Research Market strategy
By Swissquote Analysts
Published on 12.07.2021
Morning news

Philip Morris Announces Firm Offer to Acquire Vectura Group

Topic of the day

Philip Morris International Inc. announced it has agreed with the board of Vectura Group plc on the terms of an all-cash, recommended offer to acquire Vectura for an enterprise value of GBP 852 million. Under the terms of the acquisition, Vectura shareholders would be entitled to receive 150 pence per share, a 46% premium to the ex-dividend closing price per Vectura share of 103 pence on May 25, 2021. "PMI's Beyond Nicotine strategy, announced in February, articulates a clear ambition to leverage our expertise in inhalation and aerosolization into adjacent areas - including respiratory drug delivery and selfcare wellness - with a goal to reach at least USD 1 billion in net revenues by 2025," said Jacek Olczak, Chief Executive Officer. "The acquisition of Vectura, following the recently announced agreement to acquire Fertin Pharma, will position us to accelerate this journey by expanding our capabilities in innovative inhaled and oral product formulations in order to deliver long-term growth and returns."

Swiss stocks

After the sharp markdowns, the Swiss stock market recovered only slightly on Friday. Due to the defensive character of the leading index SMI, it was less strong than on the neighbouring stock exchanges and on Wall Street. The hurdle of 12,000 points in the SMI was only temporarily cleared again. On the previous day, scepticism had grown as to whether the economy would be able to recover to the extent expected so far. Rising Covid 19 cases in many countries kept concerns alive. The SMI gained 0.5 per cent to 11,990 points. Among the 20 SMI stocks, there were 16 gainers and 4 losers. 33.99 (previously: 42.62) million shares were traded. In contrast to the previous day, cyclicals were again in the lead on Friday. ABB rose by 2.1 per cent and Holcim by 1.3 per cent. The bank stocks, which are also sensitive to the economy, recovered despite the rise in market interest rates. Credit Suisse gained 0.8 per cent and UBS 1.5 per cent. Insurers also made above-average gains.

International markets


European equity markets ended sharply higher on Friday, making up ground lost the previous day on fears of a fourth wave of the epidemic. The Stoxx Europe 600 index gained 1.3% to 457.7 points. For the week as a whole, it was up 0.2%. In Paris, the CAC 40 and the SBF 120 gained 2.1% and 1.9% respectively on Friday. In Frankfurt, the DAX 30 gained 1.7%, and the FTSE 100 gained 1.3% in London. Volkswagen swung to an operating profit for the first half based on preliminary figures, with the implied second-quarter operating profit well ahead of estimates, Citi says. The German car maker's 1H preliminary operating profit of around EUR11 billion implies 2Q operating profit of about EUR6 billion, surpassing Citi's estimate of EUR3.9 billion and consensus of EUR3.5 billion. "Favorable industry supply/demand dynamics continue to support strong pricing and mix for the company, which we expect to sustain in the second half if inventories remain tight due to ongoing semiconductor shortages," Citi says. eutsche Telekom is in a position to deleverage and reach a comfort zone by the end of 2024, Jefferies says, after hosting investor meetings for the German telecommunications company's management. "Management clearly indicated that this effort is a priority, but not one that supersedes all other considerations. In particular, management does not feel pressure from investors to take deleverage steps at the expense of operational or strategic logic," Jefferies says. Other priorities are building up a stake in T-Mobile US and delivering fiber rollout in Germany.

United States

The S&P 500 staged a strong rebound, finishing a topsy-turvy week at a fresh record. The S&P 500 added 1.1%, following its worst one-day retreat since June 18. The Dow Jones Industrial Average added 1.3%, and the Nasdaq Composite gained 1%, both closing at record highs. Many investors rushed to buy the stock-market dip after Thursday's declines, continuing a trend that has become a feature of the stock market's rally over the past year. That desire, alongside easing concerns about the economic recovery, lifted stocks and overshadowed any worries about President Biden's executive order to limit corporate dominance. STMicroelectronics shares underperformed in the first half, but the semiconductor shortage in the automotive and industrial end-markets should help the European chip maker in the second half, Citi says. "Based on a combination of comments from chipmakers, automotive original equipment manufacturers, industrial firms and distributors, we believe that the shortages across the automotive and industrial end-markets are likely to persist into 2022. This in turn should translate into favorable pricing and supportive margin backdrop," Citi says. The U.S. bank upgrades STMicroelectronics to buy from neutral and raises its target price to EUR39.00 from EUR36.50. STMicroelectronics shares trade 2.5% higher at EUR31.81. Jeff Bezos's space company takes aim at what Virgin Galactic offers would-be space tourists ahead of the latter company's planned flight with Richard Branson on Sunday. Blue Origin tweets a graphic that says it has larger windows on its craft than Virgin Galactic has on its space vehicle, and touts that it offers a rocket trip, while Virgin Galactic gets to space on a "high altitude airplane." Blue Origin also claims it has a superior experience because it flies above the Karman line, a boundary for the start of space around 62 miles up


The stock markets in East Asia and Australia recovered significantly on Monday. Strong support from Wall Street, where prices reached record highs again on Friday, and monetary easing by the Chinese central bank (PBoC) initially alleviate concerns about the rampant Corona pandemic and the associated negative consequences for the economy. The region's stock markets are led by the Tokyo stock market, where the Nikkei 225 index is up 2.1 per cent to 28,539 points.


U.S. government bonds barely moved in Asia trade, with the 10-year yield stuck around Friday's level of 1.354%. Treasury yields ended on a high note on Friday, snapping a four-day losing streak and rebounding from multimonth lows. The recent yield decline is seen as a sign investors are shunning riskier assets, but some analysts warned that bond buyers could be underestimating future inflation.


JP Morgan rises the Glencore target to 400 (380) p – Overweight
UBS rises the ING target to 12 (11,70) EUR – Buy
Credit Suisse rises the Page target to 550 (500) p – Underweight

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