Address

Precise Investors

Thursday, June 17, 2021
Stocks & Shares

Telecom boosts European stocks

Telecom boosts

Sunrise Communications surged to a record high, as a US$7.40 billion takeover offer for the Swiss firm lifted the telecom sector

European stocks rallied on Wednesday as a US$7.40 billion takeover offer for Swiss firm Sunrise Communications boosted the telecom sector and investors looked past a collapse in Britain’s quarterly economic output to bet on a stimulus-driven recovery.

The pan-European STOXX 600 closed 1.1% higher, marking its fourth consecutive day of gains and settled near a three-week high. Wall Street’s benchmark S&P 500 headed for a record high boosted by technology stocks.

Sunrise Communications surged 26.8% to a record high, after US firm Liberty Global launched a takeover offer for the company in a deal valued at 6.8 billion Swiss francs (US$7.40 billion).

Shares in German telecoms investor Freenet, Sunrise’s largest shareholder, jumped 16.8%, while the broader sector gained 1.7% to lead sectoral gains.

Consolidation between operators would be positive for the industry as it would reduce competitive pressure on prices and improve the return on capital, Domenico Ghilotti, an analyst at Equita wrote in a note.

Meanwhile, London’s FTSE 100 jumped 2% as investors focused on signs of a recovery in economic output in June, shrugging off a record 20.4% plunge in the second quarter, the largest contraction reported by any major economy.

June output grew by 8.7% from May, just above economists’ average expectation in a Reuters poll for an 8% rise.

It’s been widely expected that the UK will be in a recession. But the fact that May number was upgraded and the June number was better than expectations, is offering a little bit of encouragement, said Russ Mould, investment director at AJ Bell.

Markets are more interested in debating the pace of the recovery, Mould said.

Stock markets globally have rallied this week on improving data from China and Europe, signs of progress in developing a Covid-19 vaccine and expectations of fresh US stimulus.

But US House Speaker Nancy Pelosi said Democrats and the Trump administration remained far apart regarding any agreement over further economic aid.

Among other individual movers, Dutch bank ABN Amro jumped 8.1%, after it said its corporate bank will retreat to northwest Europe, exiting the United States, Asia, Australia and Brazil as it joins a growing list of banks restructuring their commodities business to cut risk.

European food-ordering firm Just Eat Takeaway.com NV rose 3.2% after reporting higher revenue and underlying profit for the first half of 2020.

British online fashion retailer ASOS jumped 13.3%, as it forecast full-year sales and profit significantly ahead of market expectations.

Important:

The articles are for information purposes only and Precise Investors shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.

Precise Investors does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

Leave a Reply

10 + sixteen =