Market Summary 18.11.2019
Everything you need to know about the offer SIX made to acquire the Spanish stock exchange, BME. Plus, a look at global markets.
UBS says Euronext may struggle to beat SIX’s offer for BME
Euronext would have a difficult time improving on SIX’s all-cash offer for Spain’s BME, says Michael Werner, senior equity analyst at UBS. Not only would the exchange operator have a hard time maintaining its investment grade credit rating if it proposed a similar all-cash deal, but it would also have a hard time matching the terms of the SIX offer. “SIX does set quite a high bar both with regard to the price and the considerations they are willing to grant BME,” Werner says.
Flexibility seen as the key in bidding war for BME
SIX Group has more room to negotiate than Euronext in its offer for Spanish stock exchange operator BME, giving it an advantage in a potential bidding war with its bigger rival, argues Alastair McCaig, director at Fern Wealth.
SIX CEO: Spanish bourse bid unrelated to Swiss-EU equivalency dispute
SIX chief executive Jos Dijsselhof says the company’s move to buy Spanish stock exchange operator Bolsas y Mercados Españoles would increase its foothold in Europe but was not influenced by Switzerland’s recent loss of access rights to the EU stock markets.
The SNB’s role in financing oil, gas, and coal projects
The European Investment Bank has agreed to end its financing of oil, gas, and coal projects after 2021 calling it a “quantum leap.” The Swiss National Bank takes another approach, as economist and energy expert Cornelia Meyer explains. In her view, it is not the SNB’s job to take stewardship over the environment nor is it within its mandate.
Swiss company taps into U.S. appetite for risk
Quotient, a Swiss company specializing in lab-in-a-chip technology, raised USD 90 million in a Nasdaq-listed share sale this month, bringing its market value to about USD 650 million. Cashing in on growing demand for blood tests as it prepares to go to market, the company “needed to have access to deep pockets of capital,” CEO Franz Walt says.
Calling time on negative interest rates
Swiss consumers have weathered the negative interest rate environment with some resilience, but for how long remains to be seen, says Esty Dwek, head of global market strategy at Natixis Investment Managers. She calls for rates to move back to zero, although such a move by the Swiss National Bank would not happen before a tightening by the ECB—and unlikely for the time being.
Surprise growth from Switzerland’s biggest trading partner
Germany avoided a recession in the third quarter, even growing 0.1 percent, but it’s still too early for Switzerland to celebrate. The danger of a downturn hasn’t disappeared, says Frank Häusler, chief strategist at Vontobel Asset Management. For Switzerland, it’s of “paramount importance” that Germany’s manufacturing slump does not spill over into the larger services sector in the months to come.
Why it’s time to hitch a ride with “fellow travelers” gold and crypto
Gold-backed cryptocurrencies have been making a comeback, with more companies and government mints launching digital tokens backed by the precious metal. Gold investor John Hathaway says the move will make the commodity more transactional than it is today, and also explains why the precious metal and crypto make good “fellow travelers.”
Alibaba heads for Hong Kong to court mainland Chinese investors
Online retailer Alibaba plans to raise about USD 13 billion through a share sale in Hong Kong this month, giving the Asian financial capital a vote of confidence after months of sometimes violent protests. Catherine Yeung, investment director of equities at Fidelity International, said the listing will also give mainland investors access to China’s most valuable company by market capitalization.