IBERIAN DAILY 18 SEPTEMBER (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: AMADEUS, ATRESMEDIA, BANKIA, CAIXABANK, FCC, MÁSMÓVIL, MEDIA SECTOR.MARKETS YESTERDAY AND TODAY
Stock markets ended in the red
It was a session of losses in Europe, which were replicated in Wall Street, dragged down by growth and momentum. Within the Euro STOXX, almost all sectors ended in the red, with Travel & Leisure and Pharma being the best relative performers vs. Banks and Insurance, which saw the biggest losses. On the macro side, in the Euro zone, August’s final inflation data was confirmed at -0.2% YoY, as was the core inflation figure (at 0.4% YoY preliminary). In the UK, the BoE kept interest rates unchanged at 0.10%, and maintained its £ 745 Bn debt purchase programme, although it left the door open to negative interest rates. From the ECB, L. de Guindos claimed that the institution will determine the monetary policy in accordance with how inflation evolves and set the limits, on dividend payments that will depend on the economic recovery. In the US, both building permits and new housing starts fell slightly more than expected in August. Weekly jobless claims climbed above expectations. The Philadelphia Fed index rose in line with expectations with a strong increase in capex expectations. Lastly, the standstill on the tax package continues although Kudlow admitted that the additional stimuli of US$ 1.5 Trillion is feasible for Trump. In Japan, August’s inflation and core data dropped in line with expectations to -0.4% and -0.1% YoY.
What we expect for today
Currently, S&P futures are currently down -0.12% (the S&P 500 was up +0.22% vs. its price at the closing bell in Europe). Volatility in the US rose (VIX 26.46%). Asian markets are climbing (Japan +0.15% and Hong Kong +0.3%).
Today, in the UK we will learn August’s retail sales, and in the US, the University of Michigan sentiment. In ratings, S&P and Moody’s will revise Spain’s rating (A stable and Baa1 stable, respectively).
COMPANY NEWS
CAIXABANK, BANKIA. Merger details. Targets above expectations. We reiterate BUY in CABK.
Yesterday CABK and BKIA approved their merger, with the project to be presented today at 9:00. The main details announced this morning are: (i) exchange ratio of 0.6845 shares in CABK x 1 share in BKIA and exchange price for BKIA € 1.41, with a +36% premium over the closing price from 03/09 (+20% over the base price taken from 17/09). This means a share of 74.2% CABK/25.8% BKIA and stakes for the FROB and Criteria of ~16% and 30%, respectively; (ii) annual cost savings of € 770 M (10% in 2021e; 90% in 2022e and 100% in 2023e) or ~42% of BKIA’s cost base, with associated restructuring costs reaching € 2.2 Bn; (iii) € 215 M of revenues synergies in savings products starting in 2025; (iv) CET1 ratio of 11.6% (after having absorbed € 2.2 Bn of adjustments from the initial integration and restructuring), meaning a buffer over MDA CET1 of >310bps; (v) +28% impact on CABK’s EPS’22e and RoTE of >8%; (vi) NPL ratio of 4.1% and coverage ratio of 64%. In the adjustments from the initial integration, € 700 M are earmarked for coverage with an impact of +2pp on the ratio; (vii) tentative calendar: EGM in October and execution in 1Q’21. In the absence of details on business forecasts, the impacts announced are better than expected, in cost savings (€~550 M BS(e), in line with the consensus), accretive impacts (RoTE and EPS, where we expected +14%), capital position and coverage levels. We expect a positive reaction in CABK, whereas BKIA should adjust to the exchange price (-2.1% vs. yesterday’s closing price).
Amadeus is a transaction processor for the global travel and tourism industry. Co. provides transaction processing power and technology solutions to both travel providers (including full service carriers and low-cost airlines, hotels, rail operators, cruise and ferry operators, car rental companies and tour operators) and travel agencies (both online and offline). Co. acts both as a worldwide network connecting travel providers and travel agencies through a processing platform for the distribution of travel products and services (through the Distribution business), and as a provider of a portfolio of IT solutions which automate certain business processes (through the IT solutions business).
Atresmedia Corporacion De Medios De Comunicacion is a television and radio broadcasting company based in Spain. Co. is engaged in the indirect management of television and radio services, which include the broadcasting, creation, production and distribution of television and radio programming, and the sale of advertising time. Group companies mainly carry on business activities relating to the production, copying and broadcasting of sounds and images, and TV and Internet home shopping. Co. provides National and World Digital Television Services. Co. is the parent company of Grupo Antena 3.
Bankia is a financial institution based in Spain. Co. is primarily engaged in operations in the banking sector. Co.'s business operations are structured into seven areas: Retail Banking, Business Banking, Private Banking, Asset Management and Bancassurance, Capital Markets and Holdings. Co. offers financial products and services to various customer segments, such as individuals, small and medium enterprises, large corporations, as well as public and private institutions. As of Dec 31 2014, Co. had total assets and total customer deposits of Euro233,648,603,000 and Euro106,806,698,000 respectively.
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.
Fomento de Construcciones y Contratas is the parent company of a group engaged in sanitation services, cleaning, maintaining, purification and distribution of water, construction of highways, hydraulic works, marine works, air and rail transport infrastructure, urban developments, housing, non-residential buildings, office buildings, toll highways, parking garages, marinas and water treatment plants. Co. is also engaged in the manufacture and sale of cement and cement infrastructures, such as precast concrete elements; and in the financial markets, and real estate development, leasing and tourism.
Masmovil Ibercom SA, formerly World Wide Web Ibercom SA, is a Spain-based company primarily engaged in the telecommunication sector. The Company focuses on the sale and distribution services for Internet, Data Center and Telecommunications. The Company's product and services portfolio comprises Internet access through Asymmetric Digital Subscriber Line (ADSL) and Symmetric Digital Subscriber Line (SDSL) technologies, Internet domains and Domains Management and Registration Service through IberDNS application, Web hosting, virtual servers, dedicated servers, telephony services and routers. The Company also offers collocation services through two Internet Data Centers located in Madrid and San Sebastian. It operates through subsidiaries, such as Embou Nuevas Tecnologias SL and Ebesis Sistemas SL, among others. The Company owns a number of brand names, such as Pepephone, Yoigo and Llamaya.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.