EUR 100.00 For Business Accounts Only

IBERIAN DAILY 03 SEPTEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, INDRA, LIBERBANK, MÁSMÓVIL, NATURGY, SACYR.

MARKETS YESTERDAY AND TODAY

Slight market gains
Few fluctuations at the beginning of the week, with the main indices consolidating the rally seen last week. In the Euro STOXX, Financial Services and Utilities saw the biggest gains while Basic Resources and Real Estate were the worst performers. On the macroeconomic level, in the euro zone, August’s final manufacturing PMI remained at the preliminary data (in line), with the better performance of Spain, Italy and France that offset Germany’s data. With the exception of France, the rest of countries remain at levels consistent with activity slowdown. In the UK, more voices request a new delay of Brexit until Jan’29 and we see increased rumours on possible early elections next Wednesday if the Parliament prevents the government’s Brexit plan. B. Johnson threatened with elections on the 14th of October if the party’s dissidents, led by Hammond, decide to support J. Corbyn in the motion of confidence. As for China and the US, Bloomberg states that both countries do not reach an agreement to set a meeting date this month and the pillars of a possible agreement.
What we expect for today
Stock markets trade mixed although with some bearish slant awaiting news on the trade negotiations. Currently, S&P futures are down -0.43% (the S&P 500 was closed for holiday). Volatility in the US will start trading from Friday’s levels (VIX 18.98%). The Asian markets that are open are mixed (Hong Kong -0.25% and Japan +0.12%).
Today in the US we will learn August’s manufacturing ISM and July’s construction expenses. As for auctions, Austria will issue € 1.15 Bn in bonds due 2024 and 2029.


COMPANY NEWS

ACCIONA, SELL
According to the press, the company would have sold to the US investment fund Fortress (to which it sold the collection rights for ATLL) the collection rights on a portfolio of more than 70 lawsuits in Spain and abroad for a total of € 300 M (7% of NFD and 5.7% of market cap) plus a potential upside depending on the legal rulings.
Although the amount of the sale is significant (7% of NFD and 5.7% of market cap) and to some extent could have a positive slant (part of the collection is assured and debt is reduced), the scant information released does not allow us to assess the potential impact of the deal on the valuation, as neither the nature nor the amount of the lawsuits (the sale of these collection rights normally comes with large discounts), nor the possible provisions associated to the lawsuits have been disclosed.

SACYR, BUY
Globalvia has won an award of the Court of Arbitration of the Chamber of Commerce of Madrid, on the Itinere shareholder’s agreement (SCYR, Abanca, Kutxabank), favors and as it considers the shareholders' agreement resolved. We remember that Globalvia and Corsair have been fighting for control of Itinere for years and this award could have implications on which of the two funds (Globalvía or Corsair) finally gets control of Itinere. SCYR, which had 15% of the concessionaire's shares, sold its stake to Corsair (and not Globalvía), which has caused it to be in the middle of the crossfire. This award, referring to the shareholders' agreement, has passed in parallel to the judicial process opened by the sale of SCYR's stake in Itinere, whose hearing takes place this fall and is scheduled to be resolved at the beginning of next year.
We think the impact on SCYR is null, as it will end up selling its stake to one company or another, and at the same price and without large penalisations. In fact, it has already received the money from the sale, and if in the end the judge decides it must sell the shares to Globalvía (instead of to Corsair), we understand that this would be mere transfer of the securities, with no relevant impact on cash.
That said, the news generates some confusion, which is never a positive thing.