EUR 100.00 For Business Accounts Only

IBERIAN DAILY 15 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: CAIXABANK, ELECTRICITY SECTOR, GRIFOLS, TELEFÓNICA.

The markets take a breather
Following the rallies over the last few sessions, and in a session that ended worse than it began, most European stock markets posted losses after the unexpected rise in US production prices, which also confirm that deflation in good would now be over. In the STOXX 600, most sectors ended with losses, led by Basic Materials and Banks, with the biggest gains coming in Consumer Goods and Media. From the ECB, Y. Stournaras bet on four rate cuts before the end of the year. In Spain, February’s final inflation confirmed the preliminary data of 2.8% YoY, with the core figure rising +0.1% to 3.5% YoY. In the US, February’s production prices rose more than expected and retail sales (also for February) rose less than expected, although the core figure (excluding autos and gasoline) was in line. In China, the slowdown of home prices aggravated in February. On another note, the PBoC kept the 1Y interest rate unchanged at 2.5% (MLF) although draining liquidity for the first time since Nov’22.
What we expect for today
European stock markets would open flat with some bearish bias and with growth faring worse. Currently, S&P futures are flat (the S&P 500 ended up +0.14% vs. the European closing bell). Asian stock markets are falling (China’s CSI 300 -0.13%, Japan’s Nikkei -0.26%).
Today in the US we will learn February’s industrial output and production prices, and March’s manufacturing Empire index and the University of Michigan consumer confidence.

COMPANY NEWS

CAIXABANK, BUY
After yesterday’s closing bell the company announced that it has received authorisation from the ECB to carry out a € 500 M share buyback (1.5% of market cap). The programme will begin today and will last six months. It will have an impact of -22bps on the CET1 ratio (from 12.38% in Dec’23). Note that CABK had already confirmed a share buyback programme in 1H’24 and only the amount was left to be disclosed. The company has pledged to generate € 12 Bn between 2022-24 to return to shareholders (€~7.4 Bn already paid, including the DPS’23 payable in 2Q’24 and this buyback), through dividends and share buybacks. To this end, the bank aims to carry out recurring share buybacks in order to return excess capital above 12% to shareholders. Expected, positive news. Bearing in mind the daily trading volume, we estimate it will take ~35 sessions to complete the buyback. According to our numbers, CABK has leeway to continue buying back €~1 Bn per year, and thus we do not rule out the announcement of another buyback in 2H’24 (of a similar amount to this one).