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By Swissquote Analysts
Published on 06.09.2022
Morning news

Volkswagen to List Porsche in One of Biggest IPOs in Years

Topic of the day

Volkswagen AG said Monday night that it would list its iconic sports car maker Porsche AG in one of the biggest initial public offerings in years and a crucial test of investors’ confidence as high inflation and the war in Ukraine put a damper on the global economy. The offering could value Porsche at as much as 85 billion euros, according to analyst estimates, injecting fresh cash into VW’s coffers that executives say will help the company bankroll its transition to electric vehicles and self-driving cars. “The listing of Porsche AG will give fresh tailwind to Volkswagen’s transformation,” VW Chief Finance Officer Arno Antlitz said. Oliver Blume, who is chief executive of both Porsche and the entire Volkswagen company, welcomed the decision by VW’s supervisory board to move forward with the planned listing, saying it would grant Porsche greater independence. “This is a historic moment for Porsche,” Mr. Blume said. Confirming past comments about the planned offering, VW said that in preparation for the listing, Porsche’s stock has been split into 50% ordinary shares and 50% nonvoting preferred stock. The German auto maker intends to list Porsche on the Frankfurt Stock Exchange and offer 25% of Porsche’s preferred stock to private investors in a public offering aimed for late September or early October. In a second step, the Porsche family heirs, who own a majority stake in VW, will purchase 25% plus one share of Porsche’s ordinary shares, or voting stock, through their listed family investment fund, Porsche Automobil Holding SE. Porsche SE has agreed to purchase the shares at the IPO price plus a 7.5% premium.

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Swiss stocks

The Switzerland stock market ended on a weak note on Monday, in line with markets across Europe, amid rising fears of a recession after gas prices soared over 30% following Russia's decision to extend a halt on gas flows through a major pipeline to Europe. Investors also reacted to data showing a slowdown in Swiss economic growth in the April-June quarter. The benchmark SMI ended with a loss of 72.17 points or 0.66% at 10,819.54. The index touched a low of 10,891.71 earlier in the day. Credit Suisse ended 3.1% down. Holcim, Logitech, Sika, Geberit, ABB and Lonza Group shed 2 to 3%. Richemont, Swiss Life Holding, Givaudan, UBS Group and Swisscom lost 1 to 1.49%. Zurich Insurance Group ended nearly 1% down. The company announced that it intends to exercise its option to redeem 450 million pounds ($515.93 million) of subordinated debt. Novartis and Roche Holding closed higher by about 0.5% and 0.2%, respectively. Among the stocks in the Mid Price Index, Bachem Holding fell nearly 7%. Ems Chemie Holding and Kuehne Nagel drifted down 3.56% and 3.3%, respectively. SIG Combibloc, AMS, Clariant, Georg Fischer, Julius Baer, Schindler Ps, BB Biotech and Schindler Holding lost 2 to 3%.

International markets

Europe

Friday's rebound was short-lived and it was in the red that the European stock markets began the week, against a backdrop of serious fears about the Old Continent's energy supply and its imminent entry into recession. These gloomy prospects have caused the euro to fall to a 20-year low against the dollar. At the close, the Stoxx Europe 600 index fell 0.6% to 413.4 points. In Paris, the CAC 40 and SBF 120 lost 1.2% each. The DAX 40 in Frankfurt gave up 2.2%, while the FTSE 100 (+0.1%) in London kept its head above water as Liz Truss won the race to become British Prime Minister. U.K. home builder Vistry Group PLC agreed to acquire rival Countryside Partnerships PLC for about $1.44 billion in stock and cash, in a move that will create one of the country’s biggest developers and represents a win for U.S.-based activist investor Browning West LP. By joining forces, Vistry and Countryside gain greater scale to better handle a possible slowdown in the U.K. housing market, amid record-setting inflation, rising interest rates and the prospect of a lengthy recession. Last year, Countryside built 5,385 homes across parts of Britain, while its bigger rival delivered 8,639 units, according to the companies’ annual reports. Uniper's shares dived on Monday after Russia suspended natural gas flows to Europe via the Nord Stream pipeline until further notice, raising pressure on European governments as they race to avoid shortages in the coming months. Kremlin-controlled energy company Gazprom PJSC late on Friday extended indefinitely a halt to flows via the natural-gas pipeline connecting Russia with Germany under the Baltic Sea, citing technical problems.

United States

U.S. stocks were closed for the Labor Day holiday.

Asia

On Tuesday, no consistent trend can be observed on the stock exchanges in East Asia and Australia. In many places, prices are more or less treading water. However, there is a clear upward trend in Shanghai thanks to new economic stimuli. The Hong Kong stock exchange, on the other hand, has fallen back into negative territory (-0.4%). The Chinese government announced new measures to support the domestic economy on Monday. In addition, the country's central bank lowered the rate for banks' foreign exchange reserves. The composite index is up 1 per cent in Shanghai. In Japan, sentiment is somewhat dampened by an unexpectedly small increase in consumer spending in July. The Nikkei 225 index rises by 0.1 per cent. Concerns about the economy and high fuel prices are weighing on shares in the automotive and aviation sectors in particular. Japan Airlines falls by 1.1 per cent and Nissan Motor by 0.7 per cent.

Bonds

The yield on the ten-year German Bund was 1.566%, up from 1.523% on Friday evening. U.S. bond market was closed on Monday.

Analysis

UBS raises Philips to Neutral (Sell)

Société Générale raises Deutsche Lufthansa to Buy (Hold)/Target EUR 7.90 (6.70)

Citi raises Vantage Towers to Buy

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