Research Market strategy
By Swissquote Analysts
Published on 10.03.2021
Morning news

Bouygues Sells 12 Million Alstom Shares for EUR 41.65 each

Topic of the day

The construction, media and telecoms conglomerate Bouygues announced Tuesday its intention to sell 12 million shares of rail equipment maker Alstom as part of a placement to qualified investors through an accelerated bookbuilding process. On completion of the placement, Bouygues will retain 3.12% of Alstom's share capital, compared with its current stake of 6.35%. "Bouygues has given an undertaking to the banks in charge of the placement to retain the balance of its stake in Alstom for a period of 60 days from the settlement-delivery date," the group said in a press release. The order book will be set up "immediately" and will be managed by BNP Paribas and JPMorgan, acting as global coordinators and associated bookrunners, and by BofA Securities, Crédit Agricole CIB and Société Générale, acting as associated bookrunners, Bouygues said. Bouygues sold its 12 million Alstom shares at EUR 41.65 each, according to market information. This represents a reduction of almost 4% compared to the closing price of EUR 43.07. Bouygues' share price is expected to rise, with Alstom's share price coming under some pressure at first, said one trader. The sale concerns half of Bouygues' stake, i.e. 3.12% of Alstom's shares. The book is said to have been quickly covered.

For more analysis and market information, subscribe to the Themes Trading newsletter. The Themes Trading "Global Recycling" is now online: https://www.swissquote.ch/investment-themes-webapp/IThemeDetail.action?…

Swiss stocks

After the strong gain at the beginning of the week, there was some minor profit-taking on the Swiss stock market on Tuesday. However, a clearly positive opening of the US stock markets gave the broad market a tailwind in the afternoon. The SMI gained 0.3 per cent to 10,858 points. Among the 20 SMI stocks, there were twelve gainers and eight losers. 44.23 (previously: 46.97) million shares were traded. Interest rate-sensitive financial stocks were particularly affected by declines after bond yields came back somewhat from their recent highs. The shares of the two banks CS Group and UBS fell by 0.1 and 1.8 per cent respectively. The share prices of insurers Swiss Life, Swiss Re and Zurich fell between 0.2 and 0.6 per cent. In the pharmaceutical sector, Novartis lost 0.8 per cent. A drug candidate of the company had missed the target in a study. Roche, on the other hand, improved by 0.9 per cent. Defensive SMI heavyweight Nestle ended the day 1 per cent higher. Technology stocks were in demand, especially as the sector also recovered strongly in the USA from the previous day's sell-off. Ams rose 2.8 per cent and Logitech 6.0 per cent. Among the second-line stocks, Dufry gained 3.3 per cent despite weak business figures. Here, investors were probably betting that the business of the duty-free shop operator would pick up again with the end of the lockdowns. Stadler Rail posted a plus of 2.3 per cent. The rail vehicle manufacturer, together with the French Alstom, received a multi-billion euro order from the Spanish railway company Renfe, as had already been announced on Monday evening.

International markets

Europe

European equity markets finished higher on Tuesday, taking advantage of the continued lull in the bond markets and in the hope of a rapid adoption of the stimulus plan proposed by US President Joe Biden. The Stoxx Europe 600 index rose by 0.8% to 420.4 points. In Paris, the CAC 40 and the SBF 120 appreciated by 0.4%. In Frankfurt, the DAX 30 also gained 0.4%, setting a new record at 14,437.9 points, while the FTSE 100 in London gained 0.2%. Continental's share price fell by 8%. Continental scared investors with a cautious outlook for the whole year after another high loss and lack of dividends. One of the big winners on the DAX was once again Deutsche Post. The share price rose by 3.0%. Among other things, the logistics company now wants to increase its operating profit to more than 6 billion euros by 2023. Vodafone in London increased by 1.3 per cent. Vodafone and its European mobile phone mast company Vantage Towers have set a price range of 22.50 to 29.00 euros per share for its stock market debut. JDE Peet's shares fell by 8% on the Amsterdam stock exchange. The Dutch coffee and tea manufacturer recorded a net profit of 308 million euros in 2020, in line with forecasts.

United States

The New York Stock Exchange finished higher on Tuesday thanks to a recovery in technology stocks and the easing of bond rates. The Dow Jones Industrial Average (DJIA) rose 0.1% to 31,832.74 points, but fell at the end of the session due to the decline in Disney shares. The S&P 500 expanded index rose by 1.4% to 3,875.44 points and the Nasdaq Composite jumped by 3.7% to 13,073.82 points. On Monday, the Nasdaq 100 and Nasdaq Composite indices fell into correction territory after losing more than 10% from their recent highs. The semiconductor sector fuelled the rebound in technology stocks, led by Nvidia (+8%) and AMD (+6.2%). Intel also gained 4.7%. Disney sold off 3.5%, suffering profit-taking after its gain of more than 6% the day before. The Disney+ online video service launched in November 2019 has surpassed the threshold of 100 million subscribers worldwide, Walt Disney CEO Bob Chapek announced Tuesday during the annual general meeting of shareholders. The founder of Zoom Video Communications (+10%), Eric Yuan, transferred about 40% of his stake in the video conferencing tools publisher, whose share price more than tripled last year. Tesla (+20%) rebounded after a 6% drop the day before. The stock had lost ground over the last five sessions. GameStop (+27%) continued to rise after its 40% surge on Monday. On the other hand, the specialists of electronic payments are on the rise: PayPal gained 7% and Square took off by 12%.

Asia

Despite good news from Wall Street in the form of a massive recovery in share prices in the technology sector, the stock markets in East Asia were mixed in the middle of the week. The Nikkei index in Tokyo is just below 28,986 points, with the Kospi recording larger losses. In Shanghai, the market barometer recovered from the heavy losses since the beginning of the week, but only slightly by 0.3 per cent.

Bonds

The US Treasury bond yield eased by 5 basis points on Tuesday to 1.546%. The benchmark yield ended Monday's session at 1.599%, its highest level in more than a year. At the beginning of the year, the 10-year yield had hit a low of 0.915%.

Analysis

LBBW raises OMV target to EUR 47 (41) - Buy
DZ raises Dt. Post target to EUR 54 (52) - Buy
NordLB raises Prosiebensat1 target to EUR 21 (14) – Buy

Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.