Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


While you were sleeping: Acquisition optimism

While you were sleeping: Acquisition optimism

(BusinessDesk) August 16 - Investors began the week on a cautiously optimistic note, lifting equities on both sides of the Atlantic, helped primarily by Google Inc’s unexpected $US12.5 billion offer to buy Motorola Mobility Holdings Inc.

In late trading, the Dow Jones industrial average gained 1.63%, the Standard & Poor's 500 Index rose 1.86% while the Nasdaq Composite Index advanced 1.35%.

Europe’s Stoxx 600 Index ended the day with a 0.2% gain, with gains in London, Frankfurt and Paris ahead of tomorrow’s Paris meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy.

The acquisition news shows there’s some confidence in the market, but investors should anticipate more volatility, Thomas Villalta, portfolio manager for Jones Villalta Asset Management in Austin, Texas, told Reuters.

“Europe has been extraordinarily slow in taking any sort of decisive action to improve perceptions ... that means to me we could have volatility through the end of the quarter,” Villalta said.

Shares in Motorola Mobility soared more than 50% after Google offered to buy the mobile phone maker for US$12.5 billion cash in a bid to bolster its Android mobile operating system.

The move fuelled speculation of other takeovers in the industry, boosting stocks including Research in Motion and Nokia.

While the overall trend for U.S. stock prices should remain lower, levels of volume, volatility, breadth and sentiment were signalling a bounce, John Kosar, director of research at Asbury Research in Chicago, told Reuters.

"Until those extremes get unwound, the market is likely to carry a bid for the near terms," Kosar said.

In currency markets, the Swiss franc plunged against the euro, putting it on track for its biggest three-day decline since the European currency’s 1999 debut on speculation Switzerland will do more to check the franc’s appreciation amid investors’ appetite for safe-haven investments.

“Given the strength of the franc, they’re trying to think of everything,” Brian Kim, a currency strategist at Royal Bank of Scotland Group Plc’s RBS Securities unit in Stamford, Connecticut told Bloomberg News. “It’s tough to say at this point if whatever actions they take can reverse the safe-haven flows.”

The franc shed 2.2% to 1.1331 per euro at 2.56pm in New York.

Meanwhile, the Japanese yen weakened against the euro as well amid signs Japan is about to intervene again to curb the currency’s strength.

“I will continue to closely watch the markets and take bold action if it becomes necessary,” Finance Minister Yoshihiko Noda said yesterday during a television talk show on the public broadcaster NHK.

Japan’s economy shrank at a 1.3% annual pace in the three months through June, the third quarter of contraction, government data showed yesterday.

And lest investors think the U.S. Federal Reserve has moved to the sidelines, Atlanta Fed President Dennis Lockhart says that isn’t the case.

“If additional actions are required, I can assure you the Federal Reserve is not out of bullets,” Lockhart said today in a speech in Florence, Alabama.

“Expansion of the balance sheet or changes in the composition of the Fed’s asset portfolio are available, in my view. These could be quite effective, particularly if done in sufficient size, in the event that the economy retreats back into contractionary territory.”


© Scoop Media

Business Headlines | Sci-Tech Headlines


Maritime Union: Deepening Supply Chain Crisis Requires Action

Maritime Union of New Zealand National Secretary Craig Harrison says the global COVID-19 pandemic exposed pre-existing weaknesses in our logistics sector, and created enormous problems... More>>

Air New Zealand: Employees Recognised With $1,000 Share Award

The efforts Air New Zealand employees made during one of the airline’s toughest years will be recognised via an award of $1,000 worth of company shares to all permanent employees... More>>

Consumer NZ: Bank Complaints On The Rise, Survey Shows

Nearly one in five Kiwis had a problem with their bank in the past year, Consumer NZ’s latest satisfaction survey finds. Consumer NZ chief executive Jon Duffy said the number of bank customers reporting problems had jumped to 18%, up from 11% in 2020... More>>

Mercury: Enters Into Binding Agreements To Acquire Trustpower’s Retail Business

Mercury NZ Limited (Mercury) has announced that it has entered into binding agreements with Trustpower Limited (Trustpower, NZX:TPW) to acquire Trustpower’s retail business for NZ$441 million... More>>


ASB: New Zealanders Missing Out On Hundreds Of Millions In KiwiSaver Government Contributions

New Zealanders have just over a week to ensure they’re eligible for the maximum annual government KiwiSaver contribution... More>>

Stats NZ: GDP Climbs 1.6 Percent In March 2021 Quarter Following December Dip

Gross domestic product (GDP) rose by 1.6 percent in the March 2021 quarter, following a 1.0 percent fall in the December 2020 quarter, Stats NZ said today. "After an easing of economic activity in the December quarter, we’ve seen broad-based growth in the first quarter of 2021... More>>