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IBERIAN DAILY 09 JANUARY (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: BANKING SECTOR, NEINOR, REPSOL, SACYR.

MARKETS YESTERDAY AND TODAY

Stock market gains resume
European bourses started the session with drops >-0.5% that moderated to end in positive territory, with the exception of Switzerland. In the Euro STOXX, Financial Services, Construction and Pharma led gains while Basic Resources and Real Estate saw the biggest drops among the 7 sectors that ended in the red. On the macroeconomic level, in Germany, factory orders slowed down more than expected in November, underscoring that industrial production will continue to slow down at the beginning of 2020. In the euro zone, the economic confidence index climbed in December more than expected, underpinning growth slightly above 1.0% YoY. In the US, ADP private employment rose more than expected in December, suggesting positive non-farm employment data next Friday. In China, December’s inflation came in unexpectedly lower, remaining at November’s YoY of 4.5% while production prices recovered less than expected. Lastly, the World Bank cut its growth forecasts for 2019-21 by two tenths to 2.4%, 2.6% and 2.6%, respectively.
What we expect for today
Stock markets would open with gains >+0.5%. Currently, S&P futures are up +0.14% (the S&P 500 closed -0.14% lower vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 13.45%). Asian markets are rising (Japan +2.31% and Hong Kong +1.27%).
Today in Germany and Brazil we will learn November’s industrial production. We will also see several speeches from Fed and ECB members. As for auctions, Spain will issue today € 5 Bn in bonds due 2021, 2024, I/L 2033 and 2035 and France € 9 Bn in bonds due 2029, 2036 and 2050.

COMPANY NEWS


NEINOR HOMES. Meets its delivery and EBITDA targets in 2019.
The company has communicated it has met its 2019 delivery and EBITDA targets after signing the deeds of 1,269 units (vs. 1,200-1,700 guidance and vs. 1,200 units BS(e)) with an EBITDA > € 70 M (according to the CEO’s press comments it could exceed € 90 M vs. > € 70 M guidance and vs. € 78 M BS(e)). We believe this is positive news although note that, in our view, after the profit warning from last March, the company has changed from an overly optimistic to an overly conservative stance on its estimates. The stock is trading at a -31% discount to NAV’19, which we believe is excessive (-40% for its peers). We reiterate our BUY recommendation.