IBERIAN DAILY 29 MARCH (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: BANCO SANTANDER, EBRO FOODS, EUSKALTEL, FLUIDRA, MAPFRE, NEINOR.MARKETS YESTERDAY AND TODAY
The Technology sector rallies
The main European indices ended the week with gains thanks to the positive macro data releases and despite the announcement of new lockdowns that might slow down economic recovery. Thus, most indices ended the week with rises of ~1%, except for the Ibex and the CAC, which lagged behind and posted slight losses. Within the Euro STOXX, the undisputable leader of the past 5 sessions was Technology (with an increase of around +5%), although Basic Resources also stood out on Friday, both sectors recovering after their poor performance in the previous week. The worst-performing sectors were Retail, Travel & Leisure and Energy on fears of new lockdowns. On the macro side, in Germany, March’s IFO index beat expectations, rising again thanks to the expectations component. Separately, Germany’s Constitutional Court has suspended the approval of the EU Recovery Fund following the appeal filed by a eurosceptic group. This could mean a delay in the distribution of the funds, although the EU maintains its 2H’21 target. In the US, retail inventories came in below expectations. In the Suez Canal, the Evergreen cargo ship might remain aground until the end of the week, which will take its toll on world trade (according to a report by Allianz), with an estimated impact of between € 6 Bn and € 10 Bn on a weekly basis.
What we expect for today
The European stock markets would open with slight losses. Currently, S&P futures are down -0.82% (the S&P 500 ended +0.77% higher vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 18.86). Asian markets are rising slightly (both CSI 300 and Japan +0.2%).
Today we will learn in Germany February’s retail sales, in the US the Dallas Fed manufacturing index for March and in Brazil the job creation data for February. In debt auctions: France (€ 6 Bn in 3M, 6M & 12M T-bills).
COMPANY NEWS
EUSKALTEL/TELECOM SECTOR. TOB from MásMóvil at € 11.17/sh. (+16.5% vs. Friday’s closing price).
MásMóvil has launched a friendly TOB on 100% of EKT at € 11.17/sh. in cash (+16.5% premium vs. last Friday’s closing price, +26.8% on the weighted price of the past 6 months and +31.4% on our T.P.). This price means a 10x EV/EBITDA’20 ratio (vs. 9.1x offered by investment funds for MásMóvil and ~5.5x for the sector) and a 21x EV/Op. CF. The offer has the endorsement of 52.32% of EKT’s share capital (Zegone, with a 21.4%, Kutxabank with a 19.9% and Corp. Alba with a 11%) and is subject to a level of acceptance of at least 75% plus 1 share of the share capital and all due competition authorisations (we do not expect significant obstacles). We believe that the offer is highly attractive for EKT’s shareholders and we believe it will materialise in the end. For this reason, we will change our recommendation to Accept the TOB (from SELL). The reading of this deal is positive for Telefónica (BUY, T.P. € 5.90/sh.), as we expect the level of competition in Spain to be reduced, although a transaction with Vodafone would have been more positive.
Allianz is engaged in the provision of a range of insurance and asset management products and services. Co. has three business segments: Property-Casualty, which provides insurance products to both private and corporate customers, including motor liability and own damage, accident, general liability, fire and property, legal expense, credit and travel insurance; Life/Health, which provides life and health insurance products including annuities, endowment and term insurance, unit-linked and investment-oriented products and private health and supplemental health and long-term care insurance; and Asset Management, which provides institutional and retail asset management products and services.
Banco Santander is a holding company, providing a range of financial products. Co.'s products and services include: retail banking business that covers all customer banking businesses; wholesale banking business; as well as asset management and insurance business. Co.'s principal operations are in Spain, the U.K., Portugal, Germany, Italy and Latin America. As of Dec 31 2014, Co.'s total assets amounted to Euro1,266,296,000,000 and total customer deposits amounted to Euro647,627,000,000.
Cellnex Telecom SA is a Spain-based company engaged in the wireless telecommunications (telecom) business. Its activities are divided into three segments: Broadcasting infrastructure, Telecom site rental, as well as Network services and other. The Broadcasting infrastructure division comprises distribution and transmission of television (TV) and frequency modulation (FM) radio signals, operation and maintenance (O&M) of radio broadcasting network, as well as over-the-top (OTT) radio services, among others. The Telecom site rental division provides access to wireless infrastructure, primarily through infrastructure hosting and telecom equipment co-location, mainly for mobile network operators and other wireless and broadband telecom network operators. The Network services and other division offers connectivity services for a variety of telecom operators and radio communication, among others. The Company also develops 5th generation mobile networks (5G) through Alticom BV.
Ebro Puleva is a food manufacturing group based in Spain. Co. is engaged in the manufacture and marketing, export and import of sugar, rice, dairy products, and products destined for agriculture development and human and animal consumption. Co.'s brand names include: Panzani®, Ronzoni®, American Beauty®, Skinner®, Lancia®, Catelli®, Healthy Harvest®, etc. in pastas and sauces, Mahatma®, Sucess®, Carolina®, Lustucru®, Taureau Aile®, Oryza®, Bosto®, Reis-Fit®, Riceland®, Danrice®, Risella®, Brillante®, Nomen®, La Cigala® and La Fallera® in the rice sector, Puleva®, Ram® and El Castillo® in the dairy sector, and Azucarera® and Sucran® in the sugar sector.
Fluidra is engaged in the manufacture and commercialization of accessories and specific products for swimming pools, irrigation, and water treatment and purification systems.
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.
Neinor Homes SA, formerly Neinor Homes SLU, is a Spain-based company engaged in the real estate sector. The Company focuses on the design, construction and promotion of residential properties. It develops housing projects in various Spanish cities, such as Malaga, Madrid, Barcelona, Cordoba, Vizcaya, Alicante, Almeria and Gerona.
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