European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

The recent reforms incorporate "loyalty shares" as an option, which in practice come to transform the 'one share one vote' rule that prevailed in listed companies to protect equal voting rights of shareholders. The instrument equates the Spanish rules with those of other European Union countries, such as Germany, Italy, France or the Netherlands, among others, and aims to reward long-term investors, also protecting companies against short-term investors (opportunistic funds).
The Government toughens the takeover law before the arrival of 'loyal investors' on fear that hard core shareholders will take control of Spanish companies with the new double voting system.
According to the change in the regulation, an investor who exceeds 30% of the vote of a company listed due to the double voting rights of the loyalty shares, will have three months to decide whether to launch a takeover bid, reduce participation or waive its new political rights.
The Ministry of Finance discreetly introduces the change in the new Securities Market Law.
In Spain, the companies that establish the double voting system will be less prone to receiving a takeover offer. If it is already difficult to carry out an offer now without the support of the hard core nucleus on shareholders (for instance, MásMóvil has had to agree with those of <a href="https://www.smartkarma.com/entities/euskaltel-sa" target="_blank" data-smartkarma-citation="entities:21263:1" rel="noopener">Euskaltel SA (EKT SM)</a> ), it will be next to impossible under the new framework.

The recent reforms incorporate "loyalty shares" as an option, which in practice come to transform the 'one share one vote' rule that prevailed in listed companies to protect equal voting rights of shareholders. The instrument equates the Spanish rules with those of other European Union countries, such as Germany, Italy, France or the Netherlands, among others, and aims to reward long-term investors, also protecting companies against short-term investors (opportunistic funds).
The Government toughens the takeover law before the arrival of 'loyal investors' on fear that hard core shareholders will take control of Spanish companies with the new double voting system.
According to the change in the regulation, an investor who exceeds 30% of the vote of a company listed due to the double voting rights of the loyalty shares, will have three months to decide whether to launch a takeover bid, reduce participation or waive its new political rights.
The Ministry of Finance discreetly introduces the change in the new Securities Market Law.
In Spain, the companies that establish the double voting system will be less prone to receiving a takeover offer. If it is already difficult to carry out an offer now without the support of the hard core nucleus on shareholders (for instance, MásMóvil has had to agree with those of Euskaltel SA (EKT SM) ), it will be next to impossible under the new framework.

Loyalty Shares in Spain: Double-Voting Rights Could Hinder Takeovers

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

EURO STOXX 50 Price EUR / Technical Analysis

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE). Still, we continue to see some reason for caution as various market dynamics have deteriorated, leading us to a more neutral outlook in the near-term.

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE). Still, we continue to see some reason for caution as various market dynamics have deteriorated, leading us to a more neutral outlook in the near-term.

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Today, the Victorian government rejected a A$250mn 300-metre floating gas terminal proposal at Mornington Peninsula. Planning Minister Richard Wynne said the Crib Point terminal would have had "<a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02358799-2A1289920?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">unacceptable environmental effects</a>" in Western Port.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/198/047/original/image_90576892521617071507869.png?1617071510" class="editor-image img-responsive" data-smartkarma-image-id="198047"></figure>
<div class="content-caption">Source: ABC. A protester in a wetsuit taking his concerns about the terminal to the Victorian Parliament in early March</div>
<a href="https://www.smartkarma.com/entities/agl-energy-ltd" target="_blank" data-smartkarma-citation="entities:554:1" rel="noopener">AGL Energy Ltd (AGL AU)</a>, which has already outlayed millions of dollars on the Crib Point project, <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02358799-2A1289920?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it was “considering its position” on the minister’s decision.
Concurrent with this rejection, AGL <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02358644-2A1289840?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">announced</a> it was splitting into two separate companies: a thermal coal generation business and a separate zero-carbon energy retailer. 
The split follows a raft of new initiatives/developments recently including an <a href="https://www.agl.com.au/about-agl/media-centre/asx-and-media-releases/2021/january/agl-announces-suppliers-for-grid-scale-battery-plans" target="_blank" rel="noopener">agreement</a> with suppliers for grid-scale battery plans, the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02355442-2A1288076?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">renewal</a> of the Portland smelter contract, and the <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02353382-2A1286980?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">participation</a> in PowAR's acquisition of <a href="https://www.smartkarma.com/entities/tilt-renewables-ltd" target="_blank" data-smartkarma-citation="entities:24371:1" rel="noopener">Tilt Renewables Ltd (TLT NZ)</a> (<a href="https://skr.ma/i5ugg" target="_blank" rel="noopener">Tilt Renewables: Mercury/PowAr's Big Blow</a>).
Speculation of a demerger has been running hot since Australia's oldest energy unity grappled with softening power prices, and a <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02340133-2A1279818?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">A$2.29bn</a> loss in the 1H21, exacerbated by A$2.7bn in <a href="https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02337704-2A1278422?access_token=83ff96335c2d45a094df02a206a39ff4" target="_blank" rel="noopener">impairment charges</a>. 
The share price reaction to the split was largely muted. 
As always, more below the fold.

Today, the Victorian government rejected a A$250mn 300-metre floating gas terminal proposal at Mornington Peninsula. Planning Minister Richard Wynne said the Crib Point terminal would have had "unacceptable environmental effects" in Western Port.

Source: ABC. A protester in a wetsuit taking his concerns about the terminal to the Victorian Parliament in early March
AGL Energy Ltd (AGL AU), which has already outlayed millions of dollars on the Crib Point project, announced it was “considering its position” on the minister’s decision.
Concurrent with this rejection, AGL announced it was splitting into two separate companies: a thermal coal generation business and a separate zero-carbon energy retailer. 
The split follows a raft of new initiatives/developments recently including an agreement with suppliers for grid-scale battery plans, the renewal of the Portland smelter contract, and the participation in PowAR's acquisition of Tilt Renewables Ltd (TLT NZ) (Tilt Renewables: Mercury/PowAr's Big Blow).
Speculation of a demerger has been running hot since Australia's oldest energy unity grappled with softening power prices, and a A$2.29bn loss in the 1H21, exacerbated by A$2.7bn in impairment charges. 
The share price reaction to the split was largely muted. 
As always, more below the fold.

AGL Energy (AGL AU): Carbon/Zero-Carbon Split

As long as market dynamics remain largely positive and the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we believe a constructive outlook is warranted. To reiterate, support levels to watch include $90 on ACWI-US, $53 on ACWX-US, and $52 on EEM-US. Open the attached file to read our complete International Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

As long as market dynamics remain largely positive and the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we believe a constructive outlook is warranted. To reiterate, support levels to watch include $90 on ACWI-US, $53 on ACWX-US, and $52 on EEM-US. Open the attached file to read our complete International Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

Global Equity Strategy: Constructive Pullback; Overweight Value

Our bullish outlook remains intact and is supported by the absence of breakdowns across major global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE) and ongoing positive market dynamics. Until this changes, we believe global equities are headed higher in the coming weeks and months.

Our bullish outlook remains intact and is supported by the absence of breakdowns across major global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE) and ongoing positive market dynamics. Until this changes, we believe global equities are headed higher in the coming weeks and months.

Global Equity Strategy: Stick With Reflation & Reopening Theme

Spain

Repsol S.A., through subsidiaries, explores for and produces crude oil and natural gas, refines petroleum, and transports petroleum products and liquefied petroleum gas (LPG).  The Company retails gasoline and other products through its chain of gasoline filling stations.  Repsol's petroleum reserves are in Spain, Latin America, Asia, North Africa, and the Middle East and United States.

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Repsol SA (REP SM)

Loyalty Shares in Spain: Double-Voting Rights Could Hinder Takeovers

In Spain, the companies that establish the double voting system will be less prone to takeover, such as Repsol SA (REP SM) and Telefonica SA (TEF...

Jesus Rodriguez Aguilar

Major Breakout For EURO STOXX 50

Our intermediate-term outlook remains constructive with major support levels holding on the broad global indexes (MSCI ACWI, ACWI ex-US, EM, and...

Vermilion Research

AGL Energy (AGL AU): Carbon/Zero-Carbon Split

The demerger announcement provides shareholders with a carbon exposure choice. Arguably, the split should be positive for forward growth for both...

David Blennerhassett

Global Equity Strategy: Constructive Pullback; Overweight Value

As long as the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we...

Vermilion Research

Global Equity Strategy: Stick With Reflation & Reopening Theme

Our bullish outlook remains intact supported by the absence of breakdowns across major global indexes. Until this changes, we believe global...

Vermilion Research

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