FTSE MIB Going Strong as Generali Share Price Leaps 10%

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European indices, including Italy’s FTSE MIB, are enjoying a largely positive session, as did their Asian peer earlier, despite the major U.S. indices finishing Monday slightly down. President Trump had an eventful first day in office yesterday as he promptly discarded the Trans-Pacific Partnership trade agreement negotiated by the Obama administration but not yet ratified by congress. The agreement, 10 years in the making, included Australia, Japan and another 9 Pacific Rim nations. The NAFTA (North American Free Trade Agreement) between the U.S., Canada and Mexico is next on Trump’s agenda and he plans to renegotiate terms. Having already clearly stated his dislike of the terms of the agreement during his election campaign he reiterated yesterday that he would withdraw the U.S. if he could not secure what he wanted in renegotiations. To round things off he confirmed his intention to impose a significant border tax on goods coming into the U.S. that have been manufactured abroad, applicable also to local corporations with manufacturing facilities outside of the country.

Despite the three U.S. benchmark indices suffering modest drops yesterday, European equities are generally doing well today. Italy’s FTSE MIB is up by 0.87% as the session draws to a close. Insurer Generali’s share price has rocketed by almost 10% today on rumours of a takeover bid by a partnership between German insurance peer Allianz and Italy’s largest bank Intesa Sanpaolo. Generali’s board are clearly taking the attempt seriously having moved today to buy up equity equal to 3.1% of the voting rights in Intesa. Italian stock market rules prevent any listed Italian financial group from owning more than 3% of another if the latter already owns a stake of more than 3% in it.

Mediobanca, another MIB constituent, is up 6.38%. The investment bank is Generali’s largest shareholder with a 13% stake. Intesa Sanpaolo is down 4.67%. The other banks on the MIB with no involvement in the Generali drama are also having a good day, all up.

Fiat Chrysler has registered a 4.66% gain. Fiat Chrysler’s CEO Sergio Marchionne will join his counterparts from GM and Ford in a breakfast meeting with Trump today to discuss how more car manufacturing jobs can be created in the U.S. Investment vehicle Exor is up 3.05%, financial services company Unipolsai 3.06%, and Unipol, and insurance group, by 2.52%.

The MIB’s heaviest faller, excluding Intesa Sanpaolo, is utilities company A2a with a relatively modest 1.23% slide.

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