EUR 100.00 For Business Accounts Only

IBERIAN DAILY 27 JUNE (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: GRIFOLS, OHL.


Corrections continue in Europe, with the Ibex falling below 11,100 points
Yesterday’s session saw a decreasing performance in Europe, unable to keep the initial gains, partially hit by a new rise in sovereign yield at both sides of the Atlantic. Thus, in the STOXX 600 all sectors with the exception of Technology saw losses, led by Travel&Leisure and Real Estate. On the macro side, in Germany, July’s consumer confidence index fell unexpectedly after rising for four consecutive months. In the US, May’s new home sales failed to meet expectations following April’s strong upgrade. Separately, the banks passed the Fed’s new stress test, leaving the door open to more dividends and share buybacks.
What we expect for today
Stock markets would open flat with some bearish bias where Brent crude prices should rise in view of the mounting geopolitical risk in the Middle East. Currently, S&P futures are down -0.3% (the S&P 500 ended flat vs. the European closing bell). Asian stock markets are falling (China’s CSI 300 -0.64%, Japan’s Nikkei -0.98%).
Today in the euro zone we will learn June’s economic confidence index, in Spain May’s retail sales, in Mexico May’s unemployment rate and Central Bank meeting, in the US May’s durable goods orders, weekly jobless claims and the debate between J. Biden and D. Trump.

COMPANY NEWS

OHLA. Announces € 100 M capital increase. OVERWEIGHT.
After yesterday’s closing bell, the company announced a € 100 M capital increase (42% market cap) with subscription rights to “improve the capital structure and ensure continuity in the long-term”. OHLA confirmed that the Amodio family (25.97%) will subscribe to the capital increase, calling an EGM to announce the terms. Note that based on rumours suggested over the last few months the capital increase will allow the company to free up deposits linked to its collateral lines for additional € 100 M and to face its corporate bond maturity (€ 207 M in 2025). The share price already saw a downward adjustment on this rumour (-11% since 23/05) although we expect a negative reaction. If we were to assume a -25% discount vs. yesterday’s close of € 0.38, this would mean the issuance of 351 M shares (+60%) and a € 0.34/sh. TERP (-11%). Against this backdrop, our T.P. would stand at around € 0.58/sh. (-23% vs. our current T.P.), still yielding upside of around +70% vs. TERP. In any event, the announcement of the terms and the success of the capital increase will be key for the recovery of the share price.