Markets jump on mergers | Calamatta Cuschieri

Markets aim higher, Alibaba jumps on debut & Charles Schwab will acquire TD Ameritrade

US stocks started the week higher and ended in record territory on Monday as investors remained focused to the latest developments in US-China trade talks and a cheered a wave of merger activity. The Dow Jones Industrial Average gained 190.85 points, or 0.7 percent, to 28,066.47, while the the S&P 500 index rose 23.35 points, or 0.8 percent, to 3,133.64. Nasdaq Composite jumped 112.60 points, or 1.3 percent, to end at 8,632.49.

European markets also traded higher following the US-China news with the luxury sector receiving a boost after LVMH Moet Hennessy – Louis Vuitton announced it would acquire Tiffany & Co. The pan-European Stoxx 600 index gained 0.7 percent to 407.40 and Germany’s DAX added 0.4 percent to 13,215.82. The UK’s FTSE 100 rose 0.6 percent to 7,370.45.

Maltese markets also moved higher with the MSE Equity Total Return Index closing up 0.175 percent to 9,734.409 points as only three equities moved. Bank of Valletta Plc led the gains with shares up 0.92 percent at €1.10, followed by HSBC Bank Plc which gained 0.79 percent to €1.28. PG Plc meanwhile lost 0.56 percent to close at €1.79.

Alibaba jumps on Hong Kong debut

Chinese e-commerce giant Alibaba’s shares jumped more than 8% in their debut on the Hong Kong stock exchange, an encouraging start at a time when the former British colony is reeling from political unrest. The closing price Monday for Alibaba’s New York-traded shares was $190.45 per share. Each of the U.S. shares is the equivalent of eight Hong Kong shares, which would put the price in Hong Kong terms at 186.30 Hong Kong dollars per share.

Alibaba says the proceeds from the share sale will be used to promote strategies to expand its users, help businesses with “digital transformation, and continue to innovate and invest for the long term.” The company’s 2014 initial public offering was held in the U.S. due to regulatory limitations that prevented an IPO in Hong Kong.

Charles Schwab – TD Ameritrade acquisition

Charles Schwab Corp agreed on Monday to buy TD Ameritrade Holding Corp in an all-stock deal valued at $26 billion, creating a brokerage giant in a market that has been ravaged by price wars. While the deal could give Schwab an edge in the price war, analysts and anti-trust experts said the merger would face tough regulatory scrutiny, although it could still be approved.

The acquisition will shake up the retail brokerage industry, creating a company with $5 trillion in assets under management and putting smaller rivals under pressure to scout for tie-ups while the discount brokerage business is under pressure from new, nimbler startups.
 

This article was issued by Peter Petrov, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. 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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