Research Market strategy
By Swissquote Analysts
Published on 16.08.2022
Morning news

Turquoise Turns Down Rio Tinto's Acquisition Proposal

Topic of the day

Anglo-Australian metals and mining firm Rio Tinto Plc reaffirmed its proposal to buy Turquoise Hill Resources for C$34 per Canadian miner's share. While Turquoise Hill rejected the acquisition proposal, Rio Tinto believes the offering is still compelling. Rio Tinto had made its proposal on 14 March that would have valued the Turquoise Hill minority share capital at around $2.7 billion. Rio Tinto continues to expect that the proposed transaction could deliver compelling value for Turquoise Hill minority shareholders and provide the certainty of an all-cash offer at a premium of 32 percent to Turquoise Hill's closing price of C$25.68 per share on March 11, and 78 percent to Turquoise Hill's closing price of C$19.12 per share on January 24.

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Swiss stocks

The stock market in Switzerland recorded slight gains on Monday. On Friday, Wall Street was still reeling in significant gains after the close in Europe. The SMI gained 0.4 per cent to 11,172 points. Among the 20 SMI stocks, there were twelve gainers and eight losers. 18.74 (previously: 26.41) million shares were traded. The market was supported by the three index heavyweights Novartis (+0.4%), Roche (+0.9%) and Nestle (+0.9%). Other sought-after stocks included Givaudan, up 2 per cent, and Sika, up 1.7 per cent. Zurich Insurance fell 1.9 per cent. Jefferies lowered the price target for the share. Actually, the half-year results read well, said Jefferies with regard to the operating profit, which was 3.3 percent above market estimates. Nevertheless, the analysts' assessment has not changed much. They continue to vote "hold" due to a lack of positive catalysts. Other financial stocks were also not sought after. Participants pointed to falling yields in the bond markets. UBS lost 0.3 per cent and Credit Suisse 1.1 per cent.

International markets


The European stock markets started the week slightly higher, despite concerns about the global economic situation, which was reflected in a sharp fall in oil prices. At the close, the Stoxx Europe 600 index gained 0.3% to 442.4 points. In Paris, the CAC 40 and the SBF 120 gained 0.3% each. The DAX 40 in Frankfurt and the FTSE 100 in London gained 0.2% and 0.1% respectively. Scandinavian airline SAS AB said Sunday that it has entered into a $700 million bridge financing agreement with Apollo Global Management Inc. as it continues working through the chapter 11 bankruptcy-protection process. The so-called debtor-in-possession, or DIP, financing credit agreement is a specialized type of bridge financing used by businesses that are restructuring through a chapter 11 process. The DIP financing, along with cash generated from the airline’s ongoing operations, enables SAS to continue meeting its obligations throughout the chapter 11 process, it said. Henkel AG & Co. said Monday that sales rose in the first half of the year but that earnings fell, hurt by increasing raw-material and logistics prices. The German chemicals and consumer-goods company posted first-half earnings before interest and taxes of 684 million euros ($701.7 million) compared with EUR1.30 billion a year earlier. Net income was EUR447 million, down from EUR942 million, while adjusted operating profit fell to EUR1.17 billion from EUR1.43 billion. HelloFresh SE on Monday backed its outlook for the full year and confirmed its second-quarter results. The German meal-kit maker said it expects revenue growth on constant currency basis in the range of 18%-23%, and adjusted earnings before interest, taxes, depreciation and amortization in the range of EUR460 million-EUR530 million ($471.9 million-$543.7 million) in 2022

United States

U.S. stocks climbed Monday, extending their recent winning streak, while commodity prices fell on worries about slowing growth in China. The S&P 500 added 16.99 points, or 0.4%, to 4297.14 after capping a fourth consecutive week of gains on Friday. The Dow Jones Industrial Average added 151.39 points, or 0.4%, to 33912.44 and the Nasdaq Composite advanced 80.87 points, or 0.6%, to 13128.05. Nine of the S&P 500's 11 sectors rose, with consumer staples and utilities leading the gains. Energy and materials stocks declined with commodity prices. Some investors say stocks have fallen far enough this year to become attractive buying opportunities again. The S&P 500 has climbed 17% since June 16 but remains down 9.8% in 2022. Warren Buffett’s Berkshire Hathaway Inc. scooped up millions more shares of Apple Inc. and doubled down on its energy investments, while the stock market swooned in the second quarter. The moves were made public in Berkshire’s 13F filing, which was released after the stock market closed Monday. Regulations require institutional investors managing more than $100 million to file the form, which lays out firms’ equity holdings as of the end of the most recent quarter, as well as the size and market value of their positions. HBO is laying off about 14% of its workforce, people familiar with the matter said, the latest move in a broader round of cost-cutting by the new leadership at parent Warner Bros. Discovery Inc. Of the 70 jobs being cut, the bulk are at HBO Max, the company’s main direct-to-consumer streaming service that launched in 2020, the people said. The HBO Max units in charge of reality shows and documentaries will be affected, as well as the one responsible for family entertainment, they said. HBO Max’s casting unit will be dissolved, and the team in charge of buying old content for the service will be greatly reduced, they said.


The majority of the stock markets in East Asia and Australia are showing slight gains on Tuesday. However, the Tokyo stock exchange is lagging behind the other trading centres in the region. In Tokyo, the Nikkei index fell 0.1 per cent to 28,851 points, weighed down by oil stocks. Idemitsu Kosan lost 2.5 per cent and Inpex 2.0 per cent. In Hong Kong, the Hang Seng Index is 0.1 per cent higher, supported by hopes of further easing by the Chinese central bank.


The yield on 10-year U.S. Treasurys slipped to 2.790% from 2.848% Friday.


UBS lowers Interroll target to CHF 2,700 (3,300) – Neutral

UBS raises ING target to EUR 14.70 (14.50) – Buy

UBS raises Covestro target to EUR 34 (33) – Neutral

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