Charting the Markets: Ferrari Under Starter’s Orders
The Shanghai Composite plunged more than 3 percent in its biggest decline in a month on Wednesday, while European equities fell for a second day. Eyes now turn to Mario Draghi’s press conference on Thursday, when we’ll all get an update from the eurozone's central banker on the ECB’s disposition to more QE. It might not make a huge difference though: European equities are going quiet. The Stoxx 600, the benchmark index for European stocks, has moved just 0.7 percent a day on average this month, the smallest moves since March. The time for stock picking has come and those in focus will be judged by the deals they do or don't do.
Credit Suisse's new CEO kicked off the long-awaited restructuring of Switzerland's ailing bank Wednesday. Among other things, Tidjane Thiam announced he will IPO the Swiss universal bank. As he embarks on his new gig, he's got to be looking at the success of his Swiss peer UBS. UBS has restructured and its share price has benefited from it. Over the last two years, UBS's stock has risen close to 20 percent, while Credit Suisse has fallen nearly as much.
Thiam, who also announced that the investment bank lost money over the past quarter, is the first of three bank bosses over the coming month to announce restructuring. It's Deutsche Bank CEO John Cryan's turn on October the 29th. Barclays is still in its initial stages. Barclays CEO candidate Jes Staley met with U.K. regulators Tuesday to get their vote. They'll have asked the former head of JPMorgan's investment bank about his plans should be approved.
Salt on the wound. It's one thing to announce you're quitting, it's another thing when investors applaud you for doing it. That's what happened at Syngenta on Wednesday. CEO Mike Mack unexpectedly announced he'll be stepping down in October. Syngenta's stock rose nearly 6%, the most in more than five months. Mack was under fire from shareholders in the world’s largest agrochemical maker for his refusal to engage with Monsanto Co. over its $47 billion takeover approach.
Fiat Chrysler's Sergio Marchionne gets to celebrate on Wednesday by ringing the opening bell at the NYSE. That's when Ferrari stock will start to trade, under the ticker RACE.
Investors who got in early agreed to pay $52 a share - at the top end of the range - for a stake in Ferrari, raising $893 million and giving the company an enterprise value of about $12 billion. Fiat Chrysler is raising more than $4 billion from taking Ferrari public. That's helped Fiat shares - which fell a tad in Europe Wednesday - rise nearly 80 percent since Marchionne announced his master plan back in October 2014. It has outperformed all major auto-industry stocks.
Fiat limited the number of shares on offer going into Wednesday's trading to ensure they're sought after in the same way its cars are. But will Ferrari maintain its sought-after appeal as it seeks to appease new shareholders? Revenue has been rising in recent years, along with the number of cars the firm makes. After sales peaked at a record 7,318 in 2012, Ferrari limited transactions to 7,000 units per year. The plan is to boost sales to 9,000 in 2019 as the carmaker goes after wealthy people in new markets, such as Chile or Indonesia.
Ryan Chilcote is a presenter on Bloomberg TV. Follow him on Twitter QuickTake @RyanChilcote
(Correction: The original version of this story mis-stated Jes Staley's position at JP Morgan. He was head of its investment bank, not of the whole business.)