Markets Summary and Alibaba’s acquisition | Calamatta Cuschieri

European shares continued their upward trend, after China said it will be having trade talks with the U.S., raising hopes that both parties will make progress on a conflict that has put major economies at a risk of recession

The MSE Equity Price Index is showing an upward trend for the third consecutive day with an added 0.53%. Malta International Airport and Bank of Valletta had positive movements which lead to an increase of 2.8%, €7.40 and 1.8%, €1.14 respectively. On the other hand, MIDI and Tigné Mall had a negative trading day which resulted to 4.7%, €0.61 and 5.3%, €0.90 respectively. RS2 Software plc stayed unchanged with a price of €1.90. Last week the company reported a marginal net profit semi-annually. RS2 also disclosed a detailed commentary with regards to its growth strategy which moved around four main points: growth of managed services, further infiltration of the US market, building up of a direct acquiring business and the formulation of a partnering network. The 3.8% Hili Finance Company plc 2029 newly listed, started trading today which lead to a minor price increase of 100.1%.

European Stocks hit one-month highs

European shares continued their upward trend, after China said it will be having trade talks with the U.S., raising hopes that both parties will make progress on a conflict that has put major economies at a risk of recession. China’s Commerce Ministry commented that it trade team will discuss with their U.S. counterparts in mid-September in preparation for negotiations to happen in early October. The pan-European STOXX 600 index reacted positively to this news as it rose 0.63%. This positive resulted was the highest level since the beginning of August. France’s CAC 40 Index increase by 0.79% to strike a more than 1-month high, which outperformed major European stock markets.

Alibaba heads to luxury push

Alibaba Group has consented to acquire e-commerce business Kaola from Chinese gaming company NetEase for $2 billion, adding a platform that specializes in supplying curated luxury goods from abroad to domestic consumers. Alibaba, which is looking for new revenue drivers as the e-commerce market at home matures, will also invest $700 million for a minority stake in Netease’s music streaming arm as it takes on Chinese market leader Tencent Music. Kaola, launched by NetEase in 2015, aggressively targets shoppers in China by offering products from top brands such as Gucci, Shisheido and Burberry, primarily sourcing goods directly from suppliers to resell to consumers.

The Kaola deal will boost Alibaba’s access to wealthy Chinese buyers, who account for more than a third of the luxury goods sector’s worldwide revenues, as online sales slow at home. Online retail sales in China grew 17.8% in the first half of 2019, versus 32.4% a year earlier, government data shows.

Tencent Music dominates the Chinese music streaming market with an 83.8% share through three streaming services, but it recently reported the slowest increase in a key growth metric. It is under investigation by China’s antitrust authority in a review that could end exclusive licensing deals it forged with the world’s biggest record labels. NetEase Music and Alibaba’s Xiami have 10.3% and 2.1% market share, respectively.

This article was issued by Peter Petrov, Junior Trader at Calamatta Cuschieri. For more information visit, The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.


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