IBERIAN DAILY 04 JANUARY (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: ACS, IAG, PRISA, VOCENTO.MARKETS YESTERDAY AND TODAY
The market rings in the new year after a turbulent 2020
In the last session of the year there were sharper drops in European vs. US stock markets. At the last session of the year, open for only half day and with low volume, the attention continued to be focused on the performance of vaccination, new strains of the virus and fiscal stimulus. In European indices, the UK and Spain were the worst performers. In the Euro STOXX, Retail and Technology stood out once more as the best-performing sectors vs. the drops of Construction, Food & Beverages and Travel & Leisure. On the macroeconomic level, in the US only good weekly jobless claims were released. Separately, Trump threatened the Georgia state secretary by telephone to “find” the thousands of votes that would give him the presidency before Congress certifies the definitive result and the second electoral runoff for the Georgia Senate is held on 5 January. In China, December’s Caixin manufacturing PMI was slightly disappointing, whereas in Japan it improved, returning to levels of 50.
What we expect for today
Despite the negative news from the third wave of Covid cases and the threats of new restrictions (UK, Germany), European markets would open with slight gains in view of the solid crude performance. Currently, S&P futures are up +0.06% (the S&P 500 closed +0.7% higher vs. its price at the closing bell in Europe). Volatility in the US is flat (VIX 22.7%). Asian markets are trading with mixed results (China +1%, Japan -0.6% in view of the threat of a State of Emergency in Tokyo).
Today in Europe we will learn December’s final manufacturing and services PMI, in Spain December’s manufacturing PMI and in the US December’s final manufacturing PMI. OPEC+ will hold a virtual meeting.
COMPANY NEWS
VOCENTO/PRISA. Rumours of a bid by VOC that we see as highly unlikely.
According to El Confidencial, last week VOC would have approved a capital increase to acquire PRS’s media unit, with the latest rumours suggesting a value of € 300-350 M. Specifically, there is mention that the capital increase would total 188.3 million shares or € 169 M at the current share price, although the news story states that the new shares would be issued at € 0.56/sh. (a -50% discount to the current value), and thus another € 200 M of debt would be needed to purchase the business. Note that VOC’s market cap is € 115 M. The news story indicates that PRS has rejected this “bid”, which we see as completely unfeasible and impossible financially due to the debt level the company would reach from the already-demanding current level of 3.6x NFD/EBITDA.
ACS Actividades de Construccion y Servicios is a holding company. Through its subsidiaries, Co.'s activities are divided into the following areas: Construction, engaged in the construction of civil works, and residential and non-residential building construction; industrial services, engaged in the development of applied engineering services, installations and the maintenance of industrial infrastructures in the energy, communications and control systems sectors; services, groups together environmental services, the outsourcing of building maintenance services, logistics and transport services; and concessions, mainly engaged in transport infrastructure concessions.
International Airlines Group is an international scheduled airline and global premium airlines. Co.'s principal place of business is London with significant presence at Heathrow, Gatwick and London City airports.
Vocento is engaged in the editing, distribution and sale of unit or periodic publications of general, cultural, sport, artistic or any other nature type of information, as well as the printing and sale of printing warehouses and any other activities related to the editorial industry and graphic arts. Co. is also engaged in the establishment, utilization and sale of radio stations, television stations and other types of installations for the emission, production and promotion of audiovisual media, as well as the production, edition and distribution of discs, tapes, magnet phonic tapes, programs, films and all other types of communication media.
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