Research Market strategy
By Swissquote Analysts
Published on 19.07.2021
Morning news

Zoom to Buy Five9 in All-Stock Deal Valued at $14.7 Billion

Topic of the day

Zoom Video Communications Inc., the videoconferencing service that became a household name globally during the pandemic, plans to parlay some of the resulting rise in its share price into a $14.7 billion acquisition to secure growth. The all-stock deal for Five9 Inc., a provider of cloud-based customer-service software, will help Zoom expand its potential offerings for business and enterprise clients. The growth opportunity will allow Zoom to tap into a $24 billion contact-center market, the company said Sunday. Zoom, which started trading in the public markets in 2019, has been one of the biggest beneficiaries from the shift to remote work and distance schooling. The value of the company’s shares has more than tripled since widespread lockdowns took hold in the U.S. and elsewhere more than a year ago. Zoom Chief Executive Eric Yuan said the deal for Five9 would help support the company’s Zoom Phone business, which replaces office telephone systems with a cloud-based service. Other competitors in the sector include Amazon. com Inc.’s cloud division, Genesys Telecommunications Laboratories Inc., and NICE inContact. As part of the agreement, Five9 stockholders will receive 0.5533 shares of Class A common stock of Zoom for each share of Five9 Inc. Zoom’s shares are up more than 46% over the past year, fueled by increased user numbers since the pandemic hit.

Swiss stocks

After a small closing rally, the Swiss stock market approached the weekend on a firmer level. Support came from gains of up to 1.1 percent in Nestle, Roche and Novartis, which are considered to be less cyclical index heavyweights. The SMI gained 0.4 percent to 12,027 points. Among the 20 SMI stocks, there were ten price gainers and nine losers, Geberit closed unchanged. 32.04 (Thursday: 28.06) million shares were traded. One of the main topics on Friday were the sales figures of Richemont. The luxury products maker posted a jump in sales in its fiscal first quarter, driven by jewelry and watch sales. Sales rose 129 percent to 4.4 billion euros, beating analysts' expectations. Apparently this was not good enough for investors, and the stock exited the day down 0.9 percent. Down at the end were Swatch (-5.2%). After the share had been driven up during the week by good figures from the watch manufacturer, profit-taking may have played a role here. The weekly balance of Swatch was thus slightly negative. The day's winners were Partners Group (+1.8% to 1,461 francs). The company had reported an increase in assets under management in the first half of the year from 109.1 to 118.9 billion dollars and thus exceeded analysts' estimates. Credit Suisse raised its price target from 1,450 to 1,530 francs and reiterated its buy recommendation.

International markets


European stocks lost ground on Friday, as investors kept watch on the fast spreading delta variant of the coronavirus that causes Covid-19, and absorbed a fresh batch of earnings. The Stoxx Europe 600 index lost 0.3% to 454.7 points, giving up just over 0.1% for the week. In Paris, the CAC 40 gave up 0.5% on Friday while the SBF 120 was down 0.4%. In Frankfurt, the DAX 30 dropped 0.6%, while in London, the FTSE 100 finished down 0.1%. In Germany, Chancellor Angela Merkel has pledged rapid help for disastrous flooding that has killed more than 90 and left hundreds missing in the western part of the country, as persistent rains have left rivers and reservoirs overflowing. From the luxury-goods sector, shares of Burberry fell over 5%. The U.K. luxury-goods group reported a 90% rise in comparative store sales and a 26% rise in full-price comparable sales for the 13 weeks ended June 26, both compared with the year-ago period, driven by a strong rebound from the pandemic. "A big obstacle waiting to trip up the company on this catwalk of recovery is the departure of CEO Marco Gobbetti. Shares of Ericsson dropped 8,5% in Stockholm. The telecommunications-equipment company announced an $8.3 billion multiyear 5G deal with Verizon Communications and posted a forecast-beating second-quarter net profit that beat expectations, but reported weaker sales in China. Ericsson previously warned that Sweden's ban on certain Chinese gear could result in some retaliation, and said it is now "prudent to forecast a materially lower market share in mainland China for networks and digital services.“ Rio Tinto said it shipped 12% less iron ore from its Australian mining hub in the second quarter of 2021 versus a year earlier, and that it expects annual exports to be at the low end of an earlier estimate, following above-average rainfall, operational shutdowns and COVID-19-fueled labor shortages. Shares of the world's second-biggest miner fell 3.4%.

United States

U.S. stocks fell and snapped a three-week winning streak as data showed that consumer sentiment dwindled in early July, driven in part by concerns of high inflation. The S&P 500 lost 32.87 points, or 0.8%, to 4327.16. The Dow Jones Industrial Average retreated 299.17 points, or 0.9%, to 34687.85, with losses accelerating later in the trading session. The Nasdaq Composite lost 115.90 points, or 0.8%, to 14427.24. All three major indexes notched weekly losses. The S&P 500 and Dow shed 1% and 0.5%, respectively. The Nasdaq fell 1.9%. Concerns about the Delta variant have flared up lately, weighing on shares of airlines and cruise operators on Friday and making them among the S&P 500’s worst performers. Carnival shares lost $1.03, or 4.7%, to $20.92. Alaska Air shed $2.29, or 4%, to $54.62. The American semiconductor manufacturer Intel (-1.5%) is studying the possibility of buying GlobalFoundries, said people close to the case. The deal would be Intel's largest-ever acquisition, and it would use the opportunity to advance its plans to make more chips for other technology companies. A deal could value GlobalFoundries at about $30 billion, the sources said. Moderna shares jumped 10.3% after S&P Global said it would add the pharmaceutical company to the S&P 500 index, effective as of July 21. U.S.-listed Chinese ride-hailing firm Didi Global fell 3.2% after state security and police officials were sent to the company’s offices Friday as part of a cybersecurity investigation.


At the start of the new week, negative signs predominate on the stock exchanges in East Asia. The firmer yen dampens the mood on the Tokyo Stock Exchange, where the Nikkei 225 index falls by 1.4 percent to 27,607 points. Investors are looking with concern at the Corona pandemic spreading again, especially as the Olympic Games begin in Japan this week. Comparatively well fares the stock market in Shanghai, where the Composite Index is down 0.3 percent. In Hong Kong, however, the Hang Seng Index loses 1.6 percent. The South Korean benchmark index Kospi decreases by 1.0 percent. Across the region, shares in the oil sector are under pressure after the group of Opec+ countries agreed on an increase in production volumes over the weekend, causing oil prices to fall.


Yields for U.S. government debt on Friday rose slightly, but long-dated bond yields rang up a third straight weekly drop after Federal Reserve Chairman Jerome this week reiterated the central bank’s view that rising inflation is likely to be transitory and that tapering of asset-purchases, including government debt, isn’t imminent. The 10-year Treasury note yields 1.30%, compared with 1.29% on Thursday.


NordLB lowers target Siemens Energy to EUR 24 (29) - Hold
DZ Bank increases Hellofresh target to EUR 80 (74) - Hold
Stifel raises Boss target to EUR 50 (34) - Hold

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