February stock market: luxury and mergers in the spotlight

In February, major global stock indices recorded predominantly positive performances. Specifically, the Italian market saw the FTSE MIB rise by 5.3%, while the Stoxx Europe 600 gained 2.8%. Conversely, in the United States, the S&P 600 closed down 0.4% and the Nasdaq declined by 0.5%, both in local currency (total return).

At the time of writing, we are in the midst of the reporting season, when companies disclose their annual results and provide forward guidance for 2025. At the sector level, the strong rebound in the luxury sector since the beginning of the year can be attributed to two factors. Firstly, short covering: in 2024, many funds bet on an underperformance of the sector, profiting from short positions. With the start of 2025, in order to close these positions, they began buying stocks, contributing to their recovery. Secondly, some sector players, such as Richemont and Burberry, reported better-than-expected quarterly results, fueling hopes for a stronger 2025 compared to the previous year. A critical test for these expectations will be the data from the Chinese New Year, which took place in the first two weeks of February. A true recovery in the luxury sector heavily depends on a return to growth in China, a key market for the industry.

Another major theme is banking consolidation, enriched by new dynamics. In addition to the ongoing negotiations between Commerzbank and Banco BPM, UniCredit recently disclosed that it holds a stake of more than 5% in Assicurazioni Generali, which CEO Andrea Orcel described as a financial investment. This stake was likely accumulated after Monte dei Paschi made an all-share offer to acquire Mediobanca, the historical holder of a 13% stake in Generali. Additionally, at the beginning of the month, BPER launched an all-stock takeover bid for Banca Popolare di Sondrio (BPSO), but the offer was promptly rejected by the target bank, which deemed it not reflective of its true standalone value. The evolution of this situation will require close monitoring, especially given BPSO’s fragmented shareholder base. BPER has sought to address this by setting a minimum acceptance threshold of 35% plus one share for the deal to succeed.

The telecommunications sector is also expected to undergo consolidation processes. Years of fierce competition have led to a continuous price war in telecom services, a trend now acknowledged by the European regulator. The latter appears to have adopted a more favorable stance toward mergers, encouraging rather than blocking them.

Meanwhile, consolidation has also affected the energy services sector. Saipem and Subsea7 announced a merger of equals, creating a new entity named Saipem7, with the aim of becoming a global leader in the industry. The combination of their fleets and geographical reach strengthens Saipem’s ongoing restructuring strategy and enhances its credibility in the eyes of international investors.

Finally, in recent weeks, Ferrari Group, a company specializing in B2B logistics for luxury goods such as watches and jewelry, went public. A key feature of its business model is that its revenue is linked to both the weight and the economic value of the transported goods. This makes the company relatively more resilient to potential economic slowdowns, as its core business is transportation rather than end-customer sales. Additionally, during periods of macroeconomic uncertainty, hard luxury brands tend to showcase their collections in as many locations as possible, increasing demand for Ferrari Group’s transportation services. The company chose to list on the Dutch market, which offers greater liquidity and international investor participation—highlighting the challenges that Italian mid and small caps often face on the domestic stock exchange.

Commentary by Massimo Trabattoni, Head of Italian Equity