Before focusing attention on Thursday's ECB directorate, the financial markets concentrate on another dossier, potentially a harbinger of major concerns: China, this morning the Shanghai Stock Exchange drops by 6,5%, closely followed by Shenzhen ( -6,4%). At the origin of the crash, which comes after the spectacular increases of 2014 (+53%) is the decision of the authorities to prohibit the disbursement of new loans to three large brokers. The new decline in the real estate market also weighs. Hong Kong is also down.
Beyond the technical slowdown, attention is focused on the GDP data, which will be published tomorrow. Growth is expected to stop at 7,2%, the lowest rate in 24 years. Tokyo was also down (-1,24%), weighed down by the growth of the yen against the dollar.
BCE PURCHASES UNDERWAY. BUT WITH CONDITIONS
Wall Street closed today (Martin Luther King memorial holiday) the attention of the markets is concentrated on the modalities of the European QE which will be launched on Thursday 22nd, barring sensational surprises, Quantitative easing will be done. But which QE? These are days of intense negotiations between the bankers regarding the issues to be resolved: the amount of the operation (from 500 to 700 billion according to the various hypotheses); the type of securities; risk sharing between countries. In fact, the pressure from Germany and its allies remains high for the purchases to be made by the respective national banks.
Meanwhile, the debt market has already discounted a large part of the Qe effect: debt, the yield on ten-year BTPs has fallen to a new all-time low of 1,65% (yesterday at 1,73%). The yield spread with the German Bund (itself at its lowest) narrowed to 118 basis points.
The Greek emergency is of no small importance: Athens has asked for a temporary loan of 5 billion from the ECB to deal with the possible run on branches and ATMs in view of the elections on Sunday 25th.
EURO/DOLLAR AT 1,15. OIL DOWN AGAIN
In the meantime, the quotation of the euro traded at 1,1566 against the dollar remains weak this morning. Towards the Swiss franc, it restarts from 1,0020, 17% lower than last Monday. Oil is down, after the rebound at the weekend. Brent is traded at 49,75 dollars (-42 cents), Wti at 48,32 (-37).
FOR PIAZZA AFFARI THE BEST WEEK IN 6 MONTHS
On Friday, the sudden awakening of the oil sector allowed Standard & Poor's to contain the week's losses to 3,4%. Exxon and Chevron were up 2,4%. The downside is the bad behavior of financials after the quarterly: Goldman Sachs (-0,7% on Friday), recorded the worst accounts since 2005. Jp Morgan, Citi and Bofa have overall suffered a drop in profits of 23%.
The Milan Stock Exchange closed the best week of the last six months with a gain of 5,9% (Friday +2,1%). Over the course of the week, the overall European Stoxx 600 index rose by 4,3%. The exception was the Zurich Stock Exchange, overwhelmed by two ruinous sessions (-8,8% on Thursday, -5,6% on Friday) after the central bank's announcements.
FINMECCANICA, CHINA IS CLOSER
In the spotlight Finmeccanica (+4%) and the subsidiary Ansaldo Sts (+1,1%): the sale of the Transport division would be in the pipeline. The Chinese Insigma will inform Finmeccanica this morning of its intention to extend the binding offer to Ansaldo Breda and Ansaldo Sts until mid-February. The overall offer should be higher than 1,5 billion.
It is not the only step forward by China in the finances of the Bel Paese. The People Bank of China has exceeded the threshold of 2% in Terna's capital in which another representative of Beijing proposed by National is about to enter, as a shareholder of Cdp Reti. Finally, on the 26th, another member of the National Grid will join the Snam board.
BANKS, THE REFORM OF POPULAR RATES SPIRITIES FOR THE SECTOR
A battle is looming on the front of the reform of the cooperative banks relaunched by Matteo Renzi, a measure that could give wings to the securities of the sector and relaunch the hypotheses of aggregation between Bpm and Bper, the choices of Banco Popolare (+4,3% on Friday) and on the role of aggregator of Ubi.
In the meantime, it will take two weeks to have a definitive outcome of the MPS negotiations with the top management of the European Supervisory Authority led by Danielle Nouy. While waiting for Mario Draghi, the banks are living in a climate of growing fibrillation. There was alarm on Friday following reports that two Greek banks were in trouble. The euphoria from Quantitative easing erased the worries and the banks in Piazza Affari achieved substantial increases: Unicredit rose by 2,8%, Intesa +1,4%.
FIAT BEST TITLE OF THE MONTH. THANKS TO THE USA (BUT NOT ONLY)
Fifth consecutive positive week for the Fiat Chrysler stock with an overall gain of 5,7%. FCA is also the best blue chip in the FtseMib of the last month with a gain of 14%. Jp Morgan analysts have raised the target price on the stock to 12 euros from 8 euros with an opinion confirmed by Overweight.
The leap is to be linked to the excellent performance of the US market, electrified by the drop in petrol. But things are also looking up in Europe. Car registrations ended 2014 with a single-digit increase, just over 13 million vehicles, with the Fiat Chrysler group progressing throughout the year in line with the market to surpass it in December, according to figures of the Acea producers' association. Fiat Chrysler Group reported 7,2% growth to 55.863 vehicles in December, with market share to 5,6% from 5,5%. To date, of the 30 analysts surveyed by Bloomberg who follow the stock, 13 recommend the purchase and only 7 the sale. The average target is set at 10,60 euros.
TELECOM TOWARDS THE TELCO SPLIT
In a report dedicated to the TLC sector, Mediobanca highlights that Telecom Italia is in first place in Europe for industrial profitability with a net operating margin which in 2013 amounted to 21,8% of turnover. This figure is in line with that of the British BT (21,6%) and better than that recorded by the Spanish Telefonica (16,3%), the French Orange (15,6%) and the Russian Vimpelcom.
Also as regards the added value calculated per employee, Telecom Italia takes the lead with 136 thousand euros, while the cost of labor per employee is very competitive, equal to an average of 51 thousand euros. Piazzetta Cuccia's analysts set a target price of 1,66 euros (potential upside +80%) with an Outperform recommendation.
The good report card does not change Piazzetta Cuccia's judgment, in the process of placing the controlled stake (1,64%) in the former incumbent, as Intesa is about to do, which has doubled its short position on the stock and Generali which sterilized participation in an ad hoc "box". Time X could start as early as this week after the authorization of the Brazilian and Argentine authorities for the demerger of Telco.
LUXOTTICA, THERE IS AN EXTRA COUPON IN THE AIR
Having forgotten the post-war difficulties, the Luxottica board of directors is preparing today to celebrate the recent records in the wake of the superdollar (+15,3% in one month) and to complete the ranks with the appointment of the new independents. The board will today entrust the powers of managing director for the markets to Adild Mehboob Khan, a former Procter & Gamble manager who already sits on the board, ready to support Massimo Vian, CEO for production activities. Finally, in March, the entire board will expire. Today the first data on the 2014 financial year will be communicated: according to analysts, the turnover should close at 7,6 billion (+10%). Meanwhile, the prospect of an extraordinary super-coupon that could reach up to 2 euros per share is making its way.
OIL, UNDER PRESSURE AGAIN
The sector is always under tension. Oil stocks shot up on Friday: Eni gained 3,3%, Tenaris +2,2%, Saipem +1,7%.
Worth noting is the increase in Trevi (+6,54%) after new orders in Algeria and Saudi Arabia for a total of 280 million. Good increases also for utilities: Enel gained 2,7% after the promotion of Credit Suisse to Neutral from Underperform. A2A +3%.
