Research Market strategy
By Swissquote Analysts
Published on 04.10.2021
Morning news

Evergrande Property Shares Halted Pending Offer for Company

Topic of the day

Evergrande Property Services Group Ltd. said it expects to announce a possible offer for the company, a move that would ease some of the financial constraints being faced by its parent China Evergrande Group. Both the companies had sought a trading halt early Monday in Hong Kong pending the release of an announcement. In a second filing midday, Evergrande Property said the announcement “constitutes an inside information and a possible general offer for the shares of the company.” Both the companies didn’t identify who the offerer was nor provided any further details. Earlier in the day, Hopson Development Holdings Ltd., one of China’s biggest property developers also sought a trading halt in Hong Kong through a separate filing. Hopson said the shares were being halted pending release of a transaction, under which it had agreed to acquire shares of a company listed on the Hong Kong stock exchange. Hopson didn’t identify the name of the target company.

Swiss stocks

After some strong daily movements in both directions during the week, the Swiss stock exchange went into the weekend on a lighter note. The SMI lost 0.6 per cent to 11,575 points. Among the 20 SMI stocks, there were 17 price losers and 3 price winners. 35.88 (Thursday: 36.49) million shares were traded. While market interest rates in the USA fell again and did not provide any relief on the stock exchanges, they weighed on the prices of bank shares. UBS lost 1.6 and Credit Suisse 1.1 percent. Still behind the bank shares were Logitech, ABB, Partners Group and Alcon from various sectors, with reductions of up to 2.5 per cent, without there being any news that would weigh on prices. The day's winners were Richemont, which also rose by 1.7 per cent without news. They were in good company with other European luxury stocks such as LVMH and Kering, which also rose significantly.

International markets


European equity markets closed lower on Friday as concerns about the economic outlook, particularly in the US and China, continued to weigh on investor sentiment at the start of the fourth quarter. The Stoxx Europe 600 index fell 0.4% to 452.9 points. In Paris, the CAC 40 finished almost stable while the SBF 120 lost 0.1%. In Frankfurt, the DAX 40 lost 0.7% and the FTSE 100 in London dropped 0.8%. DHL Express plans to raise rates for shipments for U.S. customers by an average of 5.9% starting Jan. 1, effectively matching a FedEx Corp. price increase for next year in an action that will raise costs for parcel shippers. “You have general inflation, we’ve got to cover for that,” as well as added infrastructure, such as planes, trucks and facilities, said Mike Parra, chief executive for the Americas for the unit of Deutsche Post AG. The increase announced Friday will apply to U.S. account holders shipping to or from the 220 countries and territories DHL Express serves, a spokesperson said. BMW AG raised its outlook for certain earnings metrics for the financial year 2021, predicting higher vehicle prices would outweigh the chip shortage. The German auto maker expects its Ebit margin for its automotive segment to be between 9.5% and 10.5%, up from its previous forecast of 7% to 9%. The increase was expected by analysts who, when BMW released the previous forecast in August, predicted the luxury-car maker would lift the full-year autos margin to 8%-10% when reporting results for the third quarter.

United States

U.S. stocks rose on Friday, as investors displayed a little risk appetite, thinking a new page in the calendar might push the market past the issues that drove it down earlier in the week. The Dow Jones Industrial Average-which snapped a five-quarter winning streak Thursday-rose 482.54 points, or 1.4%, to 34326.46. The S&P 500 rose 49.50 points, or 1.1%, to 4357.04 after the broad stocks index closed out its biggest monthly loss since March last year. The technology-focused Nasdaq Composite Index rose 118.12 points, or 0.8%, to 14566.70. For the week, the S&P 500 lost 2.2%, and the Nasdaq fell 3.2%, their largest drops since the week ended Feb. 26, 2021. The Dow lost 1.4%, its largest drop since the week ended Sept. 10. Merck & Co. and its partner Ridgeback Biotherapeutics LP said their experimental Covid-19 pill helped prevent high-risk people early in the course of the disease in a pivotal study from becoming seriously ill and dying, a big step toward providing the pandemic’s first easy-to-use, at-home treatment. The pill cut the risk of hospitalization or death in study subjects with mild to moderate Covid-19 by about 50%, the companies said Friday. The drug, called Molnupiravir, was performing so well in its late-stage trial that Merck and Ridgeback said they stopped enrolling subjects after discussions with the U.S. Food and Drug Administration. Software company Adobe Inc. has recruited Applied Materials Inc.’s finance chief to lead its finances, succeeding John Murphy, who announced his plans to retire earlier this year. San Jose, Calif.-based Adobe, the company behind Photoshop and other digital publishing products, said Dan Durn will begin his new role on Oct. 18. He has served as chief financial officer at chip-equipment company Applied Materials since 2017.


The news that the highly indebted Chinese real estate giant China Evergrande, which is struggling with liquidity problems, had its shares suspended from trading on Monday is causing price losses on the region's stock markets. In Tokyo, where the Nikkei index had initially risen slightly on good news from the US, it is now down 1.4 per cent at 28,373 points. In Hong Kong, the drop was 2.3 per cent.


U.S. Treasury yields edged higher early Monday after they posted their largest daily declines in months on Friday, as bond investors shrugged off data showing U.S. inflation at 30-year high.


Credit Suisse lowers Easyjet target to 927 (1.200) p – Outperform
Credit Suisse rises Diageo target to 4.200 (3.950) p – Outperform
Independent Research rises Covestro target to 66 (64) EUR –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.