IBERIAN DAILY 31 MARCH (ANÃLISIS BANCO SABADELL)
NEWS SUMMARY: ACS, BANKING SECTOR, EUSKALTEL, HOME BUILDERS SECTOR, IAG, LIBERBANK, MELIÃ HOTELS, NH HOTELES, TELECOM SECTOR.MARKETS YESTERDAY AND TODAY
Last-minute rally
Global markets were highly volatile, ending with gains (except the IBEX, which was hit by the weight of its banks) after Trump decided to extend to 30/04 the quarantine measures in order to fight the coronavirus crisis (instead of 12/04). With this in mind, experts expect the economy to normalise in early June, although it is calculated that the coronavirus will cause around 200,000 deaths in the US. The WHO has warned that confinement will have to be longer than initially expected in order to control COVID-19. On the positive side, J&J has announced that it will begin to test a vaccine on humans in September. In the Euro Stoxx, the best-performing sectors were Chemicals and Financial Services, whereas Banks (-7%) and Travel & Leisure once again fell the most. On the macro side, in Spain March’s preliminary inflation figure slowed more than expected and will probably be negative in the short term. Today the Cabinet could adopt new measures to underpin the economy. In the euro zone, March’s economic climate index fell slightly less than expected, whereas March’s consumer confidence confirmed the preliminary data. In the US, pending home sales rallied unexpectedly. In Japan, February’s preliminary industrial output slowed less than expected. In China, March’s PMI beat expectations, with the manufacturing index rising to 52 (from 35.7) and services to 52.3 (from 29.6), although the PBoC warned that reaching the GDP’20 target of 4%/5% will be difficult without more stimuli.
What we expect for today
We expect a slightly bullish opening. Currently, S&P futures are up +0.75% (the S&P 500 ended +0.99% vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 57.08%). Asian markets are trading with mixed results (Japan -1.14% and Hong Kong +0.66%).
Today in the UK and Spain we will learn the final 4Q’20 GDP, in Germany March’s unemployment, in the euro zone March’s preliminary inflation and in the US March’s consumer confidence. Today the Italian treasury will issue up to € 8.5 Bn in 5Y and 10Y bonds and 3Y FRN.
COMPANY NEWS
LIBERBANK, BUY
LBK communicated yesterday to the CNMV that the bank postpones for a later JGA (without determining a date) the proposal for the distribution of profit'19 removing this item from the agenda of the JGA whose first call is today. We recall that LBK had proposed the distribution of 22 M euros (0.007 euros / share; yield 5%).
Being a suspension and not a cancellation, the bank is not obliged to reformulate annual accounts. LBK maintains in the agenda the authorization to redeem the shares bought in treasury stock (c.2% of the capital).
Positive news, since were expecting the cancellation of the DPA’19. LBK has a high level of capital and the payment of the dividend is only -13p.b. in the CET1 ratio, which in Dec’19 stood at 13%. We see it very likely that it will pay from October 20, complying with the directive of the ECB.
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.
Euskaltel SA is a Spain-based company engaged in the provision of integrated telecommunication services. The Company's activities are divided into three segments: Residential, Business, as well as Wholesale and Other. The Residential segment provides fixed and mobile telecommunication services, broadband and wireless Internet, as well as digital television (TV) as a single service and in packages. The Business division primarily offers fixed and mobile telephony, as well as Internet access for enterprises. The Wholesale and Other area serves wholesale customers and is responsible for the delivery of communication services, such as infrastructure leasing, information technology (IT) outsourcing, as well as sell of installation material and electronics. The Company operates in the Basque Country, Spain.
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.
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