IBERIAN DAILY 30 JUNE (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: AEDAS HOMES, GRIFOLS, REDEIA.Inflation drags down the Ibex
It was a session of sell-offs on the European stock markets, and especially for the Ibex after inflation increased above expectations in June to 1985’s highs of 10.2% YoY, dragging down the index by more than -1.5%. Thus, within the Euro STOXX, all sectors except for Energy and Basic Resources fell, with Real Estate and Autos posting the biggest losses. On the macro side, in the Euro zone, June’s consumer confidence slowed less than expected thanks to the services data. In Germany, inflation slowed more than expected in June to 7.6% YoY thanks to the Govt.’s fuel discounts on fuels and transport costs. In Spain, beyond the higher-than-expected inflation figure, May’s retail sales slowed unexpectedly. At the NATO meeting, a Strategic Plan was agreed upon for the next decade, focused on the Russian threat. In Sintra, the chairmen and governors of the main Central Banks pointed out the need to act quickly in view of more persistent inflation than initially expected. In this regard, L. Mester (Fed) stated that he estimates rates of between 3% and 3.5% at the end of the year, and 4% next year (vs. Fed Funds currently at 3.3%). In the US, the third and final reading of the 1Q’22 GDP was lowered to -1.6% YoY. In Japan, June’s industrial output contracted unexpectedly. In China, June’s PMIs showed signs of recovery after the easing of Covid-19 restrictions in the last month. Thus, the manufacturing PMI climbed somewhat less than expected but stands above 50 for the first time since February, whereas the services PMI beat expectations reaching one-year highs.
What we expect for today
European stock markets would open with losses, although they would be softened by the solid data out of China. Currently, S&P futures are down -0.3% (the S&P 500 ended unchanged vs. the European closing bell). Volatility in the US decreased (VIX 28.16). Asian markets are mixed (China’s CSI 300 +1.8% and Japan’s Nikkei -1.4%).
Today in the euro zone we will learn May’s unemployment rate, in Germany June’s unemployment, in the UK the final 1Q’22 GDP and in the US personal income and outlays and weekly jobless claims. In debt auctions: Italy (€ 7 Bn in bonds due 2027, 2029 and 2032).
COMPANY NEWS
GRIFOLS, BUY
According to the press, a proposal to participate in a potential capital increase in GRF would have been submitted to the investment funds KKR, CVC, Cinven and EQT, among others.
News without impact. Beyond the rumours about potential investors, we expect the company to clarify today at its Investor Day meeting (at 10:30 CET) whether a capital increase is really on the table and, if so, under what conditions. We recall that the press hints at a transaction of around € 2 Bn (~18% of market cap prior to the news story; 24% of gross debt).
Aedas Homes is engaged in the housing development business in Spain. The company has a portfolio of approximately 1.5 million square meters of land that it develops for residential purpose. Co. develops multifamily homes for the housing market in Madrid, Catalonia, Levante and Majorca, Costa del Sol and Seville.
Red Electrica is engaged in the transmission of electrical energy, the operation of the system and the management of the transmission network in the Spanish electricity system. In addition, through its subsidiaries, Co. is engaged in the acquisition, holding and management of foreign securities, co-ordination of international exchanges, provision of telecommunications services for third parties, provision of consultancy, engineering and construction services outside the Spanish electricity system, securing of funds, carrying out of financial transactions and provision of financial services.
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