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Lyft Fails to Lift-off on Second Day of Trading - EMEA Brief 02 Apr

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  • Lyft, the most recent high profile IPO, shares have seen huge trading activity over the first two days of trading as over 41.5 million shares were traded, well over the 32.5 million offered in the IPO. However, the ride-hailing company saw it's shares slump 12% on its second day of trading down to $69.01, below the official IPO price of $72. The downturn comes after the stock rallied to a high of $88.60 on Friday.
  • US equities surged on Monday due to strong manufacturing data as factory activity rose and construction spending hit  9-month high. The Dow was up 330 points, closing above 26,000 for the first time since February, followed by the Nasdaq which rose 1.3%. The S&P 500 mirrored the strong performance and increased by 1.2%.
  • Asian shares have lost momentum after Monday's equity rally, Hong Kong's Hang Seng and the MSCI Asia Pacific Index were both flat. The ASX 200 jumped 0.4% whereas the Topix index fell 0.3%.
  • Sterling depreciated 0.3% against the dollar to $1.3070 as MPs rejected all four Brexit proposals yesterday with Ken Clarke's customs union proposal narrowly missing a majority by 3 votes. Mrs May has scheduled a five hour cabinet meeting today to discuss the next steps for Brexit
  • Oil climbed to fresh 2019 highs due to the possibility of further sanctions on Iran, WTI futures rose 0.5% up to $61.89 per barrel whilst Brent crude also rose 0.5% to $69.33.
  • Gold remained little changed at $1,288.36 per troy ounce.

Asian overnight: A significantly calmer session overnight saw Asian markets tentatively gain ground, with the residual effect of weekend Chinese PMI gains continued to have an effect. The big overnight event came in Australia where the RBA decided to keep interest rates steady despite calls to cut amid a weakening housing markets and credit squeeze. Despite the fall in housing price, we saw an incredible 18.1% rise in building approvals for February; the highest since 2012.

UK, US and Europe: Last night saw the UK parliament once again reject all options ahead of them, raising the likeliness that Theresa May will try to bring her plan back for yet another try. This morning we see the UK construction PMI released, coming off the back of yesterday’s impressive manufacturing figure. In the afternoon, keep an eye out for the US core durable goods figure.

South Africa: Global equity markets look to be catching their breathe today after yesterday's strong gains. US Index futures are marginally lower while Asian indices are marginally higher this morning. The dollar is slightly firmer while precious and base metal prices trade mostly lower. The rand, although off its best levels remains firm after recent news that South Africa has managed to avert a credit rating downgrade (for now). Tencent Holdings is up 0.3% in Asia, suggestive of a similar start for major holding company Naspers. The BHP Group is flat in Australia suggetsive of a modest opening for local diversified resource counters.

Economic calendar - key events and forecast (times in GMT)

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Source: Daily FX Economic Calendar

9.30am – UK construction PMI (March): expected to fall to 49.1 from 49.5. Markets to watch: GBP crosses

10am – eurozone unemployment rate (February): jobless rate to hold at 7.8%. Markets to watch: EUR crosses

1.30pm – US durable goods orders (February): orders expected to fall 1.2% MoM, but rise 0.2% MoM excluding transportation. Markets to watch: US indices, USD crosses

Corporate News, Upgrades and Downgrades

  • BHP Billiton said that it was reassessing its full-year output and cost guidance following the impact of Tropical Cyclone Veronica. The cyclone has reduced production by around 6-8 million tonnes. 
  • Galliford Try has signed an agreement with Homes England to build more than 850 houses across England. 
  • Ryanair said that passenger growth was 9% overall for March, to 10.9 million. 
  • The US safety authoritiyes are set to investigate Kia and Hyundai vehicles amid thousands of reports of "non-crash fires", which could see mass vehicle recalls.
  • Boeing is set to apply a software upgrade to its disaster-struck 737 Max aircraft model in the next few weeks after initially informing airlines that the new software would be ready by the end of March.
  • Struggling womenswear brand Bonmarché has been bought out by retail billionaire Philip Day in a deal worth £5.7m. Philip Day's holding company issued the following statement "Against the backdrop of the significant decline in Bonmarché's profitability, Spectre believes it is well positioned to provide advice, guidance and support to secure the long term future of the Bonmarché business, its stores and employees".

Anglo American upgraded to buy at Deutsche Bank
EasyJet upgraded to hold at Berenberg
Vallourec upgraded to buy at SocGen

Atos downgraded to sell at Berenberg
RELX downgraded to add at AlphaValue
Deutsche Post downgraded to neutral at Citi
Engie downgraded to sector perform at RB

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Information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary

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