Holding Companies Report - Makor’s monitor
Good morning,
Please find attached our holding companies report that includes anupdated table of discounts to NAVs based on Feb 3 ,2017 closing prices.
Ahead of 4Q earnings season we take profit in the following trades:
RWE/Innogy - RWE/Innogy - On our Jan 17 report we recommend to start building a position of Short RWE/Long Innogy pro rata of the capital structure. Since then the spread almost doubled and widened from 10% to its current level of 18.7%. On the back of the spread widening and ahead of FY16 annual release (March 14, 2017) and the expected ruling on the NFT case, we recommend to take ~9% profit from this trade.
Unipol Gruppo/Unipol Sai – The spread continued its positive momentum of the last few weeks and tightened by another 2.4% to its current level of 28.4%. We note that the spread is now trading ~9% below its December high of 37%. We recommend to take profit ahead of FY16 preliminary results due on Friday Feb 10, 2017.
Renault/Nissan – this trade has also been one of our top picks with Renault spread tightening by another 2.6%. it is now trading at 18.4%, the lowest level of the past 6m and down from peak level of 30%+ seen in September. The company will release FY16 results on Friday Feb 10, 2017.
LVMH/CDI: the spread widened by 3.0% to its current level of 11.8%. We continue to like the level of the spread which is still trading ~3% below the last 12m average. LVMH and Dior will release 4Q results on Wednesday (Feb 9, 2017) and we will update our NAV and recommendation following results.
Full report attached!