EUR 100.00 For Business Accounts Only

IBERIAN DAILY 23 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: BANKIA, CAF, LOGISTA, REIT SECTOR, REPSOL, SIEMENS-GAMESA, TOURISM SECTOR.


MARKETS YESTERDAY AND TODAY

Markets continue to rally despite stimulus plan setback in the US
The European stock markets rallied following the sharp drops of the previous session, with the Ibex 35 standing out with a +>1.80% rise. In Spain, the Government approved the Decree-Law on urgent measures for the management of the EU funds (€ 72 Bn of direct aid measures over the next 5 years) and a € 4.4 Bn aid scheme aimed at the catering sector. France partially reopened its border with the UK to avoid chaos and supply problems, whereas after both sides reached an agreement on fishing rights, the negotiation of a post Brexit deal continue. Thus, all the sectors within the Euro STOXX ended in the black, with Banks and Technology leading gains vs. defensive sectors such as Household Goods and Telecoms, which were the worst relative performer. On the macro side, in the United Kingdom, the final 3Q GDP data was raised by around a tenth of a percent. In the US, the 3Q GDP data was also raised, and the Richmond Fed index climbed above expectations. In Japan, the leading indicator came in slightly above the previous figure.
What we expect for today
Stock markets would open with slight gains of more than +1% despite D. Trump refusing to sign last night the new € 900 Bn fiscal stimulus package approved by both chambers, demanding changes in the distribution of funds. Currently, S&P futures are flat (the S&P 500 closed down -0.3% vs. its price at the closing bell in Europe). Volatility in the US rose slightly (VIX 24.23). Asian markets are rising slightly (CSI 300 +0.5%, Japan +0.3%).
Today we will learn in Spain the final 3Q’20 GDP data, and in the US the weeky jobless claims, durable goods orders and new home sales data.


COMPANY NEWS

REIT SECTOR
Both the anti evictions decree and the rescue plan for hotels approved yesterday by the Government include measures by which big real estate property owners (houses & commercial premises) assume some obligations due to the impossibility of their tenants. More precisely, big commercial premises owners will assume a 50% remove or a rent payment postponement for 4 months once the state of alarm is concluded (may’21), should tenant and owner not reach an agreement.
Regarding commercial spaces, the bias of the news is obviously negative but in any case we do not think that it will introduce any relevant information since we understand that the negotiations (rent reductions and postponements) between landlords and tenants began months ago when the Covid-19 forced to temporarily close businesses. And in general, all the companies have been giving guidance on the impact that this could have on income (impacts of between -10% / - 20%), so this aspect could already be partially discounted when stocks’ prices are on average trading at -40% below NAV.
News without impact regarding residential rental (anti-eviction law) taking into consideration that residential business does not have relevant weight within listed Spanish REITs.