EUR 100.00 For Business Accounts Only

IBERIAN DAILY 06 SEPTEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: IBERDROLA, TELEFÓNICA.

Macro data drags down stocks markets
European stock markets saw an increasing performance, dragged down at the opening bell by the poor macroeconomic data released in Asia and Europe that eased throughout the session. Thus, in the Euro STOXX, Energy and Automobiles led gains, whereas Chemicals and Household saw the biggest drops. On the macro side, in the euro zone August’s services PMI was cut by 4bps to 47.9. In Spain, the services PMI dropped more than expected, remaining below growth (>50) for the first time in 11 months. From the ECB, P. Lane was cautiously optimistic about the performance of inflation, whereas J. Nagel warned that rate cuts will take time to materialize after reaching the peak of rises. In the US, C. Waller from the Fed was in favour of a pause in the cycle of rate hikes in September. In Brazil, July’s industrial output dropped more than expected. On another note, Russia and Arabia Saudi extended their output cuts (around 1.3 Mb/d) until the end of the year.
What we expect for today
European stock markets would open with drops of -0.3%, in line with the lack of definition seen over the last few days. Currently, S&P futures are down -0.08% (the S&P 500 ended up +0.27% vs. the European closing bell).). Volatility in the US rose (VIX 14.01). Asian stock markets are mixed (China’s CSI 300 -0.55%, Japan’s Nikkei +0.44%).
Today in the euro zone we will learn retail sales, in the US the non-manufacturing ISM and in Brazil August’s inflation. In debt auctions, Germany will place € 5 Bn in bonds due 2033.


COMPANY NEWS

TELEFÓNICA. Saudi group STC acquires 9.9% of the capital, becoming largest shareholder. BUY
After yesterday’s closing bell the company announced that the Saudi group STC (telecom operator in Saudi Arabia and the Middle East) has acquired a 9.9% stake (4.9% directly and 5% through financial instruments) for € 2.1 Bn (~10% of current market cap). Thus, STC is now the largest shareholder in the company (followed by BBVA with 4.87% and BlackRock with 4.48%), although it has indicated that it does not wish to take control or a majority stake in TEF (the 9.9% is just below the 10% limit of the so-called anti-takeover shield), also providing support to TEF’s management team. We welcome this investment, as it stresses TEF’s attractive valuation (more than +30% upside BS(e)), and we expect a positive reaction by the share price today, which in 2023 has underperformed the IBEX by -2% (+10% vs. sector).