European holding companies in light of Brexit-Makor's Bi-weekly monitor
Holding companies’ discounts usually tend to tighten in bullish markets and widen in bearish markets. Surprisingly, the volatility of the last days following the Brexit vote did not have a major impact on most of the holding companies’ spreads (at least not yet…). In fact as can be seen in the chart below, in some cases the discount has actually tightened since our previous report two weeks ago (June 14). The two names in which the discount widened significantly and now trade at above the average level, are Renault and Unipol. This week we put our focus on Renault/ Nissan spread (being the worst performer in the portfolio), and discuss our thoughts on it – see page 2. We also point out that the CDI/LVMH spread has performed in line with our expectations (see our report from May 26) and despite market volatility the discount narrowed by 1.7%.
Full report attached.