IBERIAN DAILY 30 DECEMBER (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: AENA, CAIXABANK, ENAGÁS, FERROVIAL, MAPFRE.MARKETS YESTERDAY AND TODAY
Stock markets fall in the absence of macro references
The penultimate day of the year cooled the rally of the European stock markets of the past few sessions as restrictions continue to be toughened in Europe due to the Omicron variant despite its low lethality (France and Greece announced yesterday mandatory teleworking for 3 weeks starting on 3 Jan). Thus, within the Euro STOXX, almost all sectors ended in the red, with Technology and Autos leading the drops, vs. the gains posted by Construction and Basic Resources. On the macro side, in Europe, November’s M3 money supply slowed more than expected. In the US, November’s pending home sales recovered vs. the previous month. Separately, the WHO warned of a global tsunami of Covid-19 infections after many countries, including the US and France, reported record levels of new cases.
What we expect for today
The European stock markets would open flat in view of the lack of macro references and following the mixed performance of the Asian stock markets. S&P Currently, S&P futures are down -0.04% (the S&P 500 ended flat yesterday vs. its level at the European closing bell). Volatility in the US dropped (VIX 16.95). Asian markets are trading with mixed results (China’s CSI 300 +0.80% and Japan’s Nikkei -0.40%).
Today we will learn in Spain December’s inflation data, and in the US the weekly jobless claims.
COMPANY NEWS
MAPFRE/CAIXABANK. Conditions of the termination of the bancassurance agreement. BUY/BUY.
MAP will receive € 571 M for the termination of the contract, which stands below market expectations, which ranged from € 700 M to € 1 Bn, and also below our estimate of between € 660 M and € 720 M. MAP has expressed disagreement in two aspects, and thus, it will claim: (i) a 20% compensation for the termination of the contract vs. the 10% compensation granted, which will be subject to a new arbitration process and might mean an additional payment of € 52 M in 2022e; (ii) the valuation of the Life business (€ 294 M), which implies P/BV and P/E’20-21 ratios of 0.9x and ~5x, respectively, vs. >1.2x P/BV and >10x P/E in similar transactions. MAP reserves the right to take legal action, which we believe would entail a long process that might continue for years. In the case of MAP, it will account € 171 M of capital gains in 4Q’21 (+24% in Net Profit’21 BS(e)) and will use ~40% of the funds for restructuring plans and debt optimisation, with annual cost savings of €~45 M from 2023e onwards (~5% of the costs base BS(e)). It also reiterates its commitment to returning to pre-pandemic DPS levels (€ 0.145/sh.; 8% yield vs. DPS’21e of € 0.133/sh. BS(e) and € 0.14/sh. consensus), which we expect now to be achieved with the DPS’21 (AGM in 1Q’22). We welcome the closing of the transaction and see room for estimate increases thanks to the efficiency programmes. In the case of CABK, the transaction has no relevant impact neither on results nor on the CET ratio (-7bps vs. 12.68% currently) and thus, we expect no impact on the share price either.
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.
Caixabank is an investment company based in Spain. Co. is involved in investment portfolio management activities across two areas: Services and Financial Business and Insurance. In the services area, Co. provides investment solutions for companies involved in the infrastructure, energy, services and entertainment sectors. In the financial business and insurance area, Co. is engaged in the investments for international banks, insurance and specialist financial services. Co. focuses most of its banking investments in India, China, the U.S., and Central and Eastern Europe with a particular interest in retail banking. Co. is also involved in the disinvestments activities.
Enagas is a gas transportation company based in Spain. Co. is engaged in the technical distribution and storage of gas through pipelines as well as the provision of regasification services. Co. and subsidiaries are engaged in the ownership, administration, storage, pipeline transportation, distribution flow, and sale of natural gas. As a transport company, Co. also provides gas and manages the gas infrastructures.
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.
Mapfre is an insurance company based in Spain. Co. is the parent company of a group engaged in the underwriting and provision of insurance in Spain and abroad. Insurance policies provided include: life, non-life, accident, home-owner, general and health. Through its subsidiaries, Co. is also engaged in the provision of reinsurance, the management of investment funds, pension funds and pension plans, real estate and related services. On the domestic market, Co.'s activities include managing investment funds, pension funds and pension plans, real estate and other service businesses.
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