Research Market strategy
By Swissquote Analysts
Published on 06.09.2023
Morning news

Arm Targets More Than $52 Billion Valuation in Largest IPO of the Year

Topic of the day

British chip designer Arm Ltd. is targeting a valuation of more than $52 billion from what is expected to be the largest initial public offering this year, according to the company's latest regulatory filing. SoftBank Group, Arm's owner, plans to sell roughly 10% of the total shares outstanding, setting a share sale price of between $47 and $51 apiece. The Securities and Exchange Commission filing comes as Arm's management hits the road starting Tuesday to meet with prospective investors to solicit support for the offering. The offering, expected to be the largest of the year, is an important test case for the sustainability of the recent revival in the IPO market because of its considerable size. It will follow the successful, but smaller issues, in June by restaurant chain Cava Group and in July by Oddity Tech, a direct-to-consumer seller of makeup brands. Several technology companies, many of which are Arm customers, have indicated that they could buy a total of $735 million of stock in the offering, according to Tuesday's filing. That would represent a tiny fraction of the chip designer's expected value. Still, it could signal a vote of confidence in the business for other institutional investors that might consider participating in the IPO.

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Swiss stocks

The Swiss stock market ended notably lower on Tuesday after languishing in negative territory right through the day's session. Rising concerns about global economic slowdown weighed on sentiment. The benchmark SMI ended with a loss of 94.69 points or 0.86% at 10,958.90. The index touched a low of 10,953.57 and a high of 11,024.57. Sika ended down 2.3%. Sonova, Richemont, Roche Holding, Novartis, Geberit, Holcim and Nestle lost 1.2 to 1.9%. Givaudan, ABB and Swisscom ended lower by 0.9 to 1%. Partners Group rallied more than 6.5%. Logitech gained about 1.5%, while Swiss Re, Swiss Life Holding and Zurich Insurance Group ended higher by 0.85%, 0.47% and 0.29%, respectively. In the Mid Price Index, Temenos Group drifted down 3.16%, Bachem Holding lost 2.28% and Clariant declined 2.09%. AMS, Straumann Holding, Dufry, SIG Combibloc, Flughafen Zurich, Schindler Ps and Tecan Group dropped 1 to 1.3%. DocMorris climbed 5.4%. Baloise Holding ended higher by 1.3%, while Belimo Holding and Helvetia gained 0.78% and 0.52%, respectively.

International markets


European stocks closed lower on Tuesday, weighed down by concerns about economic slowdown after weak services activity in China and slowing eurozone business activity. The pan European Stoxx 600 ended down 0.23%. The U.K.'s FTSE 100 drifted down 0.2%, Germany's DAX and France's CAC 40 both ended lower by 0.34%, while Switzerland's SMI dropped 0.86%. Among other markets in Europe, Czech Republic, Finland, Iceland, Ireland, Poland, Portugal, Russia and Spain ended weak. Austria, Greece, Norway, Sweden and Turkiye closed higher, while Belgium, Denmark and Netherlands ended flat. In the UK market, B&M European Value Retail, Croda International, Ashtead Group, Tesco, Ocado Group, Bunzl and Flutter Entertainment lost 2 to 3.4%. Johnson Matthey, Kingfisher, Smith & Nephew, ABRDN, CRH, Entain, Anglo American Plc, Hargreaves Lansdown, Melrose Industries, Prudential and Natwest Group lost 1.2 to 2%. Whitbread rallied 2.3%. Centrica, BP, Weir Group, IHG, Vodafone Group, Antofagasta and Shell gained 1 to 2%. In the German market, Commerzbank tumbled more than 6%. Fresenius Medical Care ended 4.4% down. Siemens Energy, Zalando, Deutsche Bank, HeidelbergCement, Fresenius, Deutsche Post and Sartorius lost 2 to 3.7%. BASF, Adidas, RWE, Covestro, Puma, Qiagen and Infineon Technologies also ended notably lower. BMW, Porsche, Continental, Hannover Rueck and Deutsche Telekom ended higher by 1 to 2.2%. In Paris, Eurofins Scientific, WorldLine, Teleperformance, Carrefour, Kering and Credit Agricle lost 2 to 2.7%.

United States

An extension of oil-production cuts by two of the world's largest crude exporters Tuesday hardened Wall Street's fears that the Chinese economy has hit a rough patch that could slow global growth. Russia and Saudi Arabia surprised many investors by curtailing output through the end of the year, pushing oil prices to their highest levels of 2023. Benchmark U.S. crude gained more than 1.3%, closing at $86.69 a barrel. Energy was the S&P 500's best-performing sector. Economic concerns weighed on stocks Tuesday, with major indexes wavering between small gains and losses for much of the day before finishing in the red. The S&P 500 slipped by 0.4%, while the tech-heavy Nasdaq Composite edged 0.1% lower. The Dow Jones Industrial Average fell by 0.6%, or about 196 points. Rising bond yields Tuesday dragged down stock markets, pushing home builders, utilities and many big banks into the red. Shares in Airbnb and Blackstone rose 7.2% and 3.6%, respectively, after S&P Dow Jones Indices said late Friday that they would join the S&P 500 on Sept. 18. Tesla stock advanced 4.7% following reports of growing sales in China. United Airlines said flights resumed after it paused departures Tuesday afternoon citing a systemwide technology issue. The airline didn’t specify what system was affected, but later said it had identified a fix for the technology issue.


Sentiment on East Asian bourses and in Sydney remains gloomy after Tuesday's latest Purchasing Managers' Index showed a sharp decline, underlining the lacklustre state of the Chinese economy. Only in Japan is the stock market barometer up again. The Nikkei index gained 0.6 per cent to 33,249 points. It is again supported by the weak yen, because this improves export opportunities. At 147.81 per dollar, the yen has fallen to a new low for the year. Other major stock markets in the region are down between 0.3 per cent in Shanghai and 0.8 per cent in Sydney.


The U.S. yield on the benchmark 10-year Treasury yield rose to 4.267%. Yields on 2-year Treasurys, a rough indicator of traders' short-term inflation expectations, climbed to 4.966%.


Bank of America raises the Inditex to Buy (Neutral) – Target EUR 43 (37)

UBS lowers the Kone target to EUR 55 (60) – Buy

JP Morgan lowers the Ahold Delhaize to Underweight (Overweight) – Target EUR 28.17 (32.09)

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