EUR 100.00 For Business Accounts Only

IBERIAN DAILY 24 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: BANKIA, BANKINTER, CAIXABANK, CHANGES IBEX, FERROVIAL, IAG, PRISA.


MARKETS YESTERDAY AND TODAY

Fears of a new wave of Covid-19 rising
Despite some calm in the US bond, growing doubts on coronavirus trends and subsequent restrictions in Europe set the pace of the session, especially affecting cyclical sectors. Thus, in the Euro STOXX, Utilities and Real Estate led the gains, with Autos and Travel & Leisure bringing up the rear. On the macro ide, in the US the Richmond manufacturing sector rose more than expected in March, whereas second-hand home sales fell more than expected in February, as did the Chicago Fed activity index. No news in J. Powell’s appearance before the Senate Commission where he reiterated that the Fed will shape any tapering in good time. Separately, AstraZeneca pledged to deliver an update on the efficacy of its vaccine following the critiques of its data coming out of the US. In Spain, the BoS cut and postponed the GDP recovery (6.0% in 2020 vs. 6.8% previously and 5.3% in 2021 vs. 4.2% in Dec’20), assuming a new wave before the summer and it warns that in the central-case scenario the pre-pandemic levels will not be reached until 2023 while inflation would not exceed 1.5% over the 2021-23 period. Lastly, in the UK the government would be analysing the possibility of restricting foreign trips during the summer.
What we expect for today
European indices would open with drops of as much as -0.5% with some cyclical sectors such as Energy and Travel&Leisure in the spotlight in view of the additional drop in Brent crude and the possible loss of the summer in Europe. Currently, S&P futures are down -0.1% (the S&P 500 ended -0.85 lower vs. its price at the closing bell in Europe). Volatility in the US rose (VIX 20.30). Asian markets are sliding (CSI 300 -1.5%, Japan -2%).
Today in the euro zone we will learn PMIs and March’s consumer confidence, in the US February’s durable goods orders and in Mexico February’s unemployment rate. In debt auctions: Germany(€ 4 Bn in bonds due 2031).


COMPANY NEWS

CHANGES IBEX. Bankia removed and Fluidra included.
Yesterday the Technical Advisory Committee of the IBEX 35 decided to remove Bankia after its merger with Caixabank was approved (and thus it will be delisted on 26 March). Replacing it is Fluidra, with a free-float factor of 60%, a change that will be effective on 29 March.

CAIXABANK, BUY
BANKIA, BUY
Last night, the CNMC (Spanish Stock market regulator) authorised the merger of both banks. In its report it outlines several conditions although not relevant and not modifying the targets of the merger announced on September’20. The CNMC’s resolution includes binding clauses on the ordinary operation of both banks (ATMs, fee revenues, current accounts, etc.), on the divestitures to be carried out (irrelevant) in several associated companies (payment systems, mainly) and on the conditions for the closure of branches (in some towns).
Thus, the calendar of the deal is as follows:
(i) Exchange date: 26 March, 2021. registration in Valencia’s Mercantile Registry.
(ii) Record date: 30 March, 2021. Date when the positions to be exchanged will be set.
Note that the exchange ratio set is 0.6845 CABK new shares x 1 BKIA share.
Positive news that allows the merger to be implemented, and where the compromises made for antitrust reasons do not change the merger’s targets. Here we point out that the integration would be effective on 26 March, and thus the pro forma 2021 results will include 12 months of activity for CABK and 9 months for BKIA.