IBERIAN DAILY 14 MARCH (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: CAF, ENCE, TALGO.Fears of financial contagion
Sharp drops on European stock markets due to fears of financial contagion after the closing of the US banks SVB and Signature. However, the US minimised the losses at the end of the session in view of the containment measures taken by the Fed and FDIC and the expectations that the former will not end up raising rates in 2023. With all this in mind, in the Euro STOXX all sectors ended in the red, with Banks and Insurance leading the losses. By contrast, Real Estate and Utilities were the best relative performers. On the macro side, in the euro zone the President of the Eurogroup, Paschal Donohoe, stressed European banks’ low exposure to SVB and reiterated the strength of the common regulatory framework. In the US, Biden sent a calming message to deposit holders, announcing a toughening of bank supervision, while regulators are looking for a buyer for SVB.
What we expect for today
The European stock markets would see a slightly bearish opening in a session that will continue to be marked by volatility and the US inflation data. Currently, S&P futures are up +0.13% (the S&P 500 ended -0.34% lower vs. the European closing bell). Volatility in the US rose (VIX 26.62). Asian markets are falling (China’s CSI 300 -0.52% and Japan’s Nikkei -2.36%), with the Japanese banks dragged down by their high exposure to sovereign debt.
Today we will learn in the US, February’s inflation data, in the UK January’s unemployment rate, in Spain February’s final inflation, and in the US February’s inflation. As for auctions, Spain will issue € 2.5 Bn in 3 & 9M T-bills and Italy € 9.75 Bn in bonds due 2026, 2029, 2035 and 2079.
Ence Energia Y Celulosa is engaged in the manufacture and commercialization of wood pulp and derivatives. Co. divides its activities into the following two business lines: Forest Division: Co. manages timberlands in South America and the Iberian Peninsula. Co. is involved in trading of wood, and supplies solid wood products including: plywood, sawn timber, parquet flooring and glued-edge paneling. Co. is involved in forest and environmental consulting. Pulp Division and Energy Production: Co. is engaged in the production of Eucalyptus globulus-based TCF and ECF paper pulp. Co. is also involved in the generation of electricity through biomass power producing plants.
Talgo is engaged in designing, manufacturing, repairing and maintaining the railway rolling stock, as well as the manufacturing, assembling, repairing and maintaining the engines, machinery and parts of the railway systems. Co. has an industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and U.S.A. Co. has an active fleet in Europe, Asia and North America that comprises of 94 high-speed trains and more than 1,400 Talgo tilting passenger cars. Also, Co. purchases, redesigns, constructs, leases and sells all types of real estate.
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