News & Analysis

Post-IPO Alphawave tanks at a time of massive highs in London and New York. What’s going on?

Andrew Saks, Friday, 14 May 2021

It appears that the most prestigious indices on both sides of the Atlantic are unstoppable at the moment.

Quite contrary to all of the high-profile speculation yesterday about Britain's potential entry into a period of high inflation that has not been experienced since the financial crisis of 2008, the FTSE 100 is absolutely rocketing again.

During the past month, the FTSE 100 has been regularly closing at a higher level than any time since March 2020, and stocks which are listed as the highest rated among publicly traded British companies have been a major focus for all market participants.

Yesterday, the notion that potential inflation may create a downturn in the value of a range of tradeable assets has been absolutely quashed this morning, as the FTSE 100 has risen to a staggering 7,007 points, despite the enormous clamour about inflation across the news yesterday.

Perhaps along the lines of our view, which we shared on our Vlog yesterday, the speculation was exactly that - speculation. In today's world of astute observation, it takes more tangible metrics to cause a very stable upward direction to change.

Among the publicly listed stock that made significant gains in value this morning is Sage Group, the multinational software company which was founded in 1981 in Newcastle-Upon-Tyne that in its early years was famous for accountancy software and is now recognized as a comprehensive enterprise solutions firm.

The price of Sage stock rose 2.6% overnight.

On the other end of the scale is long-established exploration and mining company Rio Tinto, whose shares fell by 2.3%, however all eyes have been on portfolio management service provider Sanne Group whose stock rose by a massive 28% after it turned down an approach to be acquired by Cinven, a private equity investor.

Spread betting quotes today indicate that the FTSE 100 will open 42 points to the good at 7,005 which is still at yearlong high levels.

On the other side of the Atlantic, commentators and traders are suggesting that there are two Dow Jones stocks that could create a new rally, those being Intel and Cisco, both IT infrastructure and hardware giants. The rationale is that it is possible that investors may look back at the performance of technology stocks at a time during which these are down in value.

Those that dominated the highs earlier this week were mining, chemicals and manufacturing giant 3M, retail pharmacy chain Walgreens and pharmaceutical giant Proctor & Gamble.

The Dow Jones hit an all time high on Monday this week, before tailing off slightly at the end of the day.

Given the FTSE 100's huge gains lately, it has been suggested that the FTSE 100 index is not currently favouring technology listings, an example of this being the IPO of chip manufacturer Alphawave this week, whose shares dived 20% in value on the day of its listing in London.

 

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