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IBERIAN DAILY 27 JANUARY + 4Q’20 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ELECTRICITY SECTOR, NATURGY, OHL.

At the end of today’s report, and during the entire results season, we will include a presentation with positive and negative results highlights and previews for the 4Q’20 results to be released over the coming days in Spain.

MARKETS YESTERDAY AND TODAY

Rally following the corrections
European stock markets were in positive territory, with almost all indices closing above +1%, where Germany (+1.8%) and France (+1.2%) saw the biggest rally. Thus, in the Euro STOXX all sectors with the exception of Household and Construction ended in positive territory, with Banks and Chemicals being the best relative performers. On the macroeconomic level, in the US, January’s consumer confidence climbed more than expected. Separately, the IMF raised its global growth forecast for 2021 by 3 tenths to 5.5%. For the Euro zone, it expects 4.2% growth in 2021 vs. -7.2% in 2020, and for Spain, it lowered its estimate to 5.9% (vs. -11.1% in 2020) vs. 9.8% forecast by the Govt. For the US, it expects 5.1% growth in 2021 vs. -3.4% in 2020, and China would exceed once again 8% growth vs. 2.3% recorded in 2020. In China, industrial earnings speeded up in December to 20.1% vs. 15.5% previously. In US Results Johnson & Johnson, Verizon and American Express came in better than expected, General Electric and Xerox Holdings worse.
What we expect for today
The opening in Europe will once again be flat with a slight bearish slant, with the tech sector underpinned by the solid results in the US and awaiting news from the Fed meeting. Currently, S&P futures are down -0.15% (the S&P 500 closed unchanged vs. its price at the closing bell in Europe). Volatility in the US rose (VIX 23.02%). Asian markets are rising (CSI 300 +0.15%, Japan +0.3%).
Today in the US we will learn the Fed meeting and December’s durable goods orders. In debt auctions: Italy (€ 6.5 Bn in 6M T-bills), Greece (€ 625 M in 6M T-bills) and Germany (€ 4 Bn in 0% bonds due 2031). In US Results, Boeing, Abbott Laboratories, AT&T and Nasdaq, among others, will release their earnings today.


COMPANY NEWS

NATURGY. Global InfraCo will launch a takeover bid for 22.7% of capital at € 23.00/sh. SELL.
Global InfraCo announced before yesterday’s opening bell it will launch a takeover bid before 26/02, addressed at 59% of the capital, as both Rioja (20.7% NTGY) and GIP (20.6%) will not accept the offer. We should point out that nothing is certain, as according to the press the Govt. could decide not to approve the TOB (when it is formalised), as it is a strategic company and for the anti-TOB RD from the state of alarm. In order to facilitate this, Global InfraCo would be seeking the help of Criteria, pushing it not to accept the offer. Considering that the stock rose +16% yesterday to € 22.16/sh. and that it is practically pricing in the TOB moving forward without Criteria accepting (best possible scenario for minority interests, with the forecast prorating), our recommendation is SELL.