IBERIAN DAILY 12 JANUARY (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: ACS, ENCE, NEINOR HOMES, SACYR, SIEMENS GAMESA.MARKETS YESTERDAY AND TODAY
The US backs away from highs
As we wait for the 4Q results season to kick off (with the large banks releasing their earnings on Friday), the European stock markets posted losses despite the EU Sentix investor confidence index rising above expectations in January to its highest level since February. The Euro STOXX backed away from its 10-month highs, falling more sharply after the bearish US opening (dragged down mainly by growth stocks) in view of the opposition that J. Biden might face within his own party to implement an ambitious stimulus plan. Thus, within the Euro STOXX, all sectors posted losses, with Travel & Leisure and Construction being the worst relative performers vs. Media and Chemicals, which were the sectors that fell the least.
What we expect for today
The main European indices would post slight gains, with a better relative performance of value stocks underpinned by rising interest rates as the market considers the possibility of Fed tapering by the end of 2021 and rate hikes in 2023. Currently, S&P futures are flat (the S&P 500 closed down -0.21% vs. its price at the closing bell in Europe). Volatility in the US increased (VIX 24.08%). Asian markets are rising (CSI 300 +1.93%, Japan +0.5%).
Today we will learn in Brazil December’s inflation data. In debt auctions, Spain (€ 6.4 Bn in 6M and 12M T-bills and € 10 M in syndicated 10Y bonds), Italy (€ 7 Bn in 12M T-bills), Netherlands (€ 2 Bn in bonds due 2052), Belgium (€ 3 Bn in 3M and 12M T-bills and € 6 Bn in syndicated 10Y bonds), Germany (€ 600 M in inflation-linked bonds due 2030 and 2046) and Austria (€ 1.38 Bn in bonds due 2030 and 2051).
COMPANY NEWS
NEINOR HOMES. Proposed acquisition of Quabit. BUY. T.P. € 12.28/sh. (upside +12%)
The company announced yesterday the acquisition of Quabit (QBT) through a share swap (1 HOME x ~26 QBT) as well as a number of agreements with creditors that include debt haircuts. If the proposal moves forward, HOME would increase its land portfolio to +16,000 units (vs. 9,000 previously), with an LTV ratio of +15% before synergies (non quantified). The transaction is subject to approval at the AGMs (March/April’21). Awaiting to learn more details on QBT’s portfolio, we believe that the transaction makes strategic and financial sense for HOME. We expect a positive reception (pending quantification based on QBT’s assets). There will be a conference call at 13:00 (CET).
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.
Ence Energia Y Celulosa is engaged in the manufacture and commercialization of wood pulp and derivatives. Co. divides its activities into the following two business lines: Forest Division: Co. manages timberlands in South America and the Iberian Peninsula. Co. is involved in trading of wood, and supplies solid wood products including: plywood, sawn timber, parquet flooring and glued-edge paneling. Co. is involved in forest and environmental consulting. Pulp Division and Energy Production: Co. is engaged in the production of Eucalyptus globulus-based TCF and ECF paper pulp. Co. is also involved in the generation of electricity through biomass power producing plants.
Neinor Homes SA, formerly Neinor Homes SLU, is a Spain-based company engaged in the real estate sector. The Company focuses on the design, construction and promotion of residential properties. It develops housing projects in various Spanish cities, such as Malaga, Madrid, Barcelona, Cordoba, Vizcaya, Alicante, Almeria and Gerona.
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.
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