EUR 100.00 For Business Accounts Only

IBERIAN DAILY 30 AUGUST (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ROVI.

MARKETS YESTERDAY AND TODAY

Start of tapering announced at Jackson Hole
In the Jackson Hole meeting the Chairman of the Fed, J. Powell, announced on Friday that if the economy continues to progress as expected, stimulus measures will begin to be withdrawn before the end of the year, but there will be no hurry to raise interest rates. As regards high inflation rates, Powell added that the organisation still thinks this situation is temporary. In the Euro STOXX, Basic Materials and Real Estate were the best-performing sectors, vs. the drops in Travel & Leisure and Household Goods. On the macro side, in France August’s consumer confidence slowed more than expected. In the US, July’s personal income rose more than expected, whereas outlays were in line. In Malaysia (very important country in the supply chain of semiconductor chips), a new Covid-19 outbreak threatens to prolong the microchip crisis even further.
What we expect for today
Currently, S&P futures are up +0.08% (the S&P 500 ended up +0.12% vs. its price at the closing bell in Europe). Volatility in the US fell (VIX 16.39%). Asian markets are trading with mixed results (China’s CSI -0.21% and Japan’s Nikkei +0.5%).
Today in the euro zone we will learn August’s economic climate indicator and in Spain and Germany August’s inflation. In debt auctions: France (€ 6 Bn in 3M, 6M and 12M t-bills).


COMPANY NEWS

ROVI, SELL
Yesterday ROVI announced that the formal investigation into the detection of particulate matter in some vials of Moderna’s vaccine against Covid-19 distributed in Japan and that to date have not been found to have contributed to the deaths of 2 people that had received the vaccine from one of the contaminated batches. Separately, according to the press Japan may have found new batches of contaminated Moderna vaccines (no further details given), which are different to those detected last week.
Regarding the 2 deaths in Japan, the Japanese Health Ministry had already ruled out any relationship with the contaminated vials, and in any event ROVI has received EMA authorisation to continue filling and finishing the Moderna vaccine. As for the detection of new contaminated batches and the possible impact on the vaccine’s safety and efficacy, the key will lie in the result of the formal investigation, which should be made known in the coming days. In any event, note that in our valuation, the agreement with Moderna is equivalent to € 10/sh., and the share price has shed € -9.40 (-13.8%) since last week’s highs. Although it could appear to be priced in, the stock has rallied €~40/sh. (1.6x in absolute terms; +108% vs. IBEX) since the agreement was announced in July’20, and thus we think a negative result from the investigation could lead to larger corrections in the share price.