ATTACK ON BUSINESS PLACE
NEW RECORD FOR THE BTP-BUND SPREAD
Milan stock exchange under attack: the Ftse Mib drops to 18.969 points to then close at 19049,88 points, down 3,47%. The other European stock exchanges were also in the red, but with more contained drops: the Dax -0,92%, the Cac -1,67%, the Ftse 1,06 -100%. A day dominated by nervousness in which factors technicians to amplify the declines with the sales triggered by the stop loss mechanisms. But Italy was hit by an unprecedented speculative attack: international concerns weigh on the Greek debt crisis and for the peripheral countries after Moody's downgrade on Portugal, the expectation of the results of the stress tests for the banks, but also the political unknowns related to the maneuver and the possible, but improbable, resignation of Economy Minister Giulio Tremonti.
A deadly cocktail that offered the right to speculation, complete with Consob taking the field to monitor the most suspicious collapses. The tsunami fully invests government bonds: the spread of 245-year BTPs over similar German bonds shot up to a new record of 228 basis points, then returning to 5,36 (with the 10-year BTP yield rate rising to 13%). The yield on Portuguese 17,77-year bonds also flies above 16,40%, just as two-year bonds are up to 12,96%. Record also for Italy which reached XNUMX%, while the XNUMX-year rate rises to XNUMX%.
But risk aversion also affects Belgium, Holland, Austria and Finland with all spreads on the German Bund widening. In the afternoon, the mood of all the price lists was worsened by the data on US unemployment which also caused the other European stock exchanges to accelerate downwards, which had held up better than Milan in the morning. In fact, the data for the month of June turned out to be clearly below expectations (after the ADP estimate for the private sector had instead done better than expected): the number of non-agricultural workers increased by only 18.000, well below the expectations of 90.000 new jobs and the unemployment rate rose to 9,2% in June, compared to expectations of 9,1% and the May figure also 9,1%, the highest since December 2010.
The data on sales in the USA are also bad: in May inventories of durable goods increased by 1,8% on a monthly basis, against expectations of +0,7% and +1,1% in the previous month. The figure represents the largest increase since April 2006 (at the time it was +2,0%). Wholesale sales fell by 0,2%, while growth was expected by 0,2%. Oil in New York retraced to around 96 dollars a barrel. Wall Street is also weak, opening lower (the Dow Jones and the S&P500 at -0,7% and the Nasdaq at -1%) and now the Dow Jones travels down by 0,89% and the Nasdaq by about one percentage point . The increase in risk aversion is also reflected in the euro-dollar exchange rate which experienced a volatile day and fell below 1,425 (1,42 intraday lows): investors penalized the euro compared to safer currencies. The 1,593-month Euribor at today's fixing rose to 3% (yesterday it was 1,583%), the highest value compared to 18 March 2009.
UNICREDIT IN THE SIGHT
MPS CLOSES THE INCREASE
In Piazza Affari we live again the tumultuous day of Friday 24 June with the sudden collapse of bank stocks after an overall cautious start to the session. In the operating rooms there is talk of speculation and of Italy in the crosshairs. And Consob has taken the field, working to verify whether these are widespread exchanges or instead there are more active intermediaries. Just today, the hearing of the Moody's rating agency was held at Consob which on 23 June announced that it had placed the creditworthiness of 6 Italian banks under observation, amplifying the already high nervousness about the situation of the Greek sovereign debt crisis . All eyes are on Italian banks on the results of the stress tests which will be announced on 15 July. According to reports from Bloomberg, a preliminary EU document establishes that banks that fail the stress test and have a Core Tier 1 above but close to 5% will have to present a recapitalization plan by the end of September. They will have to raise funds on the market but there is also the possibility that individual governments will be called, in extremis, to intervene.
And nervousness affects Unicredit above all: there is the belief that in the end the group too will have to recapitalize. We are talking about 5 billion. The stock closed down 7,85% to 1,232 after being suspended on the downside in the morning (-5,76% theoretical). The bank led by Federico Ghizzoni after the turbulent departure of Alessandro Profumo last September has not yet participated in the wave of recapitalizations that has hit the sector: a new appeal to shareholders has so far been excluded by Ghizzoni at least for the 2011. This would be the third increase in three years: the last increase dates back to the beginning of 2010 for about 4 billion while another four billion had been collected in 2009.
The governor of the Bank of Italy, Mario Draghi, who will soon take office at the Eurotower, intervened on the stress tests: "I am certain - he said - on the basis of our analyzes that Italian intermediaries will pass the stress tests underway by a significant margin." European Headquarters". And he added on the government's economic manoeuvre: "It constitutes an important step for the consolidation of public finances, the measures make the balanced budget in 2014 credible and the start of a downward trend in the debt/GDP ratio". The 2,5 billion Mps capital increase closing today according to rumors would have gone through with over 95%. After opening the session up, however, the stock returned to the red with sales on all banks in the middle of the morning and closed down 3,01% to 0,515. The group collects another positive opinion from analysts. BofA Merrill Lynch brought its valuation to neutral from underperform with a target price of 0,70 euro: the track record in improving efficiency is credible, is the opinion of analysts, and the current valuation of the bank after the capital increase it is also attractive in light of the fact that MPS will be able to start paying dividends again after a phase of restriction. Unicoop Firenze, a shareholder with 2,988%, also adhered to the increase, adding to the confirmations of trust already received from all the other main shareholders. Meanwhile, internal dealing communications show that Francesco Gaetano Caltagirone went shopping on the stock, buying more than 4 million shares in various tranches between 7 and 10 June through his companies for around 6 million euros.
All the other banks were also bad: Intesa Sanpaolo left the field 4,56% at 1,654, Bpm 6,12 at 1,533 and Banco Popolare 6,46% at 1,42. Special observation today is also Fonsai, among the worst stocks of the Ftse Mib which closed down by 7,01% to 2,07 euros on the last day of the trading of rights (-31,56% to 0,924). The Ligresti insurance group, after having jumped close to the start of 3% to 2,314 euros per share, was also suspended in the morning at a downwards (-3,41% theoretical). In the meantime, yesterday the antitrust approved the Premafin – Unicredit pact with the commitments undertaken by the two parties to counterbalance the strengthening of Mediobanca's capital due to the entry of Piazza Cordusio into Fonsai. Asset management was also bad, with a negative balance of 3,1 billion in June (half a billion for equity funds alone). Azimut loses 5,61%. Mediolanum (-3,32 percent) and Banca Generali (down 2,93%) were also down, but they are among the five groups that archived positive deposits in June.
FIAT SLOWS DOWN IN BRAZIL
ANSALDO STS FALLS ON VOSSLOH
Fiat (-3,27%) suffers from fears about the slowdown of the Brazilian market. The group has already shut down the Cordoba plant in Argentina for a week and could also shut down the Betim production site in Brazil. A note from the group in the late afternoon specified with regard to the news on the shutdown of the plants that "the Fiat plant in Betim, Brazil, will close one shift of a production line for a week for routine maintenance reasons and to balance the production mix ” and that “the Fiat plant in Cordoba, Argentina, had a one-week technical shutdown mainly to balance the production mix and logistics”, due to the current trade relations between Brazil and Argentina. Today Fiat also announced the settlement of the two euro bond loans the price of which was set on July 5th. The securities, which were issued by Fiat Finance and Trade Ltd, were assigned a rating of Ba1 by Moody's Investors Service, BB by Standard & Poor's and BB+ by Fitch. The notes have been admitted to listing on the Irish Stock Exchange
Ansaldo Sts fell by 7,27% to 0,883 on the wake of the profit warning launched by the German Vossloh due to delays in the construction of high-speed rail in China and Russia. The market fears that the slowdown of some projects in China could be a bad sign for the sector and therefore also affect the Italian company 40% controlled by Finmeccanica which, however, is present in China in the metropolitan transport segment and not in high speed.
TELECOM BETS ON CARIOCA FIBER OPTICS
THE TENDER OFFER FOR PARMALAT CLOSES
Telecom Italia, through its subsidiary Tim Cellular, has acquired the Brazilian group Aes Atimus for 700 million, which owns 5.500 kilometers of optical fiber between Sao Paulo and Rio de Janeiro, the most populated areas of the country. This is the first acquisition of an asset of this size in recent years but the group specifies that "the operation does not change the deleverage plan presented to the market last February". The stock closed down by 2,21% at 0,883 euro per share. The tender offer for Lactalis on Parmalat closed today (-2,26%): the French group had already risen above 50% yesterday, ensuring definitive control of the Collecchio group a day before the end of the tender offer . The foreign funds have joined and also Intesa Sanpaolo which has delivered its entire share package of 2,438% for just over 110 million euros. In the earthquake that shook Piazza Affari, the only rise in the Ftse Mib was achieved by Bulgari which closed at 0,883, up 2,21%.
