Research Market strategy
By Swissquote Analysts
Published on 01.06.2021
Morning news

Generali Launches EUR1.18 Bln Offer for Italian Insurer Cattolica

Topic of the day

Assicurazioni Generali SpA has launched a 1.18 billion-euro ($1.44 billion) takeover offer for smaller peer Societa Cattolica di Assicurazione SpA in a bid to cement its position as the largest insurer in Italy. Generali said that it is offering EUR6.75 for each share in Cattolica, which corresponds to a premium of roughly 15% to the May 28 closing price. Generali is already Cattolica’s largest shareholder, with a stake of about 24%. The deal would see Generali take the top spot in the country in the non-life insurance market, while also reinforcing its position in the life segment. The deal is expected to lead to synergies of more than EUR80 million before tax per year, with integration costs of EUR150 million to EUR200 million in the next four years. If the bid is successful, Generali plans to delist Cattolica, while maintaining its brand. Generali shares rose 0.1% in European morning trade, while Cattolica gained 12%.

Swiss stocks

The Swiss stock market suffered slight losses on Monday. Participants described it as a typical day of consolidation. Business was very quiet and lacked momentum, partly because the U.S. and British stock exchanges remained closed for the vacations. Investors were also cautious after the SMI hit a record high only on Friday. The SMI lost 0.5 percent to 11,363 points. Among the 20 SMI stocks, there were 18 losers and 2 gainers. 19.66 (previously: 36.35) million shares were traded. Cyclical stocks tended to be more sought after than defensive stocks as investors bet on an economic recovery. Meanwhile, SMI stocks were little changed. Partners Group was the best performer (+0.5%), followed by Richemont (+0.3%), while defensive heavyweights Novartis and Roche were at the bottom of the pack, each down 0.9%. The third heavyweight, Nestlé, lost 0.4%. Outside the SMI, Lindt & Sprüngli rose 1.3%. The Kilchberg-based chocolate maker announced a share buyback program. The size of the program was described as high at 750 million francs of trading. Pharmaceutical supplier Siegfried fared well in a cyber attack just before Whitsun. The Zofingen-based company has started to increase its production again. The share price rose by 1.1 percent.

International markets


Europan markets drifted lower Monday, as investors considered the outlook for U.S. inflation and international economic recovery. U.S. and U.K. markets were closed Monday for public holidays, with trading subdued in Europe as a result. The global economy is set to grow at its fastest pace in almost half a century this year, boosted by aggressive vaccination programs and the U.S. government's latest fiscal stimulus package, the Organization for Economic Cooperation and Development said Monday. The Federal Reserve told Deutsche Bank AG in recent weeks that the lender is failing to address persistent shortcomings in its anti-money-laundering controls, according to people familiar with the matter. The Fed's frustration has escalated to a point that the bank could be fined, the people said. The U.K. government is accelerating its vaccination drive as officials estimate that as many as three quarters of new Covid-19 cases in the country could be the result of a coronavirus variant first identified in India. The European Union's health agency approved the Covid-19 vaccine from Pfizer Inc. and BioNTech SE for children between the ages of 12 and 15 years old, a move that will give a boost to the continent's vaccination campaign. In Europe, Germany’s DAX index slid 0.6%, dragged down by Deutsche Bank shares, which fell 1.3%. The Wall Street Journal reported Sunday that the Federal Reserve told the bank in recent weeks that it is failing to address persistent shortcomings in its anti-money-laundering controls, according to people familiar with the matter. In Spain, where inflation also rose to 2.4% in May, the IBEX index fell 0.8%. Shares of utility companies dropped over a draft bill the government is preparing that could drive down electricity prices in the country. Endesa shares closed down almost 6%. The pan-Continental Europe Stoxx 600 index closed down 0.5%.

United States

U.S. markets were closed on Monday due to public holidays.


Once again, the Asian stock markets show no uniform trend on Tuesday. While it is slightly down in Tokyo and Shanghai, the Hang Seng Index in Hong Kong is moderately up (0.4%). The Shanghai Composite is down 0.1 percent. The stock market in Tokyo registers the second trading day in a row losses, the Nikkei-225 reduces by 0.4 percent to 28,742 points. Among the individual stocks, the focus is on car stocks Toyota Motor and Honda. While Honda shares are down 0.1 percent, Toyota Motor shares are up 2.4 percent, supported by the full-year 2021 results released the previous day after the close of trading.


The 10-year Bund yield was trading at -0.168%, up 1.3 basis points, as investors awaited inflation data from Germany at 1200 GMT for any surprises versus the forecasts, even as an exit from ultra-expansive monetary policy isn't imminent from the European Central Bank, said analysts. U.S. markets were closed on Monday due to public holidays.


Wells Fargo increases Netflix target to USD 700 (510) - Overweight
Citi lowers Roche's target to CHF 285 (395) - Buy
Stifel increases Covestro's target to EUR 67 (50) - Buy

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