EUR 100.00 For Business Accounts Only

IBERIAN DAILY 05 SEPTEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: AEDAS, INDRA, MEDIASET ESPAÑA, TELEFÓNICA, UNICAJA.

MARKETS YESTERDAY AND TODAY

Gains continue
The better final services PMI data in the euro zone, especially thanks to the rise of Spain and Germany, fuelled gains in stock exchanges although the appreciation of the euro halted rises. In the Euro STOXX, all sectors saw gains, led by Basic Resources and Automobiles while Real Estate and Food were the worst performers. On the macroeconomic level, in the euro zone, August’s final services PMI improved one tenth unexpectedly and retail sales fell less than expected. In Italy, G. Conte accepted the offer to become PM by the new government between the M5E and PD. In the UK, the Parliament approved the labour proposal that prevents a no-deal Brexit on the 31st Oct, blocking the possibility of early elections requested B. Johnson, which suggests a new extension of Brexit through the 31st of Jan’20 or even later, as elections could be earlier held in the UK. In the US, R. Kaplan from the Fed claimed actions before the slowdown affects consumption while J. Williams outlined the strong growth of the US economy. The Fed Beige book admitted between modest and moderate growth, underpinned by private consumption. Meanwhile, the US announced it will resume talks in October when China sends a delegation to negotiate. In China, Hong Kong Chief Executive C. Lam withdrew the extradition draft to China, which could ease protests on the streets.
What we expect for today
Stock markets would open with gains that would exceed +1.0%, with cyclical sectors and the hardest hit by international trade such as Automobiles, Basic Resources, Technology and Banks leading gains in view of expectations of new negotiations. Currently, S&P futures are up +1.09% (the S&P 500 closed +0.12% higher vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 17.33%). The Asian markets that are open are climbing (Hong Kong +0.35% and Japan +2.47%).
Today in Germany we will learn July’s factory orders, in the US August’s ADP private employment survey, non-farm productivity and 2Q’19 unit labour costs, weekly jobless claims, July’s final durable goods orders and August’s non-manufacturing ISM. As for auctions, Spain will issue € 4 Bn in bonds due 2024, 2029 and 2066 and France € 10.5 Bn in bonds due 2029, 2034, 2039 and 2050.


COMPANY NEWS

MEDIASET ESPAÑA. AGM approves merger with Mediaset Italia and purchase of Mediaset shares. SELL
In yesterday’s AGM both Mediaset Italia and Mediaset España approved the merger of both companies (with at least 44% of votes in favour in Mediaset Italia). However, we still see three hurdles to the merger: (i) the percentage of the shareholders opposing the merger and requesting a refund means (following a period set aside to place the shares) an amount of more than € 180 M (~5% NewCo), which is the established limit; (ii) the courts rule in favour of Vivendi’s claim (Vivendi holds a 29% stake in Mediaset Italia), as the company has vehemently opposed the merger; and (iii) the company receives corresponding regulatory authorisation. Awaiting these points, yesterday Mediaset (largest shareholder in TL5 with a 51.3% stake) announced that it will purchase € 50 M of shares (2.5% of market cap) through 31 Oct’19, which could be a clear support for the stock. With all this in mind, we continue to take a cautious stance on the stock due to the deterioration of the advertising market and the drop in TV consumption.