IBERIAN DAILY 16 DECEMBER (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: MINOR HOTELS, TALGO.This week it’s the turn of the Fed, BoE and BoJ
It was a transition week for European stock markets (with the exception of the Ibex that dropped >-2.00%, now far from the 12,000-point level) after the ECB meeting that followed its rate cut script and despite the cut to growth and inflation prospects for 2025 it was less aggressive in terms of rates than what the market was expecting. This week it will be the turn of the Fed (18 Dec, -25bps rate cut expected), the Bank of England (19 December, no changes expected) and the Bank of Japan (19 December, no changes expected). Thus, in the STOXX 600, Automobiles and Food were the best-performing sectors vs. the bigger drops of Retail and Real Estate. On the macro side, in the euro zone, October’s industrial output fell less than expected in YoY terms (-1.2% vs. -1.9% expected) and in Spain November’s final inflation remained at the preliminary level (2.4% YoY general and core). In France, Moody’s cut the sovereign rating by 1 notch unexpectedly to Aa3 with stable outlook. In China, the rise in November’s retail sales moderated unexpectedly and November’s industrial output speed up, as expected and the slowdown in residential investments and home prices moderated. In Japan, October’s machinery orders and November’s preliminary manufacturing PMI and services recovered more than expected.
What we expect for today
Stock markets would open with slight drops, with the luxury sector dragged by China’s disappointing retail sales. Currently, S&P futures are unchanged (the S&P 500 was up +0.10% vs. the European closing bell). Asian markets are sliding (China’s CSI 300 -0.51%, Japan’s Nikkei -0.07%).
Today in the euro zone and the US we will learn December’s manufacturing and services PMI.
COMPANY NEWS
MINOR HOTELS, ACCEPT THE BID
Minor Hotels’s Board of Directos has given the green light to MHG Continental Holding’s delisting TOB (95.86% Minor Hotels) for the 4.14% stake not held at € 6.37/sh. The deal would mean around € 115 M. In order to approve the deal, the company has announced an EGM to be held on the 20th of Jan’25.
MARKET IMPACT
We believe that the delisting TOB makes sense bearing in mind the low liquidity of the stock and it does not come as a surprise as the control shareholder had already tried to delist the company in 2023 (€ 4.50/sh.). With this in mind, the price of the current bid is +38.5% above our T.P. (+37.6% vs. trading levels), and thus we change our recommendation to ACCEPT THE BID.
NH Hotel is engaged in the operation and management of hotels throughout Spain, the Benelux countries, Germany, and South America.
Talgo is engaged in designing, manufacturing, repairing and maintaining the railway rolling stock, as well as the manufacturing, assembling, repairing and maintaining the engines, machinery and parts of the railway systems. Co. has an industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and U.S.A. Co. has an active fleet in Europe, Asia and North America that comprises of 94 high-speed trains and more than 1,400 Talgo tilting passenger cars. Also, Co. purchases, redesigns, constructs, leases and sells all types of real estate.
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