Behavioural finance theory tells us that markets are susceptible to short term emotional moves and politics can be part of that. For example, the current narrative of isolationism and tariff barriers impacting EM exporters as strategists and analysts try and pull out economic effects from the potential policies of the new US administration.
Since the DB /LSE merger was announced (a year ago officially), it has been more beneficial to LSE shareholders than to DB’s, with a valuation gap (29x for LSE vs. 18x for DB) that has never closed. Respective shares have continued to trade in an uncorrelated way suggesting that not only the deal is not consummated but that the GBP/Brexit tango cannot be ignored.
Returns in offshore wind projects have come under pressure with intense competition and aggressive assumptions. As the technology matures, Citi analysts believe falling costs should support a 7-9% project return in the long ter. The case of Gamesa.
Intermoney | For 2017, the forecasts for private consumption indicate that Spain’s advertising market will continue to grow. We reiterate our Buy recommendation for Artresmedia and maintain our Target Price of 13,0 euros/share with a potential upside of 24%.
Cellnex shares have under performed the sector by c.16% since mid -Oct 2016, mainly due to higher government bond yields and the market’s rotation out of yield stocks which, in the case of TowerCos, may have been exacerbated by their dependence on M&A.
Técnicas Reunidas has been awarded by Saudi Aramco the contract for the turnkey project Clean Fuels within the Ras Tanura refinery on the east coast of country. No financial details of the contract have been revealed, but it means a good start to the year for the company and strengthens its position in the Middle East market.
Alfonso de Gregorio (Gesconsult) | We like Euskaltel because of its strong cash generation and good market positioning. In addition, there are the possibilities for inorganic growth and the good macroeconomic and industry outlook for the group’s business.
UBS | Based on our latest conversations with investors, the following three questions emerged on Iberdrola: Could we see EPS growth upgrades following the strategic update on Feb-2017? Could renewables growth plans in the US be at risk? And, Is the company likely to pursue inorganic growth as suggested by recent press articles?
Carax- Alphavalue | 2016 is no great vintage for Spanish group Ferrovial (Add, France) which spent the year sailing into headwinds including the bankruptcy of one of its US toll roads in March, Brexit in June (36% of sales are generated in the UK) and the widening of South European sovereign spreads from October.
Carax Alphavalue | The recent OPEC deal was more than welcomed by the Norwegian oil company which has more than 60% of its production coming from the Continental Shelf. With little by way of refining compared to its integrated oil peers’, Statoil’s (Add, Norway) earnings are a near direct call on oil prices.