IBERIAN DAILY 22 OCTOBER (ANÃLISIS BANCO SABADELL)
NEWS SUMMARY: ACCIONA, ALMIRALL, MELIÃ HOTELS, METROVACESA, OHL, SACYR, SANTANDER, SIEMENS GAMESA, VIDRALA.MARKETS YESTERDAY AND TODAY
Results underpin stock markets for the time being
The week got off with gains in Europe amid positive signs in the trade talks between the US and China (L. Kudlow sees opportunities of an agreement in November and the possibility of cancelling the tariff rise expected for December) and business results. Thus, in the Euro STOXX, Banks and Travel&Leisure were the best-performing sectors vs. Personal Consumption and Media that saw drops of -0.5%. On the macroeconomic level, in Germany, September’s production prices came in slightly better than expected. In the UK, the Parliament’s president rejected the vote of B. Johnson’s agreement already discussed last Saturday but after the submission of the draft on the exit agreement (WAB) yesterday it will be subject today to the second reading and vote with possible amendments (in this case it would mean an extension of Brexit beyond 31/10). Meanwhile, the government insists that the country will leave the EU on the 31st of October. In US Results, Halliburton’s figures were in line and Cadence’s disappointing.
What we expect for today
Stock markets would open with slight gains given the good progress of talks between the US and China. Currently, S&P futures are unchanged (the S&P 500 was up +0.15% vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 14.00%). The Asian markets that are open are climbing (Hong Kong +0.10%).
Today the British Parliament will vote the exit agreement law. In the US we will learn October’s Richmond Fed index and September’s existing home sales. In US Results, PACCAR, McDonald’s, Harley-Davidson, Procter&Gamble, Hasbro and Whirlpool, among others, will release their earnings.
COMPANY NEWS
METROVACESA. Interest shown in the developer. BUY.
According to the press, Santander (49.4% of MVC) would have received signs of interest from several investors to study the feasibility of an M&A move on MVC, although the bank would not actively be seeking a deal of this kind. These rumours normally boost short-term share prices in the sector, and we do believe MVC’s share price is very cheap, as it is trading with a -51% discount to NAV as of June’19. Thus, we do not rule out future M&A moves, although we do not think Santander (MVC is not a strategic asset for the bank) is willing to sell at these prices (it would generate capital losses) and it does not appear that in this case there are late-stage negotiations. We reiterate our BUY recommendation with T.P. of € 15.18/sh.
OHL. GVM negotiates the sale of its stake to the Mexican family Amodio. SELL.
According to the press, Villar Mir would be negotiating the sale of his stake in OHL (31.98%; 30.64% directly) The deal could be closed with a slight premium vs. current prices and that the Villar Mir family would keep a residual stake so as to avoid that the buyer is forced to launch a takeover bid for 100% (as it would not exceed 30%). Although it was already known that GVM was in talks to sell his stake, in our view, the willingness of an investor to pay +96% vs. our valuation and +10% vs. consensus is positive news, in any case, this deal would have no impact on our fundamental valuation, and if the sale of a stake
Acciona is the parent company of a construction group. Co. is engaged in general construction activities in the areas of civil engineering and buildings, including railways, marine and hydraulic works, motorways and airports, town planning, conduits, pavements, parking lots, and industrial and urban buildings. In addition, Co. is engaged in the provision of real estate services, the operation of parking lots, telecommunications, services, ecology and alternative means of energy. Co.'s operations are organized in six business divisions: Infrastructures, Real Estate, Energy, Water, Environmental & Urban Services and Logistic & Transport Services.
Almirall is engaged in the acquisition, manufacture, storage, sale and mediation in the sale of pharmaceutical specialties and products and all manner of raw materials used to prepare pharmaceutical specialties and products. Also, Co. acquires, manufactures, storages, sales and mediates in the sale of cosmetics, chemical, biotechnological and diagnostic products for human, veterinary, agrochemical and food-industry use, as well as all manner of utensils, complements and accessories for the chemical, pharmaceutical and clinical industries. In addition, Co. is engaged in the acquisition, sale, lease, subdivision and development of land lots, land and properties of all kinds.
Banco Santander is a holding company, providing a range of financial products. Co.'s products and services include: retail banking business that covers all customer banking businesses; wholesale banking business; as well as asset management and insurance business. Co.'s principal operations are in Spain, the U.K., Portugal, Germany, Italy and Latin America. As of Dec 31 2014, Co.'s total assets amounted to Euro1,266,296,000,000 and total customer deposits amounted to Euro647,627,000,000.
Melia Hotels International is the parent company of a group engaged in the acquisition, management and operation of hotels. Co. operates its hotel network in Germany, Argentina, Brazil, Bulgaria, Cabo Verde, Chile, China, Costa Rica, Croatia, Cuba, Egypt, Spain, United States, France, Greece, Netherlands, Indonesia, Italy, Luxembourg, Malaysia, Mexico, Panama, Peru, Portugal, Puerto Rico, United Kingdom, Dominican Republic, Singapore, Switzerland, Tunisia, Uruguay, Venezuela and Vietnam under the followings brandnames: Paradisus Resorts®, Melia Hotels & Resorts®, TRYP Hoteles® and Sol Hotels & Resorts®.
Metrovacesa SA, formerly Metrovacesa Suelo y Promocion SA, is a Spain-based real estate developer. The Company specializes in construction and sale of sustainable housing, both single-family and multi-family residential properties. Its activities also include promotion, urbanization and parceling of real estate in general, as well as real estate management for own benefit or on behalf of third parties. Its asset portfolio includes more than 6 million square meters of building land across Spain, as well as already developed properties in cities, such as Malaga, Almeria, Cordoba, Barcelona and Madrid, among others.
Obrascon Huarte Lain is an international concession and construction groups based in Spain. Co. maintains significant operations in 30 countries across all five continents. Co. is engaged in hospital and railway construction, transport infrastructure concessions, oil and gas, energy, solids handling and fire protection systems and international contracts. Co.'s operations are organized along four divisions: OHL Concesiones, OHL Construccion, OHL Industrial y OHL Desarrollos. Co. is also engaged in real state project developments of mixed use managed by the international hotel chains.
Sacyr is the parent company of a group engaged in the acquisition, development and construction of urban properties for their subsequent rental or resale. Co. primarily leases and sells office buildings and complexes, housing units, and shopping centers. Co. is also engaged in the operation of urban car parking facilities. Co. offers services related to the real estate industry such as technical assistance in energy savings, inventory management, architectural design, telecommunications management, property maintenance, as well as gardening and landscaping. Co. also provides consulting services in the real estate fund management sector.
Vidrala SA is a Spain-based company principally engaged in the glass industry. The Company operates through two segments: Spain and European Union. The Company's activities include the production, distribution and sale of glass bottles and containers used in the food and beverages industries. The Company conducts its own research and development (R&D) operations. It operates production plants and melting furnaces located in such countries, as Portugal, France, Belgium and Italy. The Company owns such subsidiaries as Crisnova Vidrio SA, Inverbeira Sociedad de Promocion de Empresas SA, Gallo Vidro SA, Castellar Vidrio SA, Corsico Vetro SRL, MD Verre SA, Omega Immobiliere et Financiere SA, Investverre SA and CD Verre SA.
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