EUR 100.00 For Business Accounts Only

IBERIAN DAILY 25 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: TALGO.

The Ibex near 11,000 points
It was a good week for most indices at both sides of the Atlantic, where after the Central Banks meetings markets price in a high probability of rate cuts in June by the Fed. The Ibex stood out last week in Europe, hitting 2017 highs. Thus, in the STOXX 600, all sectors except Consumer Goods, Food and Pharma saw gains last week, led by Real Estate and Basic Resources. On the macro side, in Germany, March’s IFO climbed more than expected, with the expectations component returning to May’23 levels. From the ECB, J. Nagel admitted that the probability of rate cuts before the summer has increased whereas M. Centeno backed adapting the monetary policy to an inflation level below 3%. In the UK, February’s retail sales slowed down less than expected but confirmed a very weak data. In the US, the Senate approved a spending draft worth US$ 1.2 Bn that avoids a partial shutdown, putting an end to March budget stagnation. From the Fed, R. Bostic was less confident about the inflation pattern, only expecting a rate cut at the end of the year.
What we expect for today
European stock markets would open flat with some bearish bias and focused on the messages from Central Banks. Currently, S&P futures are down -0.1% (the S&P 500 ended +1.2% higher vs. the European closing bell). Asian stock markets are mixed (China’s CSI 300 +0.21%, Japan’s Nikkei -1.3%).
Today in the US we will learn February’s construction licences and new home sales.

COMPANY NEWS

TALGO, SELL
According to the press and due to the government’s opposition to Magyar Vagón’s TOB, Trilantic would be negotiating with Stadler the sale of its stake (40.6%). If carried out in the end, Stadler would have to launch a takeover bid for 100% of the company as it will exceed the 30% limit. Stadler has financial muscle to carry out the deal although it would be a transformational acquisition (TLGO accounts for around 20% of Stadler’s market cap). The rumours about the possible acquisition of Talgo by Stadler are not new, and the Swiss manufacturer has never confirmed its interest, and thus we believe the deal is unlikely to go through. However, we expect a positive reaction on the share price.