financial markets review (june 2014)
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June 2014
Performance of the main stock indices
Source: Snam on the Bloomberg data
The financial markets pag. 1 The utility sector pag. 2
Snam shares and its peers pag. 3
The oil markets
Oil prices increased through June, both for
the U.S. crude benchmark WTI (+2.6%,
closing at 105.4 $/barrel), as well as Brent
(+1.3%, at 112.1 $/barrel), mainly driven by
geopolitical tensions in Iraq.
Snam S.p.A. Investor Relations
The financial markets
June saw a positive trend for the US
S&P500 index (+1.9%) as well as the Stoxx
Europe Utilities sector index (+1.3%), while it
was negative for the European DJ Stoxx50 (-
0.6%) and the Italian FTSE MIB (-1.6%).
Stock markets, which in the first half of the
month benefitted from the announcement of
expansive monetary policy measures by the
ECB, were subsequently hit by uncertainty
over economic recovery in Europe, as well
as tensions over the increasing instability in
Iraq. Italian stocks were negatively impacted
by the payment of dividends by several com-
panies.
From a macroeconomic perspective, in the
United States (with reference to the month of
May, on a monthly basis) industrial produc-
tion (+0.6%) and retail sales (+0.3%) were
up, while durable goods orders were down (-
1.0%). GDP data in the first quarter of 2014
was down to -2.9% (QoQ annualised) from
its previous estimate of -1.0%, due to adver-
se weather effects and a drop in exports
(-8.9%). Interest rates were confirmed by the
Fed at their current levels (0-0.25%).
In the Eurozone, industrial production saw
an increase (+0.8% in April, compared to the
previous month), while there was a general
decline in leading indicators of economic
trends (with reference to June's data, on a
monthly basis) as well as the PMI composite
index (at 52.8 points, from 53.5), and the
German Ifo and ZEW indexes. The ECB has
reduced the official reference rate by 10
basis points, bringing it to 0.15% (a new
record low) from its previous 0.25%.
12.2%
15.4%
3.2%
6.1%
‐1.6%
1.3%
‐0.6%
1.9%
-5% 0% 5% 10% 15% 20%
DJ Stoxx 50
S&P 500
DJ Euro Stoxx Utilities
FTSE MIB
June ‘14
YtD ‘14
The Snam stock rose. The equity markets registered mixed trends in June, negatively affected mainly by a number of worse than expected macroeconomic data
Crude oil prices closed up
The equity markets registered mixed perfor-
mance in June, boosted on the one hand by
the ECB's expansionary monetary policies
earlier in the month, and negatively impacted
on the other hand by lower than expected
economic data in the Eurozone.
Individual sectors also saw mixed trends.
Certain sectors ended the month up, such as
the oil & gas sector, which was bolstered by
the rise in crude oil prices due to tensions in
Iraq. The majority of sectors closed down,
particularly the banking sector, which was hit
by recapitalization activities (Deutsche
Bank), and the tourism and leisure sector,
driven down by high fuel prices and several
profit warnings (Lufthansa).
The utility sector registered a positive perfor-
mance, supported by visible and attractive
returns during a period of low interest rates.
In June, the utility sector registered a positi-
ve performance of 1.3%.
The sector's performance was boosted by
investor interest both for integrated and re-
gulated companies, seeking higher returns
during a period of low interest rates. Regula-
ted companies were however hit by dividend
payments by several companies (National
Grid -5.6%). Lastly, the introduction of the so
-called capacity mechanism in Germany
boosted integrated German companies
(E.on +5.6% and RWE +6.5%).
The Utility sector in the Stock Market
Source: Snam on the Bloomberg data
Main sector performance, June 2014
Sector and subsector performance, June 2014
‐1.6%
1.9%
‐1.7%
1.3%
-5% 0% 5%
.
Defensive Utilities
DJ Utility
Energy Utilities
Others
The utility sector registered a positive performance, supported by visible and attractive returns during a period of low interest rates.
The Utility sector performance
Financial Markets Review June 2014 Snam S.p.A. Investor Relations
DJ Ut i l i t y; 1,3%
DJ Insur ance; -1,2%
DJ T el ecom; -1,3%
DJ Heal th Car e; 2,6%
DJ M edi a; -1,8%
DJ Real Estate; 0,8%
DJ T r avel &Lei sur e; -2,4%
DJ Chemi cal s ; -1,1%
DJ Food&Bev; 0,3%
DJ Const&M ater ; -1,0%
DJ Inds Good; -1,9%
DJ Oi l &Gas; 2,8%
DJ Per s&Househol ds; -1,0%
DJ Autopar ts ; -2,2%
DJ T ech; -1,8%
DJ Fi nanci al Ser vi ces; 0,2%
DJ Retai l ; -0,8%
DJ Banks; -5,0%
DJ Basi c Resour ces; 1,6%
-10% -5% 0% 5% 10%
13,3%
‐5,6%
8.2%
6.1%
23.7%
37.7%
6.6%
31.3%
15.4%
12.2%
3.2%
2.2%
‐1.1%
8.8%
6.1%
‐1.8%
1.6%
1.3%
‐1.6%
‐0.6%
-10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40%
The Snam shares and its peers in the Stock Markets
The Snam stock closed the month of June
with a positive performance of 2.2% (€ 4.40
per share), outperforming both the Utility
sector and the Italian market.
The stock was boosted by interest rates at
historic lows, which pushed investors to-
wards securities that offer high and sustai-
nable returns.
The stock's average daily trading volume in
June totaled 9 million units, down from 12.7
million in May
EMTN program renewal
thus confirming its excellence in the mana-
gement and communication of anti-
corruption activities. Snam’s anti-corruption
procedure is indicated by Transparency
International Italy as an example of “ absolu-
te excellence".
Snam has always been significantly commit-
ted to business ethics and, more generally,
to the promotion of good behaviors ensuring
its reliability as well as its industrial and
ethics robustness, also taking into account
the social relevance of its activities. For this
reason, Snam has adopted tools and pro-
grams in line with the international anti-
corruption best practices and is engaged in
continuous education and information activi-
ties both internally and externally.
Corporate News
Snam and its peers
Source: Snam on the Bloomberg data
YtD ‘14
June ‘14
FTSE MIB
Stoxx 50
DJ Utility
United Utilities
NG
Severn Trent
REE
Enagas
Snam
Terna
On 23 June Snam's Board of Directors, chai-
red by Lorenzo Bini Smaghi, approved the
renewal of the EMTN Program for a maxi-
mum overall value of up to 12 billion euros
and, therefore, the issue before 30 June,
2015 of one or more further bonds with an
overall value of up to 2 billion euros to be
placed with institutional investors operating
mainly in Europe, in accordance with the
terms and conditions of the EMTN Program.
The EMTN Program is an efficient instrument
to find significant financial resources on the
market in a quick, flexible and cost-
competitive manner, in compliance with the
expected development of the Company’s
target financial structure. The issued bonds
may be listed on one or more regulated mar-
kets
On 27 June Snam has obtained by Transpa-
rency International Italy the highest score for
its proactivity and transparency in the mana-
gement and communication of anti-
corruption programs and activities. The sco-
re follows the assessment on Transparency
in Reporting on Anti-Corruption (TRAC)
promoted by the renown non-governmental
organization fighting corruption worldwide.
The TRAC project stems from the need to
raise the level of transparency of corporate
communications and demonstrate the firms’
effective commitment to actively fight against
corruption.
Snam, in particular, has achieved the top
score (100%) in both the two applicable
sections of the evaluation (Anti-corruption
program and Organization transparency),
Financial Markets Review June 2014 Snam S.p.A. Investor Relations
Snam SpA
Piazza Santa Barbara 7 - 20097 S. Donato Milanese (Mi) Italy
www.snam.it — [email protected]
tel: +39 02 37037272- fax: +39 02 37037803
Highest score for anti-corruption activities
Agenda
July 30/31 Interim financial report at 30 June 2014 Board of Director, press release and Conference call