THE CHINESE CREDIT CRUNCH IS SCARY. SHANGHAI -3%
RCS, DIEGO DELLA VALLE CONSIDERS THE BIG SHOT
Start of volatile week for Asian price lists. There Tokyo Stock Exchange, after a positive start, slipped to -0,3%. But the focus is on theChinese economyhit by the sudden credit crunch. The central bank sends reassuring signals, but Goldman Sachs cuts its estimates of the second largest economy on the planet, underlining the seriousness of the banking crisis. This morning in Hong Kong, the Industrial & Commercial Bank, the second largest Chinese bank by assets, lost 2,4%; in June, the institute's shares closed in the plus sign on only one occasion. The Hong Kong Stock Exchange loses around 1,5%, Shanghai is down by 3%.
Piazza Affari, between today and tomorrow, could be the stage for the great leap of Diego Della Valle in RCS. The owner of Tod's seems intent on taking over the rights of Giuseppe Rotelli. In this case, with an outlay of around 100 million (37 million to subscribe the stake due to his 8,67% already owned, 67 for the former Rotelli shares), Della Valle could rise to 22% in the via Solferino group, ready to re-discuss governance, industrial plan and possible split.
TREASURE, HOT RODS AHEAD.
Meanwhile, like every summer, the Darling is in danger of sunstroke. Between tomorrow and Thursday, government bonds worth 18,5 billion will be offered at auction. At increasing interest rates, after the upward correction of bond yields in almost all markets. But also for the signs of tension in Europe regarding the "orderly bankruptcy" of the banks, and the risk of collapse of Greece. But above all, also due to the authoritativeness of the source, an analysis that is clearly visible on the operators' desks is frightening.
Will Italy go into default by 2013? The prophecy exploded over the weekend after Il Fatto newspaper published a summary of a confidential report by Mediobanca Securities, signed by Antonio Guglielmi. The analyst, one of the City's most esteemed, started from a signal coming from the market: on Friday the 2013-year BTP expiring on August 74, 31 paid a yield of 48 basis points. A six-month Bot, expiring on July 50, instead paid a yield of XNUMX basis points. That is, compared to the Bot, the Btp yields XNUMX percent more. The explanation, according to Guglielmo, is that the BTPs are long-term loans, the BOTs are short-term loans. When a country declares a default, even partial, and asks to renegotiate the conditions on its debt, usually long-term loans are involved while short-term ones, used by banks as collateral (i.e. guarantees) for their daily operations, remain safe…
EXCHANGES AND BONDS IN SEARCH OF BALANCE (HARD)
At the mercy of the governors. After FOMC meeting, the conference season begins. Speeches by eight of the twelve Fed governors who attended the monetary committee meeting are expected this week. The messages of hawks and doves will thus mark the difficult search for balance of a market looking for a new compass after the turning point.
Last Thursday's announcement that the Fed will progressively reduce the stimulus plans for the US economy, has provoked robust reactions, at times violent, on almost all the markets. Now, as seen on Friday, the markets have entered an adjustment phase.
A Wall Street the last session of the week closed as follows: Dow Jones +0,28%, S&P 500 +0,27%, Nasdaq -0,22%
Meanwhile :
a) US bond rates rise and the dollar strengthens, which rose today to 1,310 against the euro, from 1,322 at the previous close. From the lows of May, the 2-year US Treasury rate rose from 0,20% to 0,32% (+60%). The 5-year rate rose from 0,65% to 1,23% (+90%). The 10-year rate rose from 1,38% to 2,40% (+58%).
b) With the stronger dollar, oil prices fall: Brent fell 1,3% to 100,8 dollars a barrel, after losing 3,7% the day before.
c) After Thursday's blow -4,9%, gold has stabilized at 1.288 dollars an ounce (+0,2%)
d) Emerging Stock Exchanges are reeling. The MSCI Asia Pacific index which brings together the main stock exchanges in the Far East, excluding Tokyo, has been losing 12% since the beginning of the year. In South America, Brazil accumulated a loss of 20% in the first six months of the year.
e) At the root of the collapse of Brazil and Australia's problems there is also the credit crunch in China, which has put a significant part of the banking system at risk. On Friday, the central bank finally widened its purse strings and rates dropped from 8,5 to 4,4%. But the feeling remains that Beijing, even at the cost of a sharp slowdown in development, wants to stop a by now uneconomical allocation of resources.
f) The Greek stock exchangefinally, it lost 27% in one month due to internal political tensions and for the same reasons the Turkish one lost 23% in addition to the devaluation of the lira (-10%)
MEDIOBANCA AND RCS ATTEMPT THE COLLECTION
On the government bond market on Friday the BTP remained stable at a yield of 4,58% with a spread at 285.
Ma the FtseMib index from Friday to Friday it lost 5,5% - The performance since the beginning of the year marks -6,2%.
This morning I start at high voltage for the banks, do not spare yourself from the ax of Guglielmi's report, the "Cassandra" who has almost always caught us on the vicissitudes of our local credit companies.
The cash coverage ratio of problem loans in Italian banks, notes the report, has decreased from 51 per cent in 2007 to 40 per cent in 2013. Meanwhile, real guarantees, usually represented by real estate, are losing value. In the Mediobanca Securities simulation, Italian banks could correct the value of the properties they have in their balance sheet downwards by 45 per cent and in any case the coverage of the loans (cash plus guarantee) would remain at 100 per cent. But if instead they wanted to maintain the current coverage ratio, 125 percent, a drop in real estate prices of 10 percent would be enough to wipe out the 17 percent of the capital calculated according to the parameters of Basel 2.
He closed in deep red Pop. Milan -11,3%, before the assembly which on Saturday approved the capital increase for 500 million with which the Piazza Meda site will return the Tremonti bonds. The shareholders' meeting also approved the appointment of Giuseppe Coppini as chairman of the supervisory board.
It deserves a special note Mediobanca, which fell by 9,4% on Friday, the day of the presentation of the new industrial plan which disappointed investors: too little news to convince the market of the institution's income potential.
Down too Unicredit -4% Understanding -3,7% MontePaschi -2%.
Only positive bank Pop.Emilia +3,5% which recovered part of the previous day's fall.
The black jersey among the blue chips belongs to Saipem, plunged 35% after the shock of a new profit warning, the second in four and a half months. Eni, dragged down by its subsidiary, loses 8% The European automotive industry is heavy: Fiat loses 8,3% during the week (Friday -2,6%).
The best of the week was Mediaset, up 6,4% above 2,6 , the highest since November 2011. An increase which, at the state of the information, is difficult to explain: on a political-judicial level it was not an easy week for Silvio Berlusconi; from an economic point of view, there are no signs of improvement in the advertising market, either in Italy or in Spain.
Among the positive headlines Friday stands out Telecom Italy + 2,5%. Gtech rose 1,9% after winning a lottery contract in the state of New Jersey.
