Research Market strategy
By Swissquote Analysts
Published on 09.03.2021
Morning news

Dupont Buys Laird Performance Materials for $2.3 Billion

Topic of the day

Chemical company Dupont de Nemours is buying heat transfer components supplier Laird Performance Materials from Advent International for US$2.3 billion. Dupont said on Monday that it expects the acquisition to be completed in the third quarter. By the end of 2024, the Wilmington, Delaware-based company expects cost synergies of $60 million before taxes. Laird, which has more than 4,300 employees and 11 manufacturing sites around the world, turned over $465 million last year. Dupont also said it had approved a $1.5 billion share buyback programme that will run until 30 June 2022.

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Swiss stocks

Swiss shares made significant gains on Monday. The adoption of the 1.9 trillion dollar US economic stimulus package had a supportive effect. The financial sector received a tailwind from a renewed rise in bond yields. The SMI gained 2.1 per cent to 10,830 points. All 20 SMI stocks closed higher. 46.94 (previously: 45.38) million shares were traded. The SMI was led by ABB, which gained 4.5 per cent. Among the other cyclicals, Geberit rose by 2.6 per cent, Lafargeholcim by 2.8 per cent and Sika by 2.4 per cent. Shares in luxury goods manufacturers Richemont (+3.3 per cent) and Swatch (+3.8 per cent) were also sought after. They benefited from the easing or even lifting of shop closures and travel restrictions imposed to contain the Corona pandemic. In the financial sector, shares of banks Credit Suisse and UBS improved by 1.9 and 3.1 per cent respectively. Among insurers, Swiss Life, Swiss Re and Zurich posted gains of between 2.3 and 3.2 per cent. Among pharmaceutical stocks, Roche (+1.7 per cent) was unimpressed by the company's initial withdrawal from the US market of its cancer drug Tecentriq for the treatment of metastatic bladder cancer previously treated with platinum. Novartis climbed 2.6 per cent. Nestle, considered a defensive index heavyweight, lagged the market with a gain of 0.8 per cent.

International markets

Europe

European equity markets closed sharply higher on Monday, buoyed by the US Senate's adoption of President Joe Biden's $1.9 trillion stimulus package and announcements of easing health restrictions in several European countries. The Stoxx Europe 600 index gained 2.1% to 417.3 points. In Paris, the CAC 40 and the SBF 120 were up 2.1% and 2%, respectively. In Frankfurt, the DAX 30 rose 3.3%, while the FTSE 100 in London gained 1.3%. The stocks most sensitive to economic growth expectations rebounded strongly on Monday, in particular the commercial real estate companies Unibail-Rodamco-Westfield (+8.3%) and Klépierre (+7.6%), Saint-Gobain (+4.6%), Société Générale (+4.7%) and cable manufacturer Nexans (+5.1%). In London, the cruise ship Carnival won 8.2%, while the British government unveiled a timetable for the gradual lifting of all health restrictions by June 21, subject to certain conditions. Bavarian Nordic's shares rose by 9.9% in Copenhagen. The grant welcomed the pre-clinical studies of Covid 19's ABNCoV2 vaccine candidate. The first human trials of the vaccine are expected to begin shortly at the Radhoud University Medical Centre in the Netherlands, the company said. The company said the latest data confirm a strong immune response and protective efficacy of the vaccine following infection with the SARS CoV-2.

United States

The New York Stock Exchange finished in scattered order on Monday, shaken by the new rise in interest rates on the bond market, which supports financial stocks but weighs on the technology compartment. The Dow Jones Industrial Average (DJIA) ended on a gain of 1%, at 31,802 points, driven by the rise of Walt Disney shares after the relaxation of health measures for amusement parks in California. On the other hand, the S&P 500 expanded index lost 0.6% to 3,821 points and the Nasdaq, rich in technology stocks, closed down 2.4% to 12,609 points. Goldman Sachs (+2%) was one of the best performers in the Dow Jones index, while the improvement in the economic situation and the rise in interest rates should benefit the banks' credit activities. The Visa and American Express credit card specialists also rose by more than 2%. The American industrial conglomerate General Electric (+3.4%) is in the process of completing a transaction of more than 30 billion dollars that would bring together its division specialised in aircraft leasing. The retirement savings specialist Athene Holding (+4.3%) announced Monday an agreement to be bought by the private equity firm Apollo Global Management (-4.22%) for about 11 billion dollars. US IT security software publisher McAfee (+12.7%) announced Monday it has reached an agreement to sell its enterprise software business to a consortium led by Symphony Technology Group for $4 billion in cash.

Asia

The stock markets in East Asia were friendly on Tuesday. In early trading, the Shanghai Composite again showed a large loss of up to 2.7 per cent before, according to market participants, government-backed funds came to the market with purchases and thus pulled the index back up, to a slightly weaker close. Besides Shanghai, only the Kospi in Seoul is down slightly. Meanwhile, in Hong Kong, the intervention of sovereign wealth funds lifted the HSI (+1.0%) from negative territory to the top. The Nikkei index in Tokyo gains 0.9 per cent to 29,007 points.

Bonds

Buoyed by an improved economic outlook and expectations of rising inflation, the interest rate on 10-year US government bonds rose by 4 basis points to 1.596%, after briefly exceeding the 1.6% threshold.

Analysis

LBBW raises Krones target to EUR 76 (70) - Buy
Berenberg lowers Astrazeneca target to GBP 9,500 (10,000) - Buy
Citi lowers LSE target to GBP 85 (102) – Neutral

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