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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
TECHNOLOGY
- Comms and Tech underperformed the €IG index by 0.3bp and 0.6bp this week leaving the YTD underperformance at 8.7bp and 12.4bp. Sentiment in the tech space has been negative on the back of semiconductor weakness and disappointing earnings in some non-EUR credit names like Intel and Amazon.
- On ratings, Fitch upgraded Telecom Italia to BB from BB- on the NetCo disposal. Seems like cash flow will be the factor in focus on upside potential with the chosen cash flow metric seen at 1.4% by 2026 against an upgrade threshold of 5% by 2027.
- We saw earnings this week from Cellnex (positive), SES (mixed), Telecom Italia (positive), Worldline (negative), T-Mobile (positive), Swisscom (negative), Wolters Kluwer (neutral), Telefonica (negative), Teleperformance (positive), Amadeus (neutral), Inwit (positive), Corning (neutral), American Tower (positive), Pearson (mixed).
- On tighteners, just two names are ending the week with tighter average spreads. Teleperformance after both equity and credit responded well to positive organic growth, above consensus FCF and the on-track Majorel integration along with some likely unwinding of the sales-force AI widening last week while Elisa stayed in the green mostly on their short-end 26s tightening 3bp; Elisa reported a couple weeks back in what were broadly in line results accompanied by a 0.2x improvement in leverage.
- On wideners, we note that most of the underperformers seemed to be driven by events in prior weeks, either unwinding previous moves (e.g. Netflix slightly unwinding post-upgrade outperformance) or as result of events before this week (e.g. Universal in the wake of their troubling subscription numbers, TDC Net which is really a HY issuer with IG senior secured debt that has limited leverage headroom at Fitch and Corning which reported soft Q3 guidance last Friday). IBM and Verizon are underperforming on the risk-off tone today with little in the way of company-specific news.
- Fitch upgrade of Telecom Italia; https://marketnews.com/fitch-upgraded-telecom-italia-after-the-close
- Teleperformance earnings; https://marketnews.com/teleperformance-h1-results-mixed-credit-metrics-stronger, https://marketnews.com/teleperformance-equity-and-spreads-perform-well-on-results
- Thoughts on Elisa from earnings preview; https://marketnews.com/elisa-q2-preview-stable-profile-though-dividend-policy-limits-upside-potential
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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