December 7, 2016 / 5:03 AM / 8 months ago

Italy - Factors to watch on Dec. 7

8 Min Read

The following factors could affect Italian markets on Wednesday.

Reuters has not verified the newspaper reports, and cannot vouch for their accuracy. New items are marked with (*).

For a complete list of diary events in Italy please click on .

Politics

Italy's President Sergio Mattarella wants parliament to draft a new electoral law before any ballot is held, a source close to the president said on Tuesday, a move likely to delay any vote after Prime Minister Matteo Renzi resigns.

Prime Minister Matteo Renzi is expected to officially tender his resignation to President Sergio Mattarella on Wednesday after the Senate gives a final approval to Italy's 2017 budget.

U.S. President Barack Obama called Italy's outgoing prime minister on Tuesday to talk about this week's referendum and assure him that Italy will remain a close ally of the United States, the White House said.

When former Italian president Giorgio Napolitano tapped Matteo Renzi as prime minister in February 2014, he urged his younger colleague to change the constitution in order to make it easier to govern Italy. Early this year, Napolitano fretted that Renzi was taking the wrong approach in doing so.

Economy

Bank of Italy releases November data on European Central Bank funding to Italian banks.

Debt

Italy said on Tuesday it would offer 4.75 billion euros in 12-month BOT bills on Dec. 12.

Borrowing costs in southern Europe fell on Tuesday with Italian yields briefly hitting three-week lows as focus turned from an Italian referendum to expectations the ECB would contain any financial-market fallout when it meets later this week. (*) Italian bond yields fell on Wednesday after reports the government is preparing to rescue ailing lender Monte dei Paschi as hopes of a private recapitalisation fade.

Companies (*) Italian Banks

Italy is set to ask the European Stability Mechanism a loan of 15 billion euros, Italian daily La Stampa reported on Wednesday, quoting two sources from the Treasury. The request would be not only for ailing Banca Monte dei Paschi di Siena but also for other struggling banks in the country.

A spokesman for the Italian Treasury declined to comment on the report.

Banca Monte Dei Paschi Di Siena

Italy is preparing to take a 2 billion euros ($2.1 billion) controlling stake in Monte dei Paschi as the bank's hopes of a private funding rescue fade following Prime Minister Matteo Renzi's decision to quit, two sources close to the matter said on Tuesday.

The sources said a government decree authorising the deal, which would see the state buy the subordinated bonds from retail investors and convert them into shares, could be rushed through as early as this weekend. (*) A decree authorising public intervention could be passed in the first days of next week, once a new government is sworn in, reported la Repubblica. (*) A credible new government could make the Qatar Investment Authority reconsider its participation, which still is not ruled out, the unsourced report added. (*) Nationalisation of the bank is becoming inevitable although the decree has still not been written up, reported Corriere della Sera. It added that it is highly unlikely that it will be passed by Prime Minister Matteo Renzi, who wants the upcoming government to take care of it. (*) The ECB Supervisory Board may give the bank until the end of January to bring its capital ratios back above minimum regulatory requirements, il Sole 24 Ore reported.

(*) Unicredit

U.S. fund Capital Research could raise its stake in the lender up to close to 10 percent, by buying into the upcoming rights issue, la Repubblica reported, without quoting sources.

The report also cited a board member as saying CEO Jean Pierre Mustier said the current market conditions had no impact on the bank's strategic plan.

Unicredit could keep a 10 percent stake in its asset manager Pioneer, MF reported.

Unicredit, Finecobank

As part of its strategic plan, the lender could sell a further stake in the online broker, Il Messaggero reported.

Ubi Banca

The ECB's Supervisory Board will not discuss on Thursday UBI's proposed acquisition of three small banks that were rescued from bankruptcy in November 2015, two sources close to the matter said on Tuesday, adding some issues still had to be ironed out which may require another couple of months.

Banca Popolare Di Vicenza, Veneto Banca

Banca Popolare di Vicenza appointed on Tuesday Fabrizio Viola, the former head of Monte dei Paschi, as its new chief executive to steer the troubled regional bank through a proposed merger with rival Veneto Banca.

Separately on Tuesday, Viola was also appointed as director and chairman of a strategic committee at Veneto Banca.

Banca Popolare Di Sondrio

Assopopolari, the association of Italy's cooperative banks, on Tuesday asked for a delay of an end-December deadline for large cooperative banks to transform into joint-stock companies pending a court ruling on the reform. Popolare Sondrio and Popolare Bari are the only two large "popolari" banks that have yet to adopt the changes.

Telecom Italia

Vivendi has raised its stake to 24.19 percent of the Italian phone group's capital.

Molmed

The pharmaceutical group said on Tuesday it had filed a conditional marketing authorisation with the European Union for its NGR-HTNF investigational anti-cancer drug.

Salini Impregilo

The builder said on Tuesday its Lane unit had won contracts in the United States and the United Arab Emirates worth $370 million.

Alerion Clean Power

Eolo Energia said on Tuesday it was launching a mandatory tender offer on 61.13 percent of Alerion's capital at 2.46 euros per share as requested by market regulator Consob.

Eolo Energia, the vehicle Italian utility Edison set up with F2i investment fund, held 38.87 percent of Alerion following a previous voluntary takeover bid.

(*) Brunello Cucinelli

Chairman and Chief Executive Brunello Cucinelli said he would like the government to cut taxes on wages so that workers could earn more, in an interview with La Stampa.

Arnoldo Mondadori Editore

Starts negotiations on STAR segment.

Pierrel

Extraordinary shareholders' meeting (0930 GMT).

Bourse After Hours market closed.

For Italian market data and news, click on codes in brackets:

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FTSE IT allshare index

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Stories on Italy...... IT-LEN

For pan-European market data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. DJ STOXX index...................................... Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................ Main stock markets: Dow Jones............... Wall Street report ..... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. Frankfurt market stories CAC-40................. Paris market stories... World Indices..................................... Reuters survey of world bourse outlook......... Western European IPO diary.......................... European Asset Allocation........................ Reuters News at a Glance: Equities............... Main currency report:............................... ($1 = 0.9336 euros)

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