IBERIAN DAILY 01 APRIL (ANÃLISIS BANCO SABADELL)
NEWS SUMMARY: AENA, ARCELOR MITTAL, ELECTRICITY AND GAS SECTOR, FERROVIAL, FLUIDRA, IAG, INSURANCE SECTOR, MERLIN PROPERTIES, PRISA, TELECOM SECTOR.MARKETS YESTERDAY AND TODAY
More stimuli for the IBEX
The IBEX 35 led the gains in European stock markets after the Cabinet approved a wide range of additional aid measures to try to mitigate household liquidity tensions (special subsidy for household and temporary employees and a plan for State guarantees for the most vulnerable renters) and for self-employed and small businesses (moratorium of up to 6 months in Social Security payments). In the Euro Stoxx, the best-performing sectors were Basic Materials and Media, whereas Consumer Goods and Banks had the biggest drops. On the macro side, in Spain the final 1Q’20 GDP fell -0.1% to 1.8%, while in the UK it remained at 1.1%. In the euro zone, March’s preliminary inflation fell more than expected. In Germany, March’s unemployment retained the previous month’s figure, as expected. In the US, the Fed launched a new programme to give other central banks better access to USD during the coronavirus crisis, allowing their US treasury debt holdings to be exchanged for 1D USD loans. In China, the PBoC announced that it is leaving 7D repos at a record low, -20bps to 2.2% (the biggest cut in 5 years). The Caixin manufacturing PMI for March (including a broader range of smaller-sized private companies) confirmed the recovery of the official PMI, rising from 40.3 to 50.1. In Japan, the Tankan manufacturing index fell less than expected.
What we expect for today
We expect a bearish opening in Europe, consolidating the rally from the past few days and dragged down by the greater pessimism surrounding COVID-19 spreading in the US, where Trump admitted that the number of deaths could end up exceeding 200,000. Currently, S&P futures are down -3% (the S&P 500 ended -1.85% lower vs. its price at the closing bell in Europe). Volatility in the US remained stable (VIX 53.54%). Asian markets are sliding (Japan -3.2% and Hong Kong -1.4%).
Today in the euro zone we will learn February’s retail sales and the Sentix investor confidence index and in the US manufacturing ISM and construction spending for February. In debt auctions: Germany (up to € 4 Bn in 5Y bonds).
COMPANY NEWS
FLUIDRA. Withdraws its 2020 guidance that will be updated with the 1Q’20 results.
The company announced yesterday that it withdraws its 2020 guidance (EBITDA of € 240-260 M / -4% vs. consensus and +5% vs. our estimates), that it has €~406 M of cash (~35% of NFD) and that it has no refinancing needs over the next 12 months or significant maturities until 2023. FDR has suspended possible dividend payments until further notice. Having already cancelled its DPS’19 in 2018, it remains to be seen whether the dividend payment against 2020 results will be made (expected for 2021; DPS’20 of € 0.14/sh. BS(e), 1.6% yield). Awaiting further details, we do not rule out a cut of around -20% to EBITDA’20, with an impact of around -10% (bringing our T.P. to levels of € 9.00/sh.). Still, we would not see attractive upside potential from these levels.
Aena SME SA, formerly Aena SA, is a Spain-based company primarily engaged in the airports operation. Its activities are divided into four segments: Airports, which comprises Aeronautical subdivision, responsible for the management of airports, jetways, security, handling, cargo and fuel services, among others, as well as Commercial subdivision, including duty-free and specialty stores, restaurant services, car rental, as well as banking services and advertising; Services outside the terminal, which manages real estate assets, such as parking lots, warehouses and lands; International, which comprises operations of Company's subsidiary, Aena Desarrollo Internacional SA, that invests in other airport owners principally in Mexico, Colombia and the United Kingdom; and Others, encompassing corporate activities. It manages tourism, hub and regional airports, as well as heliports and general aviation areas. Furthermore, its destination range comprises Europe, the Americas, Asia and Africa.
Ferrovial is a transportation company based in Spain. Co. is engaged in operations in the transportation sector. Co. specializes in the design, construction, management, administration and maintenance of transport infrastructures. Co.'s services range also includes the maintenance of parking lots, and land-, sea- and air-based transport networks. Co. is also engaged in the promotion and operation of short-stay parking lots, parking regulation and management services and promotion and sale of residents' parking.
Fluidra is engaged in the manufacture and commercialization of accessories and specific products for swimming pools, irrigation, and water treatment and purification systems.
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.
Merlin Properties SOCIMI SA is a Spain-based company engaged in the operation of a real estate investment trust (REIT). The Company focuses on the acquisition, management and rental of commercial properties located in the Iberian Peninsula, primarily in Spain. The Company's activities are divided into the following segments: Office buildings, operating a portfolio of office space; High-street retail, engaged in leasing retail stores; Shopping centers, engaged in managing department stores; Logistics, operating logistics warehouses and distribution centers, and Others. The Company's other activities include property management services rendered to third parties.
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