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Research Market strategy
by Swissquote Analysts
Morning News

Alibaba Takes Another Step Toward a Hong Kong Listing, Reports Say

Topic of the day

Chinese e-commerce giant Alibaba Group Holding (ticker: BABA) has filed confidential paperwork for a listing on Hong Kong's stock exchange to raise as much as $20 billion, according to news reports Thursday. It comes more than four years after the company went public in New York and raised $25 billion in what remains the world's largest initial public offering. The company declined to comment Thursday. The online retail giant -- one of China's most valuable companies -- currently has a market capitalization of around $417 billion. A Hong Kong listing would bring Alibaba's shares closer to investors at home -- who are generally more familiar with the company -- and could potentially boosting its valuation. Investors from mainland China can buy and sell Hong Kong-listed stocks through a cross-boundary trade link between the Shanghai Stock Exchange and the Hong Kong stock exchange. Alibaba couldn't get listed in Hong Kong in 2014 because it failed to meet the city's regulations due to its dual-class capital structure, which gives founding partners more voting rights -- and control of the company -- than regular shareholders.

Swiss stocks

After five consecutive days of gains, the SMI ran out of steam Thursday, rising only 2 points to 9,862 points, but reached a new all-time high of almost 9,907 points during the day. Positive stimuli came from slight gains on other European markets and Wall Street. The forex market was a downside factor, as the Swiss franc rose after the Swiss National Bank left interest rates unchanged as expected, but raised its forecast for ongoing weak inflation and said the economy had picked up. Pharmaceutical stocks were in demand. Novartis rose 0.7 percent and Roche 0.4 percent. Roche also achieved success with its drug Mabthera in a clinical study. After its recent rally, Lonza bucked the sector trend and slid 1.1 percent. Luxury goods stocks Richemont fell 1.1 percent and Swatch 1.2 percent. Analysts pointed to the Hong Kong demonstrations, as both are heavily reliant on the Chinese market. Lafargeholcim recovered from its previous day’s 4 percent loss after a large trade and rose 1.7 percent.

International markets

Europe

In Europe, stocks were modestly higher with the Stoxx Europe 600 edging up 0.2% to to 380.33. The FTSE 100 edged up. Sterling moved only slightly after Boris Johnson emerged as the strongest candidate in the first round of voting for the next Conservative Party leader. The German DAX was up 53.37 points, or 0.44%, to 12169.05 while the French CAC was up 0.71 point, or 0.01%, to 5375.63. The index now is up seven of the past nine trading days. Volkswagen said on Thursday that it would offer up to 15% of its truck unit Traton AG in a range of EUR27 to EUR33 a share, making the initial public offering worth up to EUR1.9 billion. London spot-gold prices were back near February highs in Asian trading and look set to test resistance at $1,350/troy ounce. Safe-haven demand spiked anew overnight following attacks on 2 oil tankers in the Straits of Hormuz.

United States

Rising shares of energy companies led the S&P 500 higher intraday, putting the broad index on pace for its first gain in three days. Shares of Exxon Mobil, Hess, Phillips 66 and other energy companies all rose in the aftermath of an attack on two oil tankers on one of the world's busiest energy-shipping routes. The incident sent oil prices sharply higher on fears of a possible trade disruption, making energy stocks, which have struggled this quarter, look attractive. The S&P 500 was up 0.3% in recent trading, as energy stocks rose 1.1%, leading the broad index higher after two back-to-back sessions of losses. Modest gains from technology, consumer discretionary and financial stocks added further support, offsetting losses among the market's more defensive corners, including consumer staples and health-care stocks.

Asia

Asian markets were mixed in early trading Friday as Japan's Nikkei rose 0.2% while South Korea's Kospi retreated 0.3%. Hong Kong's Hang Seng index fell 0.4% and the Shanghai Composite inched up 0.1%

Bonds

U.S. government-bond prices rose intraday, as fears of a military standoff in the Persian Gulf sent investors into assets perceived as safe. The yield on the benchmark 10-year Treasury recently traded at 2.102%, according to Tradeweb, compared with 2.129% Wednesday. Yields fall as bond prices rise.

Analysis

UBS lowers the Leoni target to 11 (17) EUR – Sell
UBS rises Siltronic to Neutral (Sell) – Target 62 EUR
CS lowers the Ado Properties target to 45,40 (57) EUR – Neutral

Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.

 
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