Porsche Prepares IPO in Lackluster Year for New Offerings
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Volkswagen-owned Porsche could price its initial public offering at the high end of the planned range. At $80 a share, the sale should raise more than $9 billion for VW amid an otherwise lackluster environment for IPOs this year. Porsche will have a market value in the range of $75 billion after its IPO. That almost matches Volkswagen's market cap of about $83 billion. Volkswagen is selling roughly 114 million shares starting Thursday. Shares in Porsche are expected to trade higher following its stock-market listing Thursday thanks to "the appetite for Europe's largest IPO this year, Porsche-driving retail investors, as well as Porsche's potential fast-track entry into indices," Bernstein said. Parent company Volkswagen set a placement price range for Porsche's preferred shares of EUR76.50-EUR82.50. While the price could exceed EUR82.50 if the book-building process is stronger than expected and the companies agree, "we have to note that the Porsche-Piech family is paying a 7.5% premium on top of the offer price and is taking on a significant amount of long-term debt to pay the bill," Bernstein said.
The Switzerland stock market ended modestly higher on Tuesday after holding in positive territory right through the day's session. The benchmark SMI, which rose to 10,201.23 in the first hour, ended the day with a gain of 53.81 points or 0.53% at 10,126.43. Roche Holding rallied 2.2%. Logitech gained 2.05%, while Lonza Group, Zurich Insurance Group and ABB advanced 1 to 1.1%. Novartis, Sika, Sonova and Swisscom posted modest gains. Credit Suisse and Swiss Re both shed more than 2%. Swiss Life Holding ended lower by about 1.05%. Geberit and Alcon also ended weak. Among the stocks in the Swiss Mid Price Index, Zur Rose surged 5.57%. AMS gained a little over 5%, and Roche Holding climbed 3.7%. Galenica Sante, Kuehne & Nagel, Bachem Holding, Schindler Ps and Lindt & Spruengli gained 1.5 to 2.3%. SGS, Swiss Prime Site, Clariant and PSP Swiss Property declined 2.4 to 2.9%
Most of the major markets in Europe closed weak on Tuesday as concerns about monetary tightening and economic slowdown continued to hurt sentiment. The pan European Stoxx 600 edged down 0.13%. The U.K.'s FTSE 100 ended lower by 0.52%, Germany's DAX drifted down 0.72% and France's CAC 40 lost 0.27%. In the UK market, RightMove tumbled nearly 9%. SSE, Taylor Wimpey, Unite Group, Kingfisher, Barratt Developments, Segro, British Land, Rolls-Royce Holdings, National Grid and M&G lost 4 to 7.3%. Glencore, Hargreaves Lansdown, Flutter Entertainment, Antofagasta, Smurfit Kappa Group, Rio Tinto, Anglo American Plc and Burberry Group gained 1.5 to 3.2%. In Paris, Unibail Rodamco, Kering, Veolia, BNP Paribas, Airbus Group, Credit Agricole and Safran lost 1.2 to 3.1%. Atos climbed more than 3%. Renault rallied 2.6%, while Valeo, Michelin, WorldLine, Air France-KLM and Carrefour gained 1.4 to 2%. In the German market, Deutsche Bank dropped more than 4%. E.ON, Brenntag, Fresenius Medical Care, Fresenius, Adidas, Porsche Automobil and Deutsche Wohnen also declined sharply. HelloFresh surged nearly 4%. Zalando gained about 2%, while Deutche Post, Qiagen and Infineon Technologies added 1 to 1.2%.
The Dow industrials and the S&P 500 fell again Tuesday as investors parsed a spate of economic data and comments from Federal Reserve officials. All three indexes spent much of the morning in the green, but it didn’t last. The Dow Jones Industrial Average, which entered a bear market on Monday, fell 125.82 points, or 0.4%, to 29134.99. That marked its sixth consecutive day in the red. The broad S&P 500 slipped 7.75 points, or 0.2%, to 3647.29, closing at its lowest level of the year for the second day in a row. The S&P is also now down for six days in a row, its longest losing streak since February 2020, according to Dow Jones Market Data. The technology-heavy Nasdaq Composite rose 26.58 points, or 0.2%, to 10829.50. Tuesday’s declines prolong a brutal year for financial markets. Stocks and bonds have both dropped sharply this year, an unusual tandem that reflects just how unnerved many investors feel. The Dow, the S&P and the Nasdaq are all on pace for their worst first nine months of a year since 2002. Stubbornly high inflation has roiled markets since the start of the year. The Federal Reserve in response has been raising interest rates to try to cool the economy, stoking fears that the central bank will tip the U.S. into recession. Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, reaffirmed the central bank’s resolve to bring down persistent and elevated inflation on Tuesday. On the economic front, data Tuesday showed that companies reduced durable goods orders for a second straight month. Ford Motor (-0.7%) on Monday called for a retrial in the case that saw it ordered to pay $1.7bn in damages last month following a fatal accident involving one of its commercial vehicles. Citigroup lowered its price target for McDonald's (-2.9%) from $275 to $246. The bank expects a less buoyant environment for the group in Europe this winter, due to rising inflation. Tesla (+2.5%) plans to keep production at its Shanghai factory in China at around 93% of capacity until the end of 2022, Reuters reported on Tuesday, citing sources close to the matter. Oracle (-1.6%) agreed to pay a fine of more than $23 million to end a Securities and Exchange Commission (SEC) investigation into suspected bribery. Intel (-0.3%) plans to launch graphics processors for computers dedicated to video games from 12 October, in a bid to gain a share of a lucrative market dominated by rivals Nvidia (+1.3%) and Advanced Micro Devices (1.3%), its chief executive Pat Gelsinger announced on Tuesday.
Stocks in Asia mostly fell, with Japan’s Nikkei 225 down 2% and the Hang Seng in Hong Kong down 2.3%. Among property developers, Country Garden decreases by 6 per cent and CIFI Holdings by 18 per cent. China’s Shanghai Composite slipped 0.8%, mainly in light of Beijing's "zero-covid" policy. Top of the sell lists are mining stocks, along with real estate developers, while the oil and gas sector recovers slightly. South Korea’s Kospi loses as much as 2.8 per cent.
Long-dated U.S. government debt yields gained further ground on Wednesday. The 10-year Treasury note rose 5 basis points to 3.971%, after hitting its highest level since 2010 on Monday. The 2-year Treasury note gained less than a basis point to 4.308%.
RBC cuts SGS to Sector Perform (Outperform) - Target CHF 2,350 (2,700)
Barclays lowers Zur Rose to CHF 48 (61) - Equalweight
Deutsche Bank raises Kingfisher target to 280 (270) p - Buy
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