Research Market strategy
By Swissquote Analysts
Published on 30.03.2021
Morning news

Amazon-Backed Deliveroo to Price IPO at Lower End of Range

Topic of the day

Deliveroo, the Amazon-backed online food-delivery service, said it would price its initial public offering at the lower end of expectations, signaling a more cautious stance even as demand has surged during the pandemic. The U.K.-based company said Monday it intends to price its shares between £3.90 and £4.10, suggesting a valuation of between £7.56 billion and £7.95 billion, equivalent to about $10.5 billion and $11 billion. It had previously said they could sell for as much as £4.60. The stock is set to start trading in London on Wednesday under the ticker ROO. The company said it had received significant demand for the offering but that “given volatile global market conditions for IPOs,” selling shares at the lower end of its initial range would offer better long-term value for investors. Deliveroo’s IPO is the latest test of investors’ appetite for a highly competitive industry but one that has benefited from more in-home ordering during the pandemic. U.S. peer DoorDash Inc. went public in December in New York.

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Swiss stocks

The SMI closed down 0.2 percent on 11,090 points Monday. Credit Suisse (CS) crashed 13.8 percent after warning of potential losses because a US-based hedge fund had defaulted on margin calls made by Credit Suisse and other banks, and the banks were now exiting these positions. Though it was too early to quantify the loss exactly, it could be “highly significant” for first quarter results, CS said. While CS did not name the US customer, people familiar with the matter pointed to hedge fund Archegos Capital Management. USB fell 3.9 percent and asset manager Partners Group slid 1.7 percent in CS’s wake. Defensive heavyweight Nestle buoyed the index, rising 1.0 percent. Insurers also saw gains, with Swiss Re up 0.6 percent, Zurich Insurance up 0.8 percent, and Swiss Life up 0.1 percent. SGS was the day’s winner, rising 1.4 percent. On the losing side, ABB was down 2.9 percent and Givaudan 0.6 percent. However, both were trading ex dividend by CHF 0.80 and CHF 64 per share respectively.

International markets


European shares closed mostly higher as investors shrug off concerns about a fire-sale of stocks from a large investor. The Stoxx Europe 600 rises 0.2%, the CAC-40 gains 0.4% while the DAX climbs 0.5%, though the FTSE 100 drops 0.07%. Still, shares in banks and financial stocks are lower after losses at Archegos Capital Management triggered liquidation of positions. Masmovil Ibercom SA has made an all-share takeover offer for rival telecommunications operator Euskaltel SA, a bid supported by majority shareholders in the target company, according to a filing to the Spanish capital-markets authority Sunday. The takeover bid is worth 2 billion euros ($2.36 billion), equating to EUR11.17 for every Euskaltel share, according to the filing. The sum would be paid in cash, with Masmovil already holding the necessary cash and credit to cover the bid, the filing says. The two companies have been in contact regarding a bid since March 15, and the bid is considered friendly, according to the filing. Alstom SA said Monday that it has won a contract to provide Spanish national railway operator Renfe with 152 trains. Under the contract, worth more than 1.4 billion euros ($1.65 billion), the French train maker will also maintain 56 of the trains for a period of 15 years, and will also supply parts for the fleet. The more than 900-passenger-capacity vehicles will come from Alstom's X'Trapolis range of suburban commuter trains, the company said.

United States

U.S. stocks wobbled, pressured by declines in shares of banks and energy producers. The Dow Jones Industrial Average rose 0.3% as of the 4 p.m. close of trading in New York. The S&P 500 slipped 0.1%, and the Nasdaq Composite fell 0.6%. Financial stocks led declines after a large investment fund last week unwound billions of dollars in holdings, triggering concern that global banks that dealt with the firm could face sharp losses. Credit Suisse and Nomura Holdings said that they could incur substantial losses from dealings with a U.S. client. Neither bank named its respective client, but people familiar with the matter have identified the fund as former Tiger Asia manager Bill Hwang's Archegos Capital Management, which sold $30 billion in holdings last week. American Airlines Group Inc. said Monday it expects its first-quarter system capacity, or total available seat miles, to be down about 40% to 45% versus the first quarter 2019. The airline company said in a U.S. Securities and Exchange Commission filing that this compares with its previous guidance of down 45% versus the first quarter 2019. Shares were up 1.4%, to $23.25, in premarket trading. American Airlines said it would continue to adjust its fleet and capacity plans based on anticipated levels of demand. The company said it currently expects to reactivate most of its aircraft in the second quarter to meet anticipated levels of demand. Shares of Twitter Inc. are up 2.1% in Monday morning trading after Truist Securities analyst Youssef Squali upgraded the stock to buy from hold and raised his price target to $74 from $64. Squali points to "tangible progress on product and tech platform improvements in the last 12 months" that have led to accelerating user growth on a year-over-year basis and the fastest year-over-year revenue growth in over two years during the fourth quarter. "Improvements to its technology platform have led to a ramp in product development velocity, which drove faster product introduction, the main underlying catalyst to the recent improvements in engagement metrics, in our view," he wrote.


The problems of the US hedge fund Archegos Capital were well absorbed on the Asian stock markets on Tuesday - the majority of the indices were friendly to firm. Even a renewed rise in bond yields in the USA did not dampen the good mood.


Treasury yields added to Monday's gains in Asia as investors eyed the all-important employment report at the end of the week, which could underline the U.S. economy's strength as vaccination rates accelerate. The yield on 10-year U.S. Treasury bonds rose 2.9 basis points to 1.72 percent at the start of the week.


JPM rises the Allianz target to 228 (224) EUR – Overweight
UBS rises the Porsche target to 120 (76) EUR – Buy
UBS lowers the K+S to 8,30 (10,10) EUR – Neutral

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