IBERIAN DAILY 10 MARCH (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: BANKING SECTOR, CELLNEX, IBERDROLA, OHLA.US banks tumble on fears about SVB
Stock markets rose as the session progressed before ending with slight losses in Europe (with the Ibex above the 9,400-point benchmark) ahead of the US employment data, whereas the S&P500 ended with sharp drops, dragged down by the panic generated by SVB. Thus, within the Euro STOXX, Food and Industrials were the best relative performers vs. the bigger drops in Real Estate and Basic Resources. On the macro side, in the US, weekly jobless claims increased to its highest level since Christmas, fuelling optimism on the stock markets. On another note, Sillicon Valey SVB ignited the alarm yesterday by announcing a significant capital increase to cover losses for bond and MBS holdings. In France, the Senate voted to raise the retirement age to 64. From the ECB, F. Villeroy stated the institution’s commitment to reach the 2% inflation target by late 2024 or early 2025. In Japan, the BoJ kept its monetary policy unchanged. On another note, the PM F. Kishida has ordered the adoption of measures to the government coalition to tackle inflation.
What we expect for today
The European stock markets would open with drops of as much as -2.0%, with banks dragged down by news from the US and with a better performance of defensive stocks. Currently, S&P futures are down -0.78% (the S&P 500 ended -1.86% lower vs. the European closing bell). Volatility in the US rose (VIX 22.61). Asian markets are falling (China’s CSI 300 -1.06% and Japan’s Nikkei -1.67%).
Today we will learn in the US the unemployment rate, non-farm employment and wage returns for February, in Germany, February’s final inflation, in Spain January’s retail sales, and in Brazil February’s inflation.
COMPANY NEWS
BANKING SECTOR
Silicon Valley Bank (SVB), a bank focused on lending to technology companies, recognised yesterday significant losses on US Treasury bonds, which triggered banking panic with the withdrawal of deposits. There was a perceived fear that SVB’s case would drag down smaller banks but not large ones. That said, the investment banking sector ended up closing with a -7% drop vs. -60% (SVB) and -9.5% for the regional banks sector in which SVB is included.
We understand that as a result of the contagion effect this should affect local US banks and, for the time being, we rule out a significant impact on European banks beyond the one-off correction we will see today.
Cellnex Telecom SA is a Spain-based company engaged in the wireless telecommunications (telecom) business. Its activities are divided into three segments: Broadcasting infrastructure, Telecom site rental, as well as Network services and other. The Broadcasting infrastructure division comprises distribution and transmission of television (TV) and frequency modulation (FM) radio signals, operation and maintenance (O&M) of radio broadcasting network, as well as over-the-top (OTT) radio services, among others. The Telecom site rental division provides access to wireless infrastructure, primarily through infrastructure hosting and telecom equipment co-location, mainly for mobile network operators and other wireless and broadband telecom network operators. The Network services and other division offers connectivity services for a variety of telecom operators and radio communication, among others. The Company also develops 5th generation mobile networks (5G) through Alticom BV.
Iberdrola is a holding company. Through its subsidiaries, Co. operates in four segments: network business, which includes all the energy transmission and distribution activities, and other regulated activity originated in Spain, the U.K., the U.S. and Brazil; deregulated business, which includes electricity generation and sales businesses as well as gas trading and storage businesses carried on by Co. in Spain, Portugal, the U.K. and North America; renewable business, with activities related to renewable energies in Spain, the U.K., the U.S. and the rest of the world; and other businesses, including the engineering and construction businesses and the non-power businesses.
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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