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IBERIAN DAILY 12 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ANTI-TOB PROTECTION, BANKING SECTOR, CHANGES IBEX.

Waiting for the Central Banks
It was a transitional week for the main risk assets, which ended with gains awaiting the decisions to be made this week by the main Central Banks (Fed, ECB and BoE). On the geopolitical front, V. Putin stated that Russia might reduce oil production will refuse to sell it to any country that imposes the Western price cap on Russian oil. However, Saudi Arabia mentioned that the impact of sanctions is still unclear, as Europe is not as dependent on Russian oil as on natural gas. Thus, within the Euro STOXX, the best-performing sectors were Basic Resources and Insurances, whereas Energy (dragged down by the drops in crude oil) and Financial Services were the week’s worst relative performers. On the macro side, in Spain, October’s industrial output fell more than expected (2.5% vs. 2.8%). From the ECB, Stournaras backed a +50bps rate hike in December. In the US, production prices slowed less than expected in November due to the increase in services and core prices, which hints at a worse inflation data in November. Separately, final wholesale inventories increased less than expected and October’s University of Michigan confidence climbed above expectations. In Brazil, inflation slowed more than expected in November. In China, the authorities further eased Covid-19 restrictions, this time on the transportation of workers.
What we expect for today
European stock markets would open with losses of -0.5% on fears of poor US inflation data and greater monetary tightening. Currently, S&P futures are down -0.05% (the S&P 500 ended down -1.03% vs. the European closing bell). Volatility in the US rose (VIX 22.83). Asian markets are falling (China’s CSI 300 -0.90% and Japan’s Nikkei -0.25%).
Today we will learn in the UK, October’s construction sector output, the quarterly GDP figure and October’s industrial and manufacturing output, and in Mexico October’s industrial output.

COMPANY NEWS

ANTI-TOB PROTECTION SPAIN. The Govt. extends protection for strategic companies through December’24.
The Govt. will extend the timeframe for TOB protection measures taken in March’20 (and extended several times since then) through December’24 (which would be 24 more months, as the last extension expired in Dec’22). The measures were put in place to stop investors from being able to take control of Spanish companies in strategic sectors (energy infrastructure, transport, water, healthcare, communications, data treatment or storage, aerospace, defence, electoral or financial) and banned new stakes from these investors equal to or above 10% of share capital in listed companies (limit of € 500 M for unlisted companies) without the Government’s express authorisation. Furthermore, its expected that the Govt. will add the control on asset purchases also. The press has indicated that the news especially affects Naturgy, where there has been mention of the possibility of several shareholding moves, although in November of this year the main shareholders (Criteria with 26.7% of the capital, CVC with 20%, IFM 13.38% and GIP 20%) signed a stability agreement in view of the Government’s opposition to possible changes.

CHANGES IBEX 35: Technical Advisory Committee will meet today. Possible changes.
At today’s closing bell, the IBEX Technical Advisory Committee will meet for its last annual follow-up meeting (the other meeting is in June of every year). On 14 December (adjustments at the closing bell on 13/12) Siemens Gamesa will be excluded from the IBEX, today’s meeting could end without any changes apart from some weight adjustments. In the event of changes, Pharmamar would be the candidate to be excluded from the index, with Logista being the possible inclusion. If Siemens does not return to the Ibex in the end after the announcement of the result of the TOB on the company (we do not expect its return), a new inclusion would be necessary starting on the 27th of December, and in this case the main candidates, in order, would be CIE and Almirall.