EUR 100.00 For Business Accounts Only

IBERIAN DAILY 29 SEPTEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: GRUPO CATALANA OCCIDENTE, SOLARIA.

Stock markets escape punishment
The German inflation data did nothing to stop another session of widening debt curves, which saw double-digit rises in the euro zone. However, European stock markets weathered the storm better than over the past few days, underpinned by the solid performance by cyclicals and financials. Thus, the Euro STOXX ended with mixed performance (12 of 20 sectors in green numbers at the closing bell), with the best performers being Basic Resources and Banks, whereas Utilities and Food suffered the biggest losses. On the macro side, in Spain, inflation rose to 3.5% in September (as expected) due to the positive base effect from energy (in line), whereas the core figure fell more than expected to 5.8%. In Germany, September’s inflation fell to 4.5%, although still with heavy pressure on food, whereas the core figure fell to 4.6%. In the euro zone, the economic sentiment index rose unexpectedly, but the quarterly average remains consistent with a slight contraction of the economy. In the US, weekly jobless claims rose slightly less than expected, remaining near 200,000, whereas pending home sales contracted much more than expected in August. From the Fed, dovish comments from A. Goolsbee, stating that the inflation target could be reached without the need for more monetary tightening. In Mexico, the Bank of Mexico kept the reference rate unchanged at 11.25% as expected. In Japan, the core Tokyo inflation figure fell more than expected in September, August’s unemployment rate surprisingly remained at 2.7%, industrial output steepened its decline YoY, August’s retail sales grew more than expected and housing starts fell more than expected.
What we expect for today
European stock markets would open flat with some bullish slant with the imminence of the possible shutdown in the US. Currently, S&P futures are down -0.03% (the S&P 500 ended unchanged vs. the European closing bell). Volatility in the US fell (VIX 17.34). Asian stock markets are falling (China’s CSI 300 closed, Japan’s Nikkei -0.38%).
Today in the UK we will learn the final 2Q’23 GDP, in Germany September’s unemployment, in the euro zone September’s inflation, in Brazil August’s unemployment rate and in the US August’s personal income and outlays.


COMPANY NEWS

SOLARIA. Positive messages from the CMD but without significant changes. BUY.
Beyond the 1H’23 Results, the messages from the CMD were positive but not representing relevant changes. From a financial point of view, on the positive side we stress the drop in capex/MW (-17% vs. BS(e)), which will allow the company to improve the project profitability. Furthermore, SLR unveiled an EBITDA guidance +32/44% above BS(e), with the main difference stemming from the installed capacity hypothesis. For the time being we maintain our estimates, T.P. and BUY recommendation, although if we were to assume the new capex/MW guidance starting in 2024, our T.P. would rise >+10%. Despite yesterday’s rally (+7% vs. Ibex), the share price has underperformed the Ibex by -36% YtD.