Commodity prices ended 2020 with significant growth, whilst the major global economies (except China) suffered sharp declines in their GDP.The combination of demand and supply factors and elements of the financial situation have led to a mismatch between commodity prices and activity in the real economy.
Banca March | Total’s CEO, Patrick Pouyanné, has given an interview to the Financial Times in which he warns of the danger of a possible “bubble” in the renewable energy sector. According to Pouyanné, and without mentioning specific examples, the scarcity of important assets in this type of energy has led to a number of acquisitions with “crazy” valuations, in some cases reaching multiples of up to 25 times profits.
Acciona expects the IPO to take place this year, market conditions permitting. The perimeter of the new company would include the entire Energy business, excluding the company’s stake in wind turbine manufacturer Nordex. The size and structure of the transaction is yet to be defined, but the free float would at least be 25% of the capital of the new listed company.
Morgan Stanley | Spectrum auctions are a key issue for investors in the telecommunications industry, which can act as a negative catalyst for their share price given the high prices we have seen in previous auctions in Italy, Germany and the US. In Spain, there are 3 auctions on the radar. The first is the 3.5GHz – 20MHz band available. This is taking place today, involving Telefónica and Orange, at an estimated price of €21 million per 10MHz block.
Hans-Georg Betz | At the end of last year, Elon Musk announced that he was going to leave Silicon Valley to find greener pastures in Texas. To be more precise, Austin, Texas. Austin is not only the capital of the Lone Star State. It also happens to be an oasis of liberalism in a predominantly red state. Recently, there has been a lot of talk about the “tech exodus” from Silicon Valley. Michael Lind, the influential social analyst and pundit who also happens to teach at UT, has preferred to speak of a “Texodus,” as local patriotism obligates.
Akira Horiguchi (Capital Group) | 2020 was a rather eventful year for Japan following a series of headline-grabbing events, including COVID-19, a delay of the Tokyo Summer Olympics and a surprise change in leadership in September. Yoshihide Suga’s succession of his ally Shinzo Abe as prime minister, in particular, has provided investors plenty to think about in terms of what Suga’s leadership could mean for Japanese stocks heading into the new year.
Bruno Cavalier (Oddo-Bh) | In January, inflation in the Eurozone jumped by 1.2 points to 0.9% yoy, largely due to the increase in VAT rates in Germany. Later this year, the ECB’s target inflation rate of 2% is likely to be exceeded. After the compression of some prices in 2020, the base effects are expected to be very strong. The ECB has no reason to react to a bump in inflation, but since Christine Lagarde has accustomed us to a convoluted message to please the “hawks”, we cannot exclude the possibility of the ECB getting muddled up in its communication.
Biosearch is a small Spanish biotech company based in Granada, specialising in the research, development and sale of functional ingredients (natural extracts, omega-3 and probiotics) for the nutrition and healthcare markets. The company’s triple positioning in those growing markets has enabled the company to weather the Covid crisis and captured the attention of the giant Kerry Group. Its Spanish subsidiary has made an offer for 100% of Biosearch at 2.2/share, which means a premium of 45.7%
Link Securities | Spain’s public debt increased in 2020 by 122.4 billion euros, which takes this item at 1.311 billion euros at the end of the fiscal year, according to data from the Bank of Spain. In terms of Gross Domestic Product, Spanish public debt would have finished last year at 117%, a ratio not reached since 1902 due to the consequences of the Cuban War and the global crisis in agricultural prices.
European Views | With EU-Russia relations at rock bottom following the arrest of dissident politician Alexei Navalny, a vicious crackdown on protesters, and the expulsion of several EU diplomats from Russia, imposing sanctions on the country should be a no-brainer for Brussels. Indeed, the Kremlin’s chronic flouting of international rules and norms, particularly as regards human rights, presents a fitting opportunity to put the EU’s newly minted Magnitsky-style sanctions regime to good use for the first time.