Research Market strategy
By Swissquote Analysts
Published on 04.09.2023
Morning news

Chip-Maker Arm Looks to Target Over $50 Billion Valuation at IPO

Topic of the day

British chip designer Arm Ltd. is eyeing a target valuation between $50 billion and $55 billion for what is shaping up to be the year's largest initial public offering. Arm plans to start meeting with prospective investors as early as Tuesday ahead of its stock-market debut on the Nasdaq exchange the following week, people familiar with the matter said. SoftBank Group, Arm's owner, is expected to sell about 10% of total shares outstanding in the offering, the people said. The blockbuster deal will test the IPO market's recent revival, following the successful, but smaller, public debuts of restaurant chain Cava Group and Oddity Tech, a direct-to-consumer seller of makeup brands. SoftBank acquired Arm, whose chips are used in most smartphones and mobile devices, for roughly $32 billion in 2016. It later sold a quarter of the business for $8 billion to the Vision Fund, a unit of the Japanese tech investor.

Swiss stocks

The Swiss stock market turned lower again on Friday and has now finished in the red in two of three trading days since the end of the modest two-day winning streak in which it had collected almost 150 points or 1.3 percent. The SMI opened lower but rebounded briefly into positive territory before heading back under water for the rest of the session in fairly volatile trade. The soft sentiment was in line with much of the rest of Europe as the markets turned lower after mixed employment data from the United States reignited concerns about the health of the global economy. For the day, the index dropped 50.80 points or 0.46 percent to finish at 11,075.15 after trading between 11,069.45 and 11,133.63. Among the actives, Sika stumbled 1.36 percent, while ABB declined 1.13 percent, Swatch Group climbed 1.05 percent, Nestle slumped 0.88 percent, Swisscom shed 0.56 percent, UBS sank 0.30 percent, Julius Bar Gruppe slid 0.29 percent, Swiss Life added 0.22 percent, Zurich Insurance collected 0.12 percent and Novartis rose 0.04 percent. In economic news, Switzerland's consumer price inflation held steady in August after easing in the previous five months, the Federal Statistical Office reported Friday. The consumer price index climbed 1.6 percent on year in August, the same pace as in July. Economists had expected inflation to ease to 1.5 percent. Moreover, inflation remained within the central bank's target range of 0 to 2 percent.

International markets


The major European markets finished mixed for the second straight day on Friday, unable to hold on to early gains. Stocks were broadly higher as investors cheered signs of more stimulus from Beijing and data showing that the downturn in Eurozone manufacturing eased last month. But the markets turned lower after mixed employment data from the United States reignited concerns about the health of the global economy. The DAX in Germany sank 106.74 points or 0.67 percent to finish at 15,840.34, while the FTSE in London rose 25.41 points or 0.34 percent to close at 7,464.54 and the CAC 40 in France slipped 19.93 points or 0.27 percent to end at 7,296.77. In Germany, Volkswagen plummeted 4,18 percent, while Bayerische Motoren Werke tumbled 3.06 percent, Daimler Truck declined 1.26 percent, Vonovia slumped 1.18 percent, Siemens Energy sank 0.91 percent, Heidelberg Materials dropped 0.75 percent, Deutsche Post lost 0.51 percent, Infineon Technologies fell 0.42 percent, Deutsche Borse added 0.37 percent and Deutsche Bank collected 0.32 percent. In London, Rolls-Royce tumbled 1.44 percent, while Shell jumped 1.37 percent, Centrica climbed 1.19 percent, Rentokil Initial slumped 1.00 percent, Haleon sank 0.81 percent, Persimmon shed 0.66 percent, Scottish Mortgage Investment gained 0.64 percent, British American Tobacco lost 0.55 percent, Vodafone rose 0.53 percent and Tesco was down 0.38 percent. In France, Carrefour retreated 2,18 percent, Atos improved 1.62 percent, Veolia Environment slumped 0.80 percent, Orange added 0.70 percent, Vivendi gained 0.64 percent, Engie lost 0.47 percent, Societe Generale collected 0.23 percent, BNP Paribas fell 0.20 percent and Credit Agricole eased 0.05 percent.

United States

The S&P 500 rose Friday, finishing its best weekly performance since June. The broad index gained 0.2%. The Dow Jones Industrial Average added roughly 115 points, or 0.3%. The Nasdaq Composite eased less than 0.1%. For the week, the S&P 500 advanced 2.5%. The Dow and Nasdaq rallied 1.4% and 3.2%, respectively, each notching their best weeks since July. Investors parsed the August jobs report ahead of a holiday weekend. All three major indexes initially rose Friday after the report suggested the economy may be cooling enough for the Federal Reserve to hold off on further interest-rate increases. The unemployment rate jumped to 3.8% in August. Economists had expected it to hold steady at 3.5%. Average hourly earnings, meanwhile, rose 4.3% in August from a year earlier, less than in July and lower than forecast. Shares of entertainment companies fell Friday after a dispute between Charter and Walt Disney created concerns about the future of the cable-television business model. Shares of Charter eased 3.6% and Disney lost 2.4%. Warner Bros. Discovery, Paramount Global, Fox and Comcast also pulled back. Dell Technologies rallied 21% after the company reported better-than-expected earnings and issued a robust outlook. Consumer-staples stocks were the worst performing sector of the S&P 500 on Friday. Walgreens Boots Alliance declined 7.4% after the pharmacy operator's chief executive stepped down. Stocks are coming off a weak month of trading, even with a late-August rally. The indexes took a breather from their year-to-date climb as investors assessed the sustainability of stocks' ascent and weighed competing high yields from safer, cash-like instruments.


At the start of the new stock market week, the music plays in East Asia on the Chinese stock exchanges. Hong Kong tends very firmly with a plus of 2.6 percent, in Shanghai the trend is firm, there the market barometer gains 1.1 percent. Positive reports from the real estate sector provide new confidence.


In the U.S. bond market Friday, the benchmark 10-year U.S. Treasury yield swung, ultimately rising to 4.173% from 4.090% on Thursday. Yields rise as prices fall.


UBS lowers Richemont target to CHF 170 (180) – Buy
UBS lowers Hermes target to EUR 2,228 (2,291) – Buy
UBS lowers Kering target to EUR 511 (540) – Neutral