has signed a shareholders' agreement on 9% of the bank's capital they undertake to subscribe pro rata to the bank's 5 billion capital increase which will be approved in 20 days.
But, to predict a recovery of interest are the votes of analysts: Ubs has raised the assessments of Mediobanca, Intesa, Unicredit and Banco Popolare which has crossed the finish line of the capital increase, with excellent results. The capital increase (500 million) of Banca Popolare di Milano kicks off on Monday.
THE NEW BREED HORSES: FIAT, SAIPEM AND LUXURY
The market proved to be very selective and quick to change the horses on the run. It is no coincidence that first trimester purebred foals underwent a sharp correction in April. In this regard, the step backwards by Azimut (-13%) stands out.
On the contrary, the less brilliant stocks in the rally at the beginning of the year went to the rescue. Among the stocks that are pounding, Saipem deserves a note, +9% in the month despite yesterday's slide (-1,9%) which did not prevent the stock to be the best blue chip of the FtseMib of the month of April.
The month also saw the comeback of luxury stocks, in negative territory since January after the highs of 2013. The top ten includes both Yoox (+4%) and Ferragamo (+7,3%). Tod's is also making a strong recovery (+7%), one of the most targeted.
Campari's result was interesting (+4,5%), in a very negative month for the big names in the drinks sector.
However, May should be Fiat's month, which closes April with a flattering +3,7%. On Tuesday, Sergio Marchionne will unveil the business plan which, among other objectives, aims at relaunching Alfa, the "secret weapon" to guarantee a flying start on Wall Street.
