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Research Market strategy
by Swissquote Analysts
Morning News

Steris Agrees to buy Cantel Medical in Mostly Stock Deal

Topic of the day

Steris PLC agreed to buy Cantel Medical Corp. in a deal that will bring together two big providers of sterilization products. The mostly stock deal values Cantel at around $3.6 billion, or $84.66 a share, based on Steris' closing price Monday, the companies said. Cantel shareholders would get about $16.93 in cash and 0.33787 of a Steris share for each Cantel share they own. The Wall Street Journal first reported the companies were near a deal Monday. Cantel had a market value of around $3.5 billion as of Monday's close, while Steris' was around $17.3 billion. Dublin-based Steris, which has a U.S. presence in Mentor, Ohio, sells sterilization equipment, surgical tables, and other products and services used in hospitals and laboratories.


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Swiss stocks

The SMI closed virtually unchanged on 10,875 points Tuesday. A rise in US bond yields sent Credit Suisse up 2.6 percent and UBS 0.7 percent. Geberit gained 1.5 percent after analysts raised their target to CHF 545 from CHF 460, saying competitors’ figures pointed to a good Q4. After rising 1.5 percent Monday, Givaudan fell 2.1 percent. Sika slid 0.4 percent on posting initial Q4 figures, with turnover slightly below expectations. SGS closed unchanged despite news of its takeover of lab service provider ISL from Novartis Ireland Ltd. Parent Novartis slid 0.5 percent after Monday’s gains amid news of a partnership with Chinese pharmaceutical developer Beigene. Second-tier online chemist Zur Rose surged 14.9 percent after analysts began watching it with a "buy" recommendation and target of CHF 500, calling it a notably attractive European online stock. Temenos fell 4.5 percent after analysts downgraded it to "underperfom" from "neutral", saying transition to the Cloud would hurt margins.

International markets

Europe

European stocks trade mixed as investors exercise caution ahead of the upcoming earnings season and monitor the latest coronavirus news and US politics. The Stoxx Europe 600 rises 0.1%, the FTSE 100 falls 0.7%, the DAX drops 0.1% and the CAC-40 declines 0.2%. Expectations the Biden administration will deliver "targeted and effective" stimulus are the "main hope" for coming weeks but the start of 4Q earnings from Friday provides a reason to remain cautious, IG's Chris Beauchamp says. Following strong gains in November and December driven by vaccine hopes and Biden's election victory, investors are "wondering where the next big catalyst for further upside will come from" and are "painfully aware" that coronavirus remains untamed, he says. French automaker Renault said it's signed a memorandum of understanding to launch a 50-50 joint venture with Plug Power (PLUG) in France by the end of the first half of 2021, targeting over 30% share of the fuel cell-powered light commercial vehicle market in Europe. The joint-venture will combine the vehicle manufacturing capabilities of Renault with the fuel cell and hydrogen system manufacturing knowledge of Plug Power, the companies said. Plug Power shares jumped 14% in premarket trade, while Renault added 1.5% in Paris.

United States

U.S. stocks finished up slightly as money managers prepare to parse quarterly results from U.S. companies in coming days. The Dow Jones Industrial Average was up 0.2% as of the 4 p.m. close of trading in New York, after wavering earlier in the day. The S&P 500 was about flat, while the technology-heavy Nasdaq Composite ticked up 0.3%. Federal Reserve Bank of Cleveland President Loretta Mester said Tuesday the economy will continue to need strong government support this year, while suggesting she believes monetary policy is currently set at an appropriate level to deal with how she expects the economy to develop. Visa Inc. is abandoning its $5.3 billion planned acquisition of Plaid Inc., a key player in the financial-technology space, in the face of a Justice Department antitrust lawsuit that challenged the deal. The department sued to block the deal in November alleging the acquisition would allow Visa to unlawfully maintain a monopoly in the online debit-card market. Plaid, the government argued, was a nascent but important competitive threat to Visa, and eliminating that threat would lead to higher prices, less innovation and higher entry barriers for online debit services. Walmart Inc. said Monday that it has joined with investment firm Ribbit Capital to create a new fintech startup to further expand its financial-services offerings. The new company will be majority-owned by Walmart, and the board will include Chief Executive of Walmart U.S. John Furner, Executive Vice President and Chief Financial Officer Brett Biggs, as well as Meyer Malka, managing partner of Ribbit Capital. Zoom Video Communications announced that it has sold one million Zoom Phone seats shortly before it reached the two-year anniversary of the product's general availability.

Asia

The stock markets in East Asia and Australia are mostly firmer at midweek. Technology stocks in particular continue to be sought after. These are seen as one of the winners of the pandemic. In Tokyo, the Nikkei-225 rose by 1.1 per cent to 28,468 points. In Seoul, the Kospi gained 0.4 per cent.

Bonds

U.S. Treasurys extended their rally in Asia, with the pull back in yields beginning Tuesday after investors showed appetite for an auction of benchmark 10-year notes. The successful auction helped to diminish the recent pressure on the bond market amid expectations that the incoming administration of President-elect Joe Biden will enact more fiscal stimulus, now that the Democrats control both houses of Congress.

Analysis

Citi rises the UBS target to 16,50 (16,10) CHF – Buy
UBS rises the Vivendi target to 36 (33) EUR – Buy
CS lowers Temenos to Underperf. (Neutral)


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