Market Recap 24-09-17

United States The post-financial crisis US equity rally continues this week, with the S&P 500 closing at $2,502.22 ( +0.08% over the week). Apple’s share price slide led it to its worst week in 17 months because of the mixed reviews for its new iPhone 8, as it offers just a minor upgrade to the […]

The Transformation of Indian Automotive Sector

Industry overview One of the core Indian industries is the automotive industry. In 2016, India was the World’s 6th vehicle manufacturer with a total production of 24 million units and the 5th biggest passenger vehicle market. In the same year, this sector accounted for 7.1% of the country GDP, 27% of industrial GDP, 54% of […]

The FED Model: Illusion or Reality?

The aim of this article is to analyse the popular Fed Model, pointing out its strengths as a descriptive tool but warning investors against its alleged predictive qualities. The Fed Model is a stock valuation approach introduced in the late 1990s. It asserts that the acceptable earnings yield (the inverse of the PE ratio) for […]

Another Aerospace & Defense Mega-Deal: Northrop Grumman to Acquire Orbital ATK for $7.8bn

Northrop Grumman (NYSE: NOC) – market cap as of 23/09/2017: $49.02bn Orbital ATK (NYSE: OA) – market cap as of 23/09/2017: $7.64bn Introduction On September 18, 2017, aerospace giant Northrop Grumman announced the acquisition of Orbital ATK for approximately $9.2bn, of which $1.4bn financed through debt. The deal, to be completed around mid-2018 subject to […]

Gilead bets big with $11.9bn Kite Pharma purchase

Kite Pharma (NASDAQ:KITE) – Market cap as of 23/09/2017: $10.28bn Gilead Sciences (NASDAQ:GILD) – Market cap as of 23/09/2017: $108.74bn Introduction On August 28, 2017, Gilead Sciences, Inc. and Kite Pharma, Inc. announced that the companies have entered into a definitive agreement pursuant to which Gilead will acquire Kite for $180 per share in cash. […]

Clariant and Huntsman: a $20bn merger of equals in the chemicals industry

Clariant AG (VTX: CLN) – market cap as of 23/09/2017: CHF7.74bn Hunstman Corporation (NYSE: HUN) – market cap as of 23/09/2017: $6.55bn Introduction Clariant and Huntsman unveiled plans to create a global specialty chemical company in May, saying they expected the transaction to close by the end of 2017. The merger has been opposed by […]

Another Alternative to Grow in the US Energy Market: Sempra Energy to Acquire Oncor for $18.8bn

Sempra Energy (NYSE:SRE) – market cap as of 16/09/2017: $29.39bn Introduction On August 20, 2017, Sempra Energy announced an agreement to acquire the 80% stake that Energy Future Holdings Corporation holds in Oncor Electric Delivery Company. The deal agreement ends a series of bids from relevant players, with Sempra being the fourth public suitor for […]

Aerospace is Flying High: US United Technology and Rockwell Collins to Merge in a New Giant

United Technology Corp. (UTX:NYSE) – market cap as of 16/09/2017: $90.33bn Rockwell Collins Inc. (COL:NYSE) – market cap as of 16/09/2017: $21.30bn Introduction On September 4, 2017, United Technology Corp. announced the definitive agreement to acquire the aviation system and cabin equipment maker Rockwell Collins Inc. for a total transaction value of $30bn ($140 per […]

Amazon completes acquisition of Whole Foods Market for $13.7bn (NASDAQ: AMZN) — market cap as of 15/09/2017: $476.64bn Introduction On June 16, 2017, it was announced that Inc. (“Amazon”) had reached a definitive agreement to acquire Whole Foods Market Inc. (“Whole Foods”), for a total cash consideration of approximately $13.7bn, including net debt. This is the latest deal in a sector that has been consolidating […]

Market Recap

United States The post-financial crisis US equity rally this week overtook the 1949-56 run to become the second-strongest bull market in US history. The S&P 500 closed the week at $2,500.23, a new record high. North Korea missile tests and possible Fed balance sheet tightening were ignored by the market, that instead focused on the […]

China’s Return to Dollar Sovereign Bond Issuance

Introduction Chinese Ministry of Finance announced on June 13th that it will issue 14 billion RMB and 2 billion USD sovereign bonds this year in Hong Kong, marking the first issuance of dollar-denominated sovereign bonds after 2004. Major financial publications (including WSJ and FT) have reported this week that the country might launch the issuance […]

Trading the Brent-WTI spread

Recently the spread between oil benchmark Brent and Us counterpart West Texas Intermediate has reached the highest levels in two years, breaking above $7/bbl in September. In this article we will give a brief introduction of different crude oils, the fundamental reasons behind price differentials, and an idea on how it could unfold in the […]