MGI Weekly round-up | June 30th 2017
Stories MGI has been tracking this week:
- “Mega campus” for tech startups opens in Paris
- Israel’s spy agency launches investment fund for tech startups
- Italy’s bank crisis finds respite
And as always, we feature content from the MGI data and analysis platform, a summary of the week’s key statistical releases, and a look to the week ahead in data. In this edition, we take a closer look at the health of Italy’s private bank loan portfolio in light of recent news.
"Mega campus” for tech startups opens in Paris
Paris has opened the world’s biggest startup incubator. Dubbed ‘Station F’, the facility’s 34,000 square meters hope to provide a home for 1000 early-stage companies. The site promises 24-hour eateries, bars, 3-D printing labs, and will offer 26 programs to assist young companies. It counts Facebooks and Microsoft among its partners.
Billionaire Xavier Niel described the launch this week as Paris’s bid to attract innovative companies away from London, in hopes of dominating Europe’s startup scene. President Emmanuel Macron has promised a suite of business and innovation policies geared at creating a "startup nation”. Paris joins Berlin, Dublin, Amsterdam, and Frankfurt in trying to lure companies away from the UK after Brexit.
Israel’s spy agency launches investment fund for tech startups
France isn’t the only Med country getting into the startup game this week. The Israeli spy agency Mossad announced a new fund for high-tech companies. The agency is looking to invest in technologies that both support Israel’s security industry and further the nation’s business growth agenda. They hope to fund companies entering the space of encryption, profiling of online behaviour, robotics, and machine learning, as well as new takes on traditional land, sea, and air support.
The fund will provide grants of up to 2m shekels ($570,0000) to individual companies, in return for access to the intellectual property created by the programs. Israel has a vibrant tech sector that often receives state support; however, the startup fund is a novel approach in the country that has yet to be tested.
Italy’s bank crisis finds respite
In a dramatic end to a weekend private banking crisis, Italy agreed to put €17bn of public funds toward the wind up of two mid-sized banks after the European Central Bank deemed them to be failing (MGI previously reported on a similar deal for the third largest bank, Monte dei Paschi di Siena). Intesa Sanpaolo, the country’s strongest lender, will takeover the performing assets of Veneto Banca and Banca Popolare di Vicenza in the deal.
The move resulted in the rise of financial stock prices across Europe, with Italian stocks themselves outperforming the broader European baskets. Investment fund managers are finding the Italian bond market—particularly bonds held by Italian households—increasingly attractive after the government’s continued eagerness to use public funds to shelter retail bondholders from losses, the FT reports.
Featured content from the MGI.online data and analysis portal
The erosion of Italy’s banking sector can be seen using MGI.online’s World Bank statistics visualisation tool and MGI’s powerful forecast generation. In the example below, we’ve selected ‘Bank nonperforming loans to total gross loans’ following the turn of the millennium. We see the dramatic rise in nonperforming loans in the wake of the financial crisis, from 6.3% in 2008 to 18.0% in 2015—the last available year of historical data. Prior to the deal announced this week, MGI forecast a continued increase in nonperforming loans and degradation of bank balance sheets. We will update our forecasts in light of this new information over the coming weeks—stay tuned!
The week in data
Here is a selection of the week’s most market-moving data, tracked at MGI.online and posted in real time to MGI’s twitter account (@mgionline):
- Spain’s National Institute of Statistics reported its flash estimate of inflation this week. The CPI index fell to 1.5% in June, four tenths lower than May http://bit.ly/2t6LgUf
- Turkey's economic confidence index in June decreased by 1.6% compared to May, from 100.5 to 98.9 http://bit.ly/2s7Gip0
- Malta added 2,502 jobs in May, continuing a remarkable decline in unemployment since 2014 http://bit.ly/2tn6OPx. Similarly, LFS survey results released yesterday for Malta showed an increase in employment of 2.7% in 2017Q1 (YoY) http://bit.ly/2tmAI6l
- Consumer confidence index in Italy rose from 105.4 to 106.4 and business confidence from 106.2 to 106.4 in June http://bit.ly/2s0oBHD
- Spain’s Industrial Price Index rose 5.3% in May, down from 6.0% in April (on an annual basis). The monthly rise was 0.1% http://bit.ly/2skAWGe
- Elstat has published producer price indices for the services sector in Greece for the first quarter of 2017: http://bit.ly/2snDXKR
Next week will see the release of manufacturing PMIs for most Med countries on Monday and services PMIs on Wednesday. Friday will see a number of important releases for France. MGI’s complete data release schedule can be viewed at https://www.mgi.online/release-calendar/.
Monday July 3rd, 2017:
- Turkey inflation for June
- Turkey PPI for June
- June manufacturing PMI for Turkey, Spain, Italy, France, Greece, and others
- Spain consumer confidence and new car sales for June
Tuesday July 4th, 2017:
- Spain unemployment for June
- Palestinian Territories IPI for May
Wednesday July 5th, 2017:
- June services PMI for Spain, Italy, France
- France retail sales for May
Thursday July 6th, 2017:
- Greece unemployment rate for April
- Israel business confidence for June
- Malta IPI for May
Friday July 7th, 2017:
- France balance of trade for May
- France budget balance for May
- France industrial production for May
- Spain industrial production for May
- Italy retail sales for May
- Greece balance of trade for May
- Tunisia CPI for June
- Israel budget balance for June