IBERIAN DAILY 04 FEBRUARY (ANÃLISIS BANCO SABADELL)
NEWS SUMMARY: BBVA, MEDIASET, OHL.MARKETS YESTERDAY AND TODAY
Timid rally attempt
The PBoC’s adjustment measures and the positive surprises from January’s leading indicators contributed to stabilise stock markets. Thus, the Euro STOXX saw moderate gains (below 1%), led by Technology and Travel&Leisure while only Energy, following a new drop in crude oil (-3.8%) ended with losses, followed by Basic Resources, which closed almost flat. On the macroeconomic level, in the euro zone, December’s manufacturing PMI improved one tenth vs. the preliminary data thanks to the positive contribution from Spain. In the US, the manufacturing ISM rose unexpectedly above 50 (consistent with higher activity) thanks to the better dynamics of orders and the strength of employment. This would suggest a recovery of industrial output in 2020. In US Results Sysco were very much in line and Alphabet (Google) better than expected (although with disappointing advertising growth).
What we expect for today
Stock markets would open with gains of +0.5%. Currently, S&P futures are up +0.60% (the S&P 500 closed largely unchanged vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 17.97%). Asian markets are rising (Japan +0.49% and Hong Kong +1.22%).
Today in the US we will learn December’s factory orders. In US business results, Philips, Gartner and Emerson Electric, among others, will release their earnings. In debt auctions: Germany (€ 500 M in inflation-linked bonds due 2030 and 2046).
COMPANY NEWS
OHL. Negotiates a merger with Mexico’s Caabsa. SELL.
According to the press, Villar Mir (30.6% OHL) would be negotiating with the Amodio brothers a merger between OHL and Mexico’s unlisted builder Caabsa (100% Amodio). According to the press, the Amodio brothers would become the main shareholders of the merged company and OHL would continue to trade on the stock exchange. Awaiting further details on the transaction (price), we welcome the integration of OHL into a larger structure, as this would improve its competitive position and foster international growth, since the expansion of guarantee lines would be unblocked. Separately, we highlight that the potential change of control would enable the early cancelation of its financial debt (€ 730 M), with a cost higher than 5% BS(e).
Banco Bilbao Vizcaya Argentaria is an international financial group, engaged primarily on providing banking services and consumer finance to private individuals and businesses in Spain and Portugal; providing real estate activity in Spain; providing services to international companies and investment banking, capital markets and treasury management services to clients; and providing the banking, insurance and pension businesses in Mexico and the U.S., as well as in South America.
Mediaset S.p.A. is a joint stock company. Co.'s majority shareholder is Fininvest S.p.A. Mediaset is a multinational media group. Its core business is commercial television broadcasting in Italy and Spain. In Italy, Co. has two main areas of business: Integrated television operations and Network infrastructure services and management. In Spain, Co. is the main shareholder of Mediaset Espana, a Spanish commercial television broadcaster with two main general interest channels (Telecinco and Cuatro) and a range of six free-to-air thematic channels.
Obrascon Huarte Lain is an international concession and construction groups based in Spain. Co. maintains significant operations in 30 countries across all five continents. Co. is engaged in hospital and railway construction, transport infrastructure concessions, oil and gas, energy, solids handling and fire protection systems and international contracts. Co.'s operations are organized along four divisions: OHL Concesiones, OHL Construccion, OHL Industrial y OHL Desarrollos. Co. is also engaged in real state project developments of mixed use managed by the international hotel chains.
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