In today’s top stories, Geely plans for its EV brand Zeekr to go public, Sony sees a sales boost for its PlayStation 5, and worried investors are analysing Paytm’s share buyback programme. Elsewhere, Oppenheimer analysts say the S&P 500 could rally next year, while in China, pharmaceutical stocks rally on COVID restrictions easing.
Chinese premium EV brand eyes IPO
The parent company of Swedish carmaker Volvo [VOV-B.ST], Geely [0175.HK], has reportedly filed to take its premium EV brand public in the US. Reuters reported that Zeekr, whose competitors include Nio [9866.HK] and Xpeng [XPEV], is eyeing a valuation over $10bn, and Geely hopes to raise $1bn through the IPO. It would be the first major listing of a Chinese company in the US since Beijing and Washington struck a deal to share audits.
Sony’s console availability improving
Since the PlayStation 5 launched in November 2020, consumers have struggled to get their hands on units. Supply chain and chip shortage woes have started to ease, boosting Sony’s [6758.T] hardware sales. “PlayStation 5 was November’s best-selling hardware platform in both unit and dollar sales,” thanks to a “significant” year-over-year increase in console availability, NPD analyst Mat Piscatella told Bloomberg.
Chinese pharmaceutical and funeral stocks rally
As the Chinese economy emerges from its zero-Covid slump, concerns that the virus will spread following the abandonment of mass testing and quarantining are boosting pharmaceutical stocks. Fears that there could be a spike in COVID-related deaths have also led funeral stocks to rally. In response to the US CHIPS and Science Act, China is designing a $143bn package for chipmakers to boost domestic production.
S&P 500 could hit 4,400 next year
There’s much debate about when the S&P 500 might bottom, but Oppenheimer chief investment strategist John Stoltzfus believes it could hit 4,400 next year, up from 3,990.56 at Monday’s close. In the investment firm’s 2023 outlook, Stoltzfus argued that “[a] key factor in achieving success this cycle will be the Fed’s terminal rate.” The average end-of-2023 target among major firms is 4,140, according to a survey by CNBC.
Paytm buyback worries investors
The buyback programme announced by Indian fintech Paytm [PAYTM.NS] has got investors feeling nervous. Losses widened in Q2 2023 as it continued to invest heavily in expanding its services, and the company’s share price is down 60.2% year-to-date. Karthick Jonagadla, the founder of Quantace Research, told Bloomberg, “For the buyback to work, the company may need to pay 30% [to] 40% premium over [the] current price. Otherwise, it may not serve the purpose.”
Disclaimer Past performance is not a reliable indicator of future results.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.
*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.