European Event-Driven Analyst

Jesus Rodriguez Aguilar

Equity Bottom-Up

Banca Monte dei Paschi di Sien / Equity Bottom-Up

<ul>
<li>The Italian Treasury sold an additional 12.5% stake in <a href="https://www.smartkarma.com/entities/banca-monte-dei-paschi-di-sien" target="_blank" data-smartkarma-citation="entities:21162:1" rel="noopener">Banca Monte dei Paschi di Sien (BMPS IM)</a>, raising €650 million as part of re-privatization efforts following the 2021 failed attempt.</li>
<li>The Treasury's divestment makes BMPS more appealing for buyers. BMPS still trades at attractive valuation multiples. The bank announces approval from the ECB for a €0.25 cash dividend per share. </li>
<li>Economy Minister Giorgetti and PM Meloni aim to boost competition through privatization, favoring a merger with another mid-sized Italian bank, possibly BPER Banca or Banco BPM.</li>
</ul>


The Italian Treasury sold an additional 12.5% stake in Banca Monte dei Paschi di Sien (BMPS IM), raising €650 million as part of re-privatization efforts following the 2021 failed attempt.
The Treasury's divestment makes BMPS more appealing for buyers. BMPS still trades at attractive valuation multiples. The bank announces approval from the ECB for a €0.25 cash dividend per share. 
Economy Minister Giorgetti and PM Meloni aim to boost competition through privatization, favoring a merger with another mid-sized Italian bank, possibly BPER Banca or Banco BPM.


Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>We remain constructive on global equities as long as the MSCI ACWI (ACWI-US) holds above major support at $90.50-91.50.</li>
<li>We continue to monitor for whether ACWI-US and EEM-US break supports at $90.50-91.50 and $37, or if broken indexes (EURO STOXX 50, MSCI ACWI ex-US, EAFE) can reclaim supports.</li>
<li>Neither has happened yet, so we remain in wait-and-see mode. We are downgrading non-US small-caps to market weight. Non-US Value remains leadership -- remain overweight/buys in Financials and Communications</li>
</ul>


We remain constructive on global equities as long as the MSCI ACWI (ACWI-US) holds above major support at $90.50-91.50.
We continue to monitor for whether ACWI-US and EEM-US break supports at $90.50-91.50 and $37, or if broken indexes (EURO STOXX 50, MSCI ACWI ex-US, EAFE) can reclaim supports.
Neither has happened yet, so we remain in wait-and-see mode. We are downgrading non-US small-caps to market weight. Non-US Value remains leadership -- remain overweight/buys in Financials and Communications


MSCI ACWI, MSCI EM Still Above Supports; Buys in Global Value - Financials and Communications

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Event-Driven

<ul>
<li>Credit Agricole has acquired a 9.18% stake in Banco BPM, sparking takeover bid speculation; Italy is Credit Agricole’s biggest banking market ex-France, where it has been very active on M&amp;A</li>
<li>For Credit Agricole, in our view, Banco BPM’s strong Northern Italian footprint, its cleaner and stronger balance sheet and its asset management arm are all big attractions for this asset</li>
<li>We remain positive on Banco BPM, one of our 2022 High Conviction Ideas; not only a modestly valued potential M&amp;A target, but its valuations are also underpinned by improving fundamentals</li>
</ul>


Credit Agricole has acquired a 9.18% stake in Banco BPM, sparking takeover bid speculation; Italy is Credit Agricole’s biggest banking market ex-France, where it has been very active on M&amp;A
For Credit Agricole, in our view, Banco BPM’s strong Northern Italian footprint, its cleaner and stronger balance sheet and its asset management arm are all big attractions for this asset
We remain positive on Banco BPM, one of our 2022 High Conviction Ideas; not only a modestly valued potential M&amp;A target, but its valuations are also underpinned by improving fundamentals


Banco BPM: Credit Agricole Makes Its Move

<ul>
<li>Among EM banks, our top picks are Sberbank in Russia, Banco do Brasil and HDFC Bank in India; we are negative on recent IPO Nubank due to inflated market expectations</li>
<li>Our top picks for 2022 are BBVA and Banco BPM for Southern Europe banks. In Exchanges, we are positive on B3 of Brazil and SGX</li>
<li>In payments, we like Mastercard and Pagseguro, but we are negative on Paytm; we see BTG Pactual as an attractive pick and winner in the digital wealth managers and brokers</li>
</ul>


Among EM banks, our top picks are Sberbank in Russia, Banco do Brasil and HDFC Bank in India; we are negative on recent IPO Nubank due to inflated market expectations
Our top picks for 2022 are BBVA and Banco BPM for Southern Europe banks. In Exchanges, we are positive on B3 of Brazil and SGX
In payments, we like Mastercard and Pagseguro, but we are negative on Paytm; we see BTG Pactual as an attractive pick and winner in the digital wealth managers and brokers


2022 High Conviction Ideas in FinTech & Financials

<ul>
<li>CASA’s enhanced offer for <a href="https://www.smartkarma.com/entities/credito-valtellinese-spa" target="_blank" data-smartkarma-citation="entities:21175:1" rel="noopener">Credito Valtellinese SpA (CVAL IM)</a> confirms the appetite for M&amp;A in Southern Europe, and Italy in particular</li>
<li>We expect Italian M&amp;A to be largely intra-country, as the key factors driving consolidation is the need for greater domestic scale given the lower for longer interest rates, especially in Europe, as well as the march of digital banking globally</li>
<li>After <a href="https://www.smartkarma.com/entities/intesa-sanpaolo-spa" target="_blank" data-smartkarma-citation="entities:21200:1" rel="noopener">Intesa Sanpaolo (ISP IM)</a>-UBI, and now potentially the conclusion of CASA Italia-CreVal, the focus is on the future of <a href="https://www.smartkarma.com/entities/banca-monte-dei-paschi-di-siena" target="_blank" data-smartkarma-citation="entities:21162:1" rel="noopener">Banca Monte dei Paschi di Siena (BMPS IM)</a> </li>
<li>A combination between <a href="https://www.smartkarma.com/entities/banco-bpm-spa" target="_blank" data-smartkarma-citation="entities:28121:1" rel="noopener">Banco BPM SpA (BAMI IM)</a> and <a href="https://www.smartkarma.com/entities/bper-banca-s-p-a" target="_blank" data-smartkarma-citation="entities:21165:1" rel="noopener">BPER Banca S.p.A (BPE IM)</a> now seems less likely; this implies that Banco BPM is a potential contender, once again, to combine with BMPS; the latter has largely de-risked its balance sheet, even if its core capital ratio is low</li>
<li>We would see a BPM-BMPS union as a major positive catalyst for a <a href="https://www.smartkarma.com/entities/unicredit-spa" target="_blank" data-smartkarma-citation="entities:21234:1" rel="noopener">UniCredit SpA (UCG IM)</a>  re-rating; even if Unicredit were to acquire BMPS, we believe that, at current valuations, a lot of the risks are discounted</li>
<li>Risks to our positive Unicredit view include Unicredit’s acquisition of BMPS on unfavourable terms, as well as worse than expected organic performance of revenue growth, given the challenging interest rate environment</li>
</ul>


CASA’s enhanced offer for Credito Valtellinese SpA (CVAL IM) confirms the appetite for M&amp;A in Southern Europe, and Italy in particular
We expect Italian M&amp;A to be largely intra-country, as the key factors driving consolidation is the need for greater domestic scale given the lower for longer interest rates, especially in Europe, as well as the march of digital banking globally
After Intesa Sanpaolo (ISP IM)-UBI, and now potentially the conclusion of CASA Italia-CreVal, the focus is on the future of Banca Monte dei Paschi di Siena (BMPS IM) 
A combination between Banco BPM SpA (BAMI IM) and BPER Banca S.p.A (BPE IM) now seems less likely; this implies that Banco BPM is a potential contender, once again, to combine with BMPS; the latter has largely de-risked its balance sheet, even if its core capital ratio is low
We would see a BPM-BMPS union as a major positive catalyst for a UniCredit SpA (UCG IM)  re-rating; even if Unicredit were to acquire BMPS, we believe that, at current valuations, a lot of the risks are discounted
Risks to our positive Unicredit view include Unicredit’s acquisition of BMPS on unfavourable terms, as well as worse than expected organic performance of revenue growth, given the challenging interest rate environment


Southern Europe Banks: Focus on Italian Banks M&A

Italy

Banco BPM S.p.A. operates as a bank. The Bank offers private and corporate banking, loans, e-banking, investment, and other related services. Banco BPM serves customers in Italy.

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Banco BPM SpA (BAMI IM)

Reborn from Ashes and Possible Target

Italian Treasury sells 12.5% stake in BMPS, raising €650 million for re-privatization efforts. BMPS trades at attractive multiples and could be...

Jesus Rodriguez Aguilar

MSCI ACWI, MSCI EM Still Above Supports; Buys in Global Value - Financials and Communications

MSCI $ACWI, MSCI EM $EEM Still Above Supports at $90.50-$91.50 and $37, though being tested today. Meanwhile, broken indexes (EURO $STOXX 50,...

Vermilion Research

Banco BPM: Credit Agricole Makes Its Move

Credit Agricole's initial stake in Banco BPM suggests the first step for further acquisitive growth in Italy; based on the CreVal deal, this could...

Victor Galliano

2022 High Conviction Ideas in FinTech & Financials

Our 2022 high conviction ideas include buys on Sberbank, Banco do Brasil and HDFC Bank, as well as BBVA, Banco BPM, B3, SGX, Mastercard and...

Victor Galliano

Southern Europe Banks: Focus on Italian Banks M&A

The prospect of Italian bank sector M&A in Italy is overly penalizing Unicredit shares for the risk of a BMPS deal. With the BPM-BPER union called...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Reborn from Ashes and Possible Target

​Italian Treasury sells 12.5% stake in BMPS, raising €650 million for re-privatization efforts. BMPS trades at attractive multiples and could be...

Jesus Rodriguez Aguilar

MSCI ACWI, MSCI EM Still Above Supports; Buys in Global Value - Financials and Communications

MSCI $ACWI, MSCI EM $EEM Still Above Supports at $90.50-$91.50 and $37, though being tested today. Meanwhile, broken indexes (EURO $STOXX 50,...

Vermilion Research

Banco BPM: Credit Agricole Makes Its Move

Credit Agricole's initial stake in Banco BPM suggests the first step for further acquisitive growth in Italy; based on the CreVal deal, this could...

Victor Galliano

2022 High Conviction Ideas in FinTech & Financials

Our 2022 high conviction ideas include buys on Sberbank, Banco do Brasil and HDFC Bank, as well as BBVA, Banco BPM, B3, SGX, Mastercard and...

Victor Galliano

Southern Europe Banks: Focus on Italian Banks M&A

The prospect of Italian bank sector M&A in Italy is overly penalizing Unicredit shares for the risk of a BMPS deal. With the BPM-BPER union called...

Victor Galliano

Italian Treasury sells 12.5% stake in BMPS, raising €650 million for re-privatization efforts. BMPS trades at attractive multiples and could be...