IBERIAN DAILY 15 JANUARY (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: CELLNEX, MERLIN PROPERTIES.Market awaiting inflation data and the start of the results season
Debt yields fell slightly after US production prices for December came in below expectations, leaving a bit of leeway for European stock market valuations, at least until December’s CPI is released today. In the STOXX 600, Banks once again led the gains along with cyclical sectors like Autos, whereas Pharma and Energy suffered the biggest drops. On the macro side, in the US the NFIB (SME) confidence index improved much more than expected in December. In China, December’s total financing beat expectations.
What we expect for today
Stock markets would open with gains of up to +0.3%, awaiting the inflation data and the results of US banks. Currently, S&P futures are up +0.05% (the S&P 500 ended up +0.59% vs. the European closing bell). Asian markets are sliding (China’s CSI 300 -0.64% and Japan’s Nikkei -0.17%).
Today in the UK we will learn December’s general and core inflation, in Spain December’s final general and core inflation, in the euro zone November’s industrial output and in the US December’s general and core inflation. In business results Citigroup, Goldman Sachs, JPMorgan, Wells Fargo, BlackRock and BNY Mellon will release their earnings.
COMPANY NEWS
CELLNEX, OVERWEIGHT
Yesterday CLNX’s Board of Directors approved a share buyback for up to € 800 M (3.93% of market cap at current prices), which will start after the approval of the tower sale in Ireland, forecast in 1Q’25 and valid until Dec’25 (or whenever € 800 M of shares have been repurchased). The programme’s aim is to take advantage of the low share price and reduce share capital (by cancelling the shares). Additionally, the Board also approved an increase to the amount of the equity swap contract (signed in Nov’23) from € 150 M to € 550 M (2.7% market cap) and to extend it to June’26 (from May’25).
Positive news due to the amount of the buyback (above our estimates) and because the shareholder remuneration has been moved forward (and increased). Furthermore, this will act as a support for the share price (assuming 25% of the average daily volume, the company would take ~4 months to carry out the buyback), which after the latest drops is at a very low level, and hence the timing of the announcement.
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.
Merlin Properties SOCIMI SA is a Spain-based company engaged in the operation of a real estate investment trust (REIT). The Company focuses on the acquisition, management and rental of commercial properties located in the Iberian Peninsula, primarily in Spain. The Company's activities are divided into the following segments: Office buildings, operating a portfolio of office space; High-street retail, engaged in leasing retail stores; Shopping centers, engaged in managing department stores; Logistics, operating logistics warehouses and distribution centers, and Others. The Company's other activities include property management services rendered to third parties.
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