EUR 100.00 For Business Accounts Only

IBERIAN DAILY 28 DECEMBER (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ALMIRAL, LIBERBANK, UNICAJA.


MARKETS YESTERDAY AND TODAY

Transitional session
It was a half-holiday session with little trading volume (with stock markets open only until midday and derivatives markets closed) in which the European stock markets retained their early-morning gains fuelled by the announcement of a post-Brexit trade deal between the UK and the EU. Thus, within the Euro STOXX, Banks and Household Goods ended in the black, whereas the Leisure and, to a lesser extent, Food sectors saw the biggest drops. On the macro side, no relevant data was released on Friday. Over the weekend, November’s industrial output and November’s retail sales were released in Japan, both below expectations.
In currencies, the euro/dollar traded at its highs during the entire session, closing at 1.219 (currently at 1.2223). In raw materials, Brent futures fell from US$ 51.37/barrel to US$ 50.70/barrel (currently at 50.92). Gold remained largely flat at US$ 1,872/oz. (currently at 1,886).
In fixed income, EU core country debt yields widened very slightly, celebrating the post-Brexit deal (Germany’s by +1bps to -0.55%), whereas the Treasury tightened by -1bps to 0.94%. In credit, the Xover tightened -5bps to 244bps and the CDX HY$ was more stable at 298bps.
What we expect for today
European stock markets would see a bullish opening after D. Trump will finally sign the fiscal plan package and he will just ask the Congress and the Senate to vote an extension of the household checks (that will be probably opposed by the republicans). Currently, S&P futures are up +0.6% (the S&P 500 closed up +0.26% vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 21.53). Asian markets are climbing (CSI 300 +0.3%, Japan +0.7%).
No relevant macroeconomic data will be released today.


COMPANY NEWS

LIBERBANK / UNICAJA, BOTH BUY
According to the press, UNI and LBK would have reached an agreement on corporate governance that had been mentioned in the last few days as a possible burden for the completion of the merger given their discrepancies. Apparently, Manuel Azuaga (73 years), UNI’s executive chairman, will remain in his position in the new group until the next 2 years. At that time, Manuel Menéndez (LBK’s current CEO; 64 years) will be subject to a “vote of confidence” by the Board of the new bank (not being forced to leave his position as UNI had initially requested), which will decide whether to maintain his position or to choose a third person. According to the press, this alternative would be already backed by the ECB. Positive news, as the rumours on the discrepancies in this regard had generated some doubts on the merger in the last few days. Furthermore, with this agreement, the Boards to approve it could be held before the end of the year, which is mandatory for the legal, accounting and regulatory process (otherwise, the due diligence should start again). This news is in line with our central-case scenario, which is that the deal will be closed this year.