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Milan stocks end in the red despite strong industrial production data

by Eleonora Micheli

European markets ended mixed on Friday with Milan off 0.45% despite strong industrial production data, up 6.6% in December from the previous year. For all of 2016 it was up 1.6%.

The spread, now at 193 points, continues however to be a worrisome factor. And investors didn’t appreciate comments by Bundesbank chief Jens Weismann, who bashed Italy, saying, “Expectations were disappointed for those who bet that restructuring efforts undertaken by Italy before entering the monetary union would have continued under the common currency, and that the solidity of public finances would have been guaranteed to endure.”

Among blue chips, BPER was the worst performer, slipping by 7.8% on a wave of worse than expected 2016 financials. Profit fell by 90% to just €14.3 million from €220.7 million in 2015, on one-time items and the contribution to the Resolution Fund. The dividend was cut to six cents from 10 cents last year. Banco BPM was also down (-5.3%) ahead of its 2016 results, which came out after the market closed.

Weakness in the banking sector also hit shares of Mediobanca, which opened strong on higher-than-expected profit announced the day before but ended the session down 1.14%.
On the upside, UniCredit rose 0.56% on the fifth day of its €13 billion capital increase, and the day after announcing 2016 losses of €11.8 billion, as anticipated.

In the fashion sector Ferragamo nosed up 0.77% on the strategic plan presented last week by CEO Eraldo Poletto and strong numbers by France’s Kering. The giant conglomerate of the Pinault family, which owns Gucci, had a record 2016 with sales up 6.9% to €12.4 billion and net profit of €813.5 million, up 16.9%.

Among insurers Unipolsai ended in the red (-1%) as did Unipol (-1.3%), despite solid quarterly results. Unipolsai reported a 2016 profit of €527 million, down from €738 million the year before but still higher than anticipated on a strong showing by its financial management business.

Elsewhere, cement group Buzzi Unicem rose 2.7% after reporting 2016 turnover of €2.7 billion, about flat with last year but up over 1% at constant exchange rates. The company revealed that preliminary operating cash flow will beat market forecasts.