EUR 100.00 For Business Accounts Only

IBERIAN DAILY 30 NOVEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACCIONA ENERGÍA, ACS, CELLNEX, INDITEX, NATURGY, OHLA, SOLARIA, VOCENTO.

MARKETS YESTERDAY AND TODAY

Recovery after Omicron, but today will be another roller coaster day
Global stock markets recovered, once again reducing the risks of the new Covid variant. In the Euro STOXX, the best-performing sectors were Technology and Basic Resources whereas Household and Automobiles saw the biggest drops. With this in mind, yesterday the CEO of Moderna, S. Bancel, warned of a likely lower effectiveness of its vaccine against the new variant and that it would need several months to adapt it and produce it in large enough quantities, which is leading to sharp drops in oil and futures. On the macro side, in Germany, November’s inflation climbed to highs from the past 20 years, standing at 5.2%, above expectations. Several members of the ECB like I. Schnabel stated that November could be a month of peak growth. In the euro zone, November’s economic climate index came in below expectations. Separately, the EC would be readying an investment plan in infrastructures worth € 300 Bn for 2026 in order to fight the influence of the Belt and Road project in China on neighbouring countries. In Mexico, October’s unemployment rate dropped unexpectedly. In the US, October’s pending home sales rose more than expected. From the Fed, J. Powell warned on the risks for price stability and employment stemming from the rise in Covid-19 cases over the past few days and omitted references to tapering. Separately, Biden has ruled out aggressive lockdowns to combat the new Covid variant. In Japan, October’s industrial output came in below expectations, and retail sales recovered more than expected. In China, the services and manufacturing PMIs for November beat expectations. Lastly, the drop in oil freight could be another reason for OPEC+ to change the pace of pumping (+400,000 b/d expected) in its meeting to be held on 02/12.
What we expect for today
Moderna’s notification of a possible lower efficacy of vaccines for the Omicron variant suggests a bearish opening for the European session, with Travel&Leisure, Energy and Banks being the most vulnerable sectors. Currently, S&P futures are down -0.59% (the S&P 500 ended practically unchanged vs. its level at the European closing bell). Volatility in the US dropped (VIX 22.96). Asian markets are falling (China’s CSI 300 -0.8% and Japan’s Nikkei -1.6%).
Today in Germany we will learn November’s unemployment, in Spain October’s retail sales, in the euro zone November’s inflation and in Brazil September’s unemployment rate. In debt auctions: Germany (€ 3 Bn in bonds due 2028) and Italy (€ 5.75 Bn in bonds due 2026, 2029 and 2032).

COMPANY NEWS

VOCENTO. Sale of Net TV and Veralia Cine. BUY
Yesterday VOC announced the sale of Net TV (55%) and Veralia Cine (69.79%) to Squirrel Capital for € 18 M plus an adjustment of €~6.6 M (estimated net financial position). The reduction to total NFD will be around -37% (NFD/EBITDA ratio below 0.5x) and will generate €~9.7 M of capital gains (vs. € 8.9 M Net Profit’22e). The group will see its EBITDA fall by around €-6.3 M (14.6%) and cash generated by around €-3.5 M (15%), while the impact on the valuation would be -3% (Net TV has been sold at -27% below our valuation and Veralia in line). Although with the negative aspect of the valuation being below expectations in Net TV (although with a small impact of -3% that still leaves >55% upside), we think this is a good move, as it allows the company to reduce debt even further, is the definitive abandonment of non-core businesses and puts more weight behind the strengthening of the strategic businesses.

INDITEX. Changes in senior management. Mr. Isla leaves the company and Marta Ortega assumes the position. SELL.
Inditex’s Board of Directors has agreed to appoint Marta Ortega (daughter of the founder, Amancio Ortega) chairwoman, and Óscar García Maceiras, CEO, replacing Pablo Isla and Carlos Crespo, respectively. According to the company, the new structure will include an Executive Committee made up of members from different corporate segments with a long track record in the Group. Pablo Isla, who had been in the company for 17 years, will leave his position in March’22 whereas Carlos Crespo will become the Chief Operating Officer. Although in principle we do not foresee any changes to the company’s well-defined strategy, we believe that this news could have a negative slant on the stock market as Mr. Isla had a great reputation in the sector.