Research Market strategy
By Swissquote Analysts
Published on 10.05.2022
Morning news

Philip Morris International in Talks to Buy European Smokeless-Tobacco Rival

Topic of the day

Philip Morris International Inc. is in advanced talks to acquire Swedish Match AB, according to people familiar with the matter, in a deal that could be valued at roughly $15 billion or more and bolster the tobacco giant’s exposure to the rapidly growing market for smoke-free brands. The talks between U.S.-based Philip Morris and Stockholm-based Swedish Match could yield a deal as soon as this week, the people said, cautioning that the talks could still fall apart. The potential terms and contours of any deal couldn’t be learned. The companies confirmed the talks in separate statements after The Wall Street Journal reported on the potential deal Monday morning. A deal would be substantial, as Swedish Match is currently valued at about 117 billion Swedish krona, or almost $12 billion. With a typical premium, it could be valued at roughly $15 billion or more. Philip Morris has a market value of about $154 billion. Shares in Philip Morris were up close to 2% in afternoon trading on a day when the markets swooned. U.S.-listed Swedish Match shares jumped about 20%, while trading in Stockholm was closed.

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Swiss stocks

The Swiss stock market recorded heavy losses on Monday. This continued the downward trend of the previous week. The SMI lost 2.4 per cent to 11,444 points. All 20 SMI stocks closed in the red. 41.1 (previously: 38.78) million shares were traded. Among the defensive heavyweights, Roche alone was able to escape the downward turmoil with a mini-decline. Nestle (-2.4%) and Novartis (-1.5%) were more clearly in the red. However, they still fared better than some cyclical stocks. Sika, for example, lost 5.9 per cent and Adecco by 5.2 per cent. Holcim fell 6 per cent or 2.87 francs, but the company paid a dividend of 2.20 francs. With tighter anti-covid measures in China and weak economic data from the Middle Kingdom, Richemont and Swatch fell 4.1 and 2.8 per cent respectively.

International markets


European equity markets closed sharply lower on Monday as investors feared that inflation would push central banks to accelerate interest rate hikes in the coming months. In addition, they fear that the handling of the health crisis in China, including the containment measures in place in the country, will weigh on global economic growth. The Stoxx Europe 600 index lost 2.9% to 417.5 points. In Paris, the CAC 40 and the SBF 120 dropped 2.8% each. In Frankfurt, the DAX 40 fell by 2.1%, and in London, the FTSE 100 dropped 2.3%. Infineon Technologies AG said Monday that profit and revenue for the second quarter of fiscal 2022 increased, and raised its full-year targets. The German chip maker said net profit for the three months ended March 31 increased to 469 million euros ($494.7 million) from EUR203 million a year earlier. Revenue for the quarter rose to EUR3.30 billion from EUR2.70 billion. “Global uncertainties, in particular the war in Ukraine and the further course of the coronavirus pandemic, are placing stress on supply chains,” Chief Executive Jochen Hanebeck said. Shaftesbury PLC and Capital & Counties Properties PLC said Saturday that they are in talks over a possible all-share merger, but that full terms haven’t been finalized and there is no certainty any deal will be struck. Under the possible merger shareholders of Shaftesbury would own about 53% of the combined company, excluding shares owned by CapCo. CapCo currently owns 97 million Shaftesbury shares, or 25.2% of its issued share capital.

United States

The most punishing market selloff in years showed no signs of abating Monday, with U.S. stock indexes sliding to new lows for 2022 and other assets, like oil and bitcoin, tumbling as well. Markets have been shaken this year by a flood of investor worries. Inflation is running at its fastest pace in decades, threatening to eat into corporate profits and rein in consumer spending. Economic growth is slowing. And the Federal Reserve is kicking off what analysts anticipate will be its most aggressive monetary policy tightening campaign since the 1980s – something many investors worry may tip the economy over the edge into recession. The S&P 500 fell 132.10 points, or 3.2%, to 3991.24, adding to losses after closing out its longest streak of weekly declines since 2011. Monday marked the first time the index closed below the 4000 level since March 2021. The Nasdaq Composite tumbled 521.41 points, or 4.3%, to 11623.25, and the Dow Jones Industrial Average shed 653.67 points, or 2%, to 32245.70, ending at its lowest level since November 2020. Facebook parent Meta Platforms fell $7.56, or 3.7%, to $196.21, while lost $119.57, or 5.2%, to $2,175.78 and Apple shed $5.22, or 3.3%, to $152.06. Technology stocks have been particularly hard hit by this year's selling because rising rates have made many investors reluctant to put money in parts of the market that look expensive. Industrial stocks took a hit as well. Investors tend to view the group as an economic bellwether, since its profits tend to be particularly sensitive to changes in the growth outlook. Caterpillar fell $8.36, or 3.9%, to $206.29 and Boeing lost $15.59, or 10.5%, to $133.31. Ford Motor Co. has sold off about 8% of its stockholdings in Rivian Automotive Inc., according to people familiar with the matter, pushing shares of the electric-vehicle startup to an all-time low. Rivian stock has come under pressure, following news of the Ford stock sale, first reported by CNBC on Saturday. Rivian’s stock opened at $25 a share Monday, down 13% from Friday’s close and continuing a slide that began earlier this year as the company has had to curtail factory production due to supply-chain challenges.


With very weak Wall Street, most Asian stock exchanges are also heading downwards on Tuesday. Shanghai is one of the few stock markets that can once again escape the negative trend. The Composite Index there is up 0.2 per cent. Chinese investors are betting that the domestic stock market has found its bottom after the sell-off in the wake of the recent pandemic wave, they say.


The yield on the U.S. benchmark 10-year Treasury note was at 3.080% on Monday, compared with 3.124% on Friday. The 10-year yield, which rises as bond prices fall, has risen nearly 1.6 percentage points since the end of 2021.


HSBC raises the Air France-KLM target to EUR 3 (2.80) – Reduce

CS lowers the Adidas target to EUR 193 (205) – Underperform

UBS raises the ING target to EUR 15.90 (15.30) – Buy

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