TRICHET FREEZES THE MARKETS. MILAN –1,43%
12-MONTH BOT YIELDS FALL
"The crisis, which is now systemic, has worsened in the last three weeks and the institutions must act quickly, without further delays which would otherwise aggravate the situation": said Jean Claude Trichet, president of the ECB, today in a hearing in Parliament EU. Words that froze the stock market euphoria after the roaring Monday: the Ftse Mib index lost 1,43% to 15.868 points. London is down by 0,65%, Paris by 0,9%, Frankfurt by 0,7% and Madrid by 1,05%. Trichet said this morning that "in the last month, sovereign stress has shifted from the smallest economies to those of some of the largest countries in the European Union." It should be noted that the outgoing ECB president spoke as president of the European Systemic Risk Board. The euro is trading at 1,361 against the dollar, roughly unchanged from last night's close.
Today Slovakia votes the go-ahead to strengthen the EFSF fund, it is the last of the countries in the euro area to give its opinion: Prime Minister Iveta Radicova has said she will ask for a vote of confidence. If Parliament does not ratify the reform of the fund, a government crisis would open but the go-ahead for the provision should not be in danger because the opposition parties should support it. Oil is down: Wti at 84,7 dollars a barrel (-0,8%) and Brent at 108,1 dollars (-0,7%). Positive outcome for the Bot auction with a sharp drop in yields on one-year bonds: in today's auction, the Treasury placed 74-day and one-year bonds for a total of 9,5 billion, offering lower interest. For the 1-year tranche (of 7 billion), the average rate fell to 3,570% from 4,153% for the September issue. For the 74-day tranche, the rate is 1,735%. The three-month Euribor was set at 1,570% from 1,567% yesterday.
THE MARCH OF UNICREDIT CONTINUES +3,4%
GOLDMAN SACHS PUNISHES TELECOM ITALIA
Unicredit's positive movement continues, up 2,49% after yesterday's 12% jump. The stock resumes the threshold of 1 euro, abandoned on 18 August. Among the banks, Banco Popolare +1,8%, Monte Paschi +0,8% were also positive. Ubi+2,23%. Intesa loses 21,52%. Telecom Italia loses 3%. Goldman Sachs cut its valuation to short from neutral this morning and added the stock to its list of European companies to sell. The same treatment, from neutral to sell, for Telecom Italia savings: the share lost 1,3%. The report states that the downgrade is motivated by expectations of a contraction in Italy's GDP in 2012, by Telecom Italia's precarious strategic positioning in the market arena and by the limited space for cost cutting. Telecom Italia has six consecutive upward sessions behind it with an overall gain of 9%.
Stm also fell, losing 2,9%. Yesterday, the share of the leading European producer gained 5,7% and since the beginning of October the increase is 12%. Behind today's decline is the sell fired by Citigroup, the American broker has brought the target price to 4,8 euros. Rbs analysts have instead warned that Stm will present weak data for the quarter on October 24th. Finally, Exane Bnp Paribas reiterated its cautious view on the entire semiconductor industrial chain: for the French broker, in the second half of the year there will be a progressive deterioration of the scenario.
BPM BATTLE: HARPS TAKES THE FIELD
INDUSTRY IN BRAKING. FIAT UNDER -1,82%
Banca Popolare di Milano drops by 0,74% after the news that Matteo Arpe is once again in serious contention to take over the management of the bank. The banker was addressed by Marcello Messori, the economist president of Assogestioni, the first candidate on the list presented by the Fabi and Fiba-Cisl unions, and asked him for willingness to participate in the future management board: Arpe, accepting Messori's invitation (who is part of Sator's board of directors) wanted to clarify that neither he nor the companies he controls (the Sator fund) have bought shares in Bpm.
The key appointment is the shareholders' meeting on 22 October which will have to appoint the new supervisory board, provided that in the meantime the Bank of Italy approves the new statute which introduces the dual governance. After that, the supervisory board will appoint the five managers of the management board who will be responsible for the operational guidance of the bank. In the coming days, the Fabi/Fiba list will hold meetings with the employee-shareholders of Bpm, the shareholder component that holds the fate of the assembly in hand, to present its project to relaunch the institute, and these meetings will probably be attended also Matteo Arpe. Messori has also taken a tough stance against the BPM Friends Association, which has come under the spotlight for the role he allegedly had in managing employee promotions. Insurance companies are down: Generali -1,5%, Fondiaria Sai -2,3%. Eni -1,21%, Enel -2,67% and Fiat -1,82% retraced after the rises of recent days. Fiat Industrial is down by 3,04%. Among the positive notes we mention the stocks of the alternative energy sector: Terni Energia +4,2%, Kinexia +3,3%, Falck Renewables +1,3%
