EUR 100.00 For Business Accounts Only

IBERIAN DAILY 24 AUGUST (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ELECTRICITY SECTOR, SANTANDER.

MARKETS YESTERDAY AND TODAY

Stock markets rise without macro help
It was a positive session on both sides of the Atlantic, with the energy sector standing out in the US following the sharp drops last week. Thus, in the Euro STOXX almost all the sectors closed with gains, with Service Goods and Retail leading the way, compared to the drops in defensive sectors like Real Estate and Utilities. On the macro side, in the euro zone August’s PMIs were a mixed bag, with a disappointing manufacturing component and a positive surprise in the services component. August’s consumer confidence fell more than expected. In the US, August’s manufacturing and services PMIs fell more than expected, although July’s second-hand home sales rose beat expectations. The FDA fully approved Pfizer’s vaccine (not only on an urgent basis).
What we expect for today
European stock markets would open with gains following the solid session in Asia and the good news on vaccinations in the US. Currently, S&P futures are up +0.19% (the S&P 500 ended flat vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 17.15). Asian markets are rising (China’s CSI +1.35% and Japan’s Nikkei +1.02%).
Today we will have the G7 meeting, in Germany we will learn the final 2Q’21 GDP and in the US new home sales and August’s Richmond manufacturing index. In debt auctions: Germany (€ 3 Bn in bonds due 2028) and France (€ 5.4 Bn in 3M, 6M and 12M t-bills).


COMPANY NEWS

SANTANDER, BUY
The bank has announced the definitive agreement to acquire Santander Consumer USA (SCUSA), which includes an improved price to US$ 41.50/sh. (around +5% over the previous offer and +14% premium over the closing price prior to the initial offer (30/06)). SCUSA’s Board of Directors has unanimously approved the deal and the company has stated that it expects the deal to be sealed by the end of October or in 4Q’21.
Note that in early July Santander Holdings USA, Inc. announced its aim to acquire 20% of minority interests SCUSA did not yet hold. If it were to take 100% this would mean a payment of some € 2.1 Bn (~3.7% of SAN’s market cap). According to SAN, the estimated impact from the deal on CET1 would be approx. -10bps, and the move is expected to contribute to per-share profit growth (+3% in 2022).
News of little impact, as the increased offer means only 1.18% of SAN’s market cap.