Vivendi Agrees to Sell 10% of Universal to William Ackman
Topic of the day
Vivendi SE on Sunday reached an agreement for a 10% investment in Universal Music Group by William Ackman’s Pershing Square Tontine Holdings, valuing the world’s largest music company at about $40 billion. In an email to UMG employees, CEO Lucian Grainge called the investment a “strong validation.” The deal - previously reported on by The Wall Street Journa - follows a 20% stake investment by Chinese internet giant Tencent and comes days before Vivendi shareholders will vote on the potential listing of 60% of UMG shares on the Euronext Amsterdam stock exchange. “The fact that we now have, in addition to Vivendi, two committed investor - the consortium led by Tencent, as well as PST - is as powerful an endorsement as one could imagine from the investment and technology communities,” said Mr. Grainge.
The Swiss stock market ended the last trading day of the week with losses. After the SMI initially marked a new record high of 12,072 points in early trading, it gave up the gains completely in the further course and turned into the minus. Traders referred to the statements of James Bullard. The President of the Federal Reserve Bank of St. Louis assumes that the U.S. Federal Reserve will make its first interest rate hike as early as 2022. He thus forecast an earlier interest rate step than the recently revised projections of the Fed suggested. This had brought forward the expected date of its first rate hike to 2023 following its interest rate meeting on Wednesday. The SMI was down 0.6 percent to 11,941 points. Among the 20 SMI stocks, there were 17 losers and three gainers. Turnover shot up to 136.59 (previously: 46.27) million shares in the wake of the big drop. Financial stocks were the laggards in the SMI. Here, UBS, Credit Suisse and Zurich Insurance were down between 1.4 and 2.1 percent. The shares of luxury goods manufacturers Swatch (-1.0%) and Richemont (-2.3%) are also down more significantly.
European stocks dipped on Friday as investors continued to absorb a hawkish turn by the Federal Reserve. The pan-continental Stoxx Europe 600 dropped 1.5%. Banks and energy companies led the decliners. On the data front, U.K. retail sales fell 1.4% in May, driven by decreases at food stores and on the heels of a sharp rise in the previous month, the Office for National Statistics said Friday. Shares of Tesco fell more than 2%, after the British grocer reported a 1% rise in retail sales 1% on the year on a comparable basis and said that its profit outlook for the full year remains unchanged. "Tesco's first quarter numbers look sluggish, but that's because they're lapping the unprecedented demand triggered by the pandemic this time last year," said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, in a note to clients. As reflation trades unwound, bank stocks came under pressure, with HSBC down 0.4% and BNP Paribas slumping 2.3%. Energy stocks fell as TotalEnergies and BP each lost close to 1%, while Royal Dutch Shell was 1.3% down. Shares of Kerry Group surged 3% after the Ireland based food company said late Thursday that it will sell its consumer foods' meats and meals business in the U.K. and Ireland to Pilgrim's Pride for 819 million euros ($975.1 million).
U.S. stocks retreated Friday, as traders warily eyed the Federal Reserve for hints of where monetary policy is headed. The Dow Jones Industrial Average had its worst week since the week ended Oct. 30. The index of blue-chip stocks on Friday fell 1.6%, or 533.37 points, to 33290.08. For the week, it lost 3.45%. The S&P 500 declined 1.3%, or 55.41 points, to 4166.45 on Friday, losing 1.9% on the week. That broke a three-week streak of gains. The Nasdaq Composite lost 0.9%, or 130.97 points, to 14030.38, as large technology stocks also fell. For the week, it was down 0.3%. Policy makers had signaled Wednesday that they expect to raise interest rates by late 2023, sooner than they had previously anticipated. Sentiment waned again on Friday after Federal Reserve Bank of St. Louis leader James Bullard said on CNBC that he expects the first rate increase even sooner, in late 2022. Traders said that a rush of options activity amplified the market’s slide. All 11 of the S&P 500’s sectors fell Friday, with energy, financials and utilities all down more than 2%. Consumer staples, materials, and real estate all fell 1.5% or more. Surprisingly good figures helped Adobe to a plus of 2.6 percent. In addition, the profit outlook was above expectations. Smith & Wesson (+17.2%) also reported better-than-expected figures while announcing a share buyback. Fox Corp (+1.3%) also plans to buy back shares. The company's board gave its approval for this on Thursday. Shares of Berlin-based biotech Atai Life Sciences traded on the Nasdaq for the first time Friday, making a stellar debut. The first price was $21, 40 percent above the issue price of $15. At the end of trading, the shares were trading at 19.45 dollars.
In East Asia, the indices follow the weak guidance from Wall Street: the Nikkei index loses 3.45 percent to 27,966 points, but had also already been down 4 percent. Shanghai holds up best, where the Composite index can hold its ground with a minus of 0.22 percent. The Kospi falls 1.15%, while the Hang Seng loses 1.35%. HSBC is down 3.5 percent in Hong Kong. The bank has announced a total loss of $3 billion from its exit from French retail banking.
Long-dated U.S. Treasury yields receded Friday, but the short-term 2-year Treasury booked the sharpest weekly rise in nearly 2 years, compressing the yield curve. The yield on the 10-year Treasury note fell to 1.449% Friday, down from 1.509% Thursday. The 10-year yield has fallen for five straight weeks.
LBBW raises BBVA target to EUR 5.80 (4.80) - Hold
BoA raises target Glaxosmithkline to 1,489 (1,356) p - Neutral
DZ Bank lowers Varta to Hold (Buy) - Target EUR 145 (130)
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.