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IBERIAN DAILY 21 JANUARY + 4Q’20 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA, CELLNEX, OHL.

At the end of today’s report, and during the entire results season, we will include a presentation with positive and negative results highlights and previews for the 4Q’20 results to be released over the coming days in Spain.

MARKETS YESTERDAY AND TODAY

Markets welcome the promise of new stimuli
The world’s stock markets celebrated the presidential inauguration of J. Biden and the promise of new fiscal stimuli after Treasury Secretary Nominee J. Yellen urged lawmakers to “act big”. Thus, within the Euro STOXX, cyclical stocks posted the biggest gains once again, led by Technology and Autos, whereas Consumer Goods and Utilities saw the biggest drops. On the macro side, in the Euro zone, December’s final inflation confirmed the preliminary data (-0.3% general inflation and 0.2% core inflation), whereas in the United Kingdom, December’s inflation rate rose a tenth more than expected (0.6% general inflation and 1.4% core inflation). In the US, the NAHB real estate index fell unexpectedly. In Brazil, the Central Bank decided to keep Selic rates at the minimum 2.0%, as expected. In Japan, the BoJ kept the monetary policy unchanged and raised its growth forecast for 2021 to 3.9%. In US business results, Bancorp came in below expectations, Bank of NY in line and Procter&Gamble and Morgan Stanely better.
What we expect for today
European stock markets would open with gains of +0.3%, led by cyclical stocks although the rapid propagation of the UK’s Covid-19 strain suggests new and tighter restrictions over the coming days. Currently, S&P futures are up +0.30% (the S&P 500 closed practically flat vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 21.58%). Asian markets are rising (CSI 300 +1.9%, Japan +0.7%).
Today in the Euro zone the ECB will hold its meeting. Also we will learn January’s consumer confidence data, in Mexico, December’s unemployment rate, and in the US, the weekly jobless claims data and December’s housing starts data. In US business results, Travelers, M&T Bank, Baker Hughes, PPG and Intel, among others, will release their earnings.


COMPANY NEWS

OHL. Details on its debt restructuring agreement. SELL.
According to the press, OHL would be about to close a bond restructuring agreement (€ 593 M; ~82% debt) that would include a € 35 M relief (around 6% of the total; ~18% market cap), the conversion of € 65 M debt into shares (30% market cap; at a price in line with its trading price) and 2 capital increases worth € 35 M each (~35% market cap), the first with pre-emptive rights and the second reserved for the Amodio family (16% OHL) and Tyrus that would obtain a price below € 0.40/sh. (>42% discount to share price). The deal includes a maturity extension for 3 years and a higher interest (not specified). Awaiting the confirmation of the terms of the agreement and the green light by OHL’s banks (that could be blocking the agreement given the lack of guarantees), we welcome this agreement, as it should ensure the company’s financial viability, however, we stress that these conditions are much less advantageous than those rumoured by the press, and we see a limited impact on valuation (+3% BS(e), positive thanks to the debt relief that is negatively offset by the capital increases), and thus we keep our T.P. (€ 0.60/sh., -13% potential) and recommendation unchanged.