Report
Research Department
EUR 100.00 For Business Accounts Only

IBERIAN DAILY 23 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ENAGÁS, CAF, LAR ESPAÑA.

A week of corrections in view of the delay in rate cut expectations in the US
US stock exchanges rallied last Friday with the good inflation data (core deflator) but slid near -1.5% last week vs. -2.0% European stock markets due to the fewer rate cuts expected by the Fed in 2025. Thus, in the STOXX 600 all sectors ended with drops last week, led by Pharma and Basic Resources vs. the better relative performance of Consumer Goods and Technology. On the macro side, in the UK, November’s retail sales rose slightly less than expected (Black Friday will be included in December’s reading). In the US, November’s core consumption deflator rose less than expected to 2.4%. Personal income slowed down more than expected and personal outlays climbed less than expected. The University of Michigan final consumer confidence was raised, rising for the fifth consecutive month to the highest reading since April. On another note, J. Biden extended the administration financing through mid-March, avoiding an imminent shutdown.
What we expect for today
Stock markets would open with slight corrections. Currently, S&P futures are up +0.58% (the S&P 500 ended -0.59% lower vs. the European closing bell). Asian markets are climbing (China’s CSI 300 +0.18%, Japan’s Nikkei +1.19%).
Today in the UK and Spain we will learn the final 3Q’24 GDP, in the US November’s consumer confidence and in Mexico October’s IGAE activity.


COMPANY NEWS

ENAGAS, OVERWEIGHT
ENAG would have won the international arbitration process in CIADI against the Peruvian Govt. (for the dispute over the investment made in GSP, a Peruvian gas pipeline, and the collateral provided). ENAG will receive US$ 176 M in addition to a 1.44% interest calculated from Jan’18, meaning US$ 194 M in total in addition to 75% of the legal costs. This ruling would mean a capital loss given the difference between the amount admitted in the arbitration process (US$ 194 M, € 186 M, around 6% market cap) and the amount to be collected (US$ 505 M) regarding the investment registered in its balance sheet. The arbitration process also includes the CIADI’s opinion that ENAG should have no restrictions to repatriate dividends from the subsidiary, estimated at around US$ 400 M.
MARKET IMPACT
News with a positive lant and even though the amount is lower than expected in the end (ENAG was planning to recover 50% of the investment, i.e. € 230 M vs. € 186 M in the end), this puts an end to this arbitration process with a positive result for ENAG (that we had not included in our estimates). ENAG has outlined it now expects to close an agreement with the Peruvian government to meet the decision as favourably as possible for both parties, reiterating its dividend policy.
Underlyings
Construcciones Y Auxiliar De Ferrocarriles, S.A.

Enagas SA

Enagas is a gas transportation company based in Spain. Co. is engaged in the technical distribution and storage of gas through pipelines as well as the provision of regasification services. Co. and subsidiaries are engaged in the ownership, administration, storage, pipeline transportation, distribution flow, and sale of natural gas. As a transport company, Co. also provides gas and manages the gas infrastructures.

Lar Espana Real Estate SOCIMI SA

Lar Espana Real Estate SOCIMI SA is a Spain-based company primarily engaged in the operation of retail Real Estate Investment Trusts (REITs). The Company specializes in acquiring, managing and renting real estate assets within the Spanish market. Its business activities are divided into three segments: Shopping Centers, Offices, as well as Logistics. The Shopping Centers area is responsible for operation of a number of shopping malls, namely Txingudi, Las Huertas, Albacenter, Anec Blau, Hiper Albacenter, and Nuevo Alisal, among others. The Offices segment invests in office properties, such as Arturo Soria, Cardenal Marcelo Spinola, Egeo and Eloy Gonzalo. The Logistics division focuses on managing logistics warehouses, including Alovera I and Alovera II. The Company also owns a plot for residential properties development. It is a parent of a number of entities, such as Lar Espana Inversion Logistica SA, Gran Via Centrum Holdings SAU, Global Noctua and Puerta Maritima Ondara.

Provider
Sabadell
Sabadell

Analysts
Research Department

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