Italy - Factors to watch on Dec. 19

Wed Dec 19, 2012 2:36am EST

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 (*).

ITALIAN POLITICS

Silvio Berlusconi's party threatened to delay the approval of Italy's 2013 budget law on Tuesday, a move that could push back Prime Minister Mario Monti's resignation and perhaps slightly delay the parliamentary election, now expected in February.

Former prime minister Silvio Berlusconi said on Tuesday Italy would be forced to leave the euro zone unless the European Central Bank gets more powers to ensure lower borrowing costs.

Political risks ranging from turmoil in Italy to potential impediments to euro area reform could hamper the world economy next year, the bank lobby group Institute of International Finance said on Tuesday.

* Outgoing Prime Minister Mario Monti is expected to endorse a coalition of centrist political parties at the weekend, Italian daily La Stampa said without quoting sources.

RATING AGENCIES

Officials from the European Securities and Markets Authority (ESMA) have received documents from Italian prosecutors investigating credit rating agencies, judicial sources told Reuters on Tuesday.

GENERALI

Moody's on Tuesday placed the Baa2 senior debt rating, the Baa3 subordinated debt rating and the Ba1 preferred stock debt ratings of the Italian insurer on review for downgrade. The Baa1 insurance financial strength rating at Assicurazioni Generali SpA was unaffected by the announcement.

Unicredit Chief Executive Federico Ghizzoni said on Tuesday he is comfortable with the sale of the Bank of Italy's stake in Assicurazioni Generali to state-backed fund Fondo Strategico Italiano (FSI).

ERG

Italy's ERG said on Wednesday it will invest about 500 million euros ($660.65 million) in the period 2013-2015 as it presses ahead with its transformation from a refiner to a renewable energy company.

FINMECCANICA,

The board of Finmeccanica is expected to discuss asset sales at a board meeting later on Wednesday. Italian newspaper says no decision will be taken at this board meeting on the sale of unit AnsaldoEnergia, for which Siemens, Doosan and the Italian state-backed strategic fund FSI have expressed an interest.

The main owner of Italy's Avio said on Tuesday that the group which buys the aerospace supplier will need to provide guarantees on growth opportunities and jobs.

Sources told Reuters on Tuesday General Electric is set to clinch a deal to buy Avio, in which Italian defense group Finmeccanica has a 14 percent stake.

* Il Messaggero says Avio's main owner Cinven is to announce on Wednesday the sale of Avio to General Electric.

DERIVATIVES

An Italian court is expected to rule on Wednesday on whether Deutsche Bank, JP Morgan, UBS and Depfa Bank banks missold derivatives to the city of Milan in a case seen as a litmus test for hundreds of local governments facing big losses from complex financial contracts. [ID: nL5E8NHDS9]

RCS MEDIAGROUP

Italian publisher RCS MediaGroup is expected to unveil cost cuts and an overhaul of its magazines on Wednesday, as time runs out to decide on a much-needed cash call.

PIRELLI, CAMFIN

The board of Pirelli holding GPI decided on Tuesday to start an arbitration process against the Malacalza family, the second-largest shareholder in the company, to verify whether it has violated shareholder pacts.

The Malacalza family has requested a Milan court to seize a 13.2 percent stake in Pirelli's holding company Camfin , a stake that is equivalent to the family's investment in GPI. GPI opposes the move.

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