Market Event, General

Week in Review: the IPO that never was

Annie Charalambous, Friday, 6 November 2020

MKT-7014_WR-IPO-Election_blog

As we get into the final stretch of a year we won’t soon forget, this week was expected to be one for the books. Between regulators pulling the brakes on what would have been the largest IPO on record, and now being three days into election night, the week went awry as quickly as it started.

Below, we take a closer look at some of this week’s market stories…

Alibaba takes the hit on Ant IPO

Alibaba’s finance arm and Alipay parent company, Ant Group, was set to start trading in both Hong Kong and Shanghai this week in what would’ve been a $37 billion IPO -- the largest to date.

All that came to a sudden halt after regulators cited major, albeit vague, issues with the listing. While still unclear on where it all went wrong, what we do know is that this pushes any listing back by up to 6 months. Alibaba (BABA) shares fell 10% off the back of the announcement.

Alipay is a force to be reckoned with, boasting user numbers exceeding 1 billion, which is in part where its >$300 billion valuation comes from. We’ll be watching as more of the story unfolds in the weeks and months ahead.

Bank of England’s £150 billion stimulus package

On Thursday, the Bank of England held its interest rate steady but topped up its stimulus program to the tune of £150 billion, bringing the total QE to a staggering £895 billion.

All part of a larger effort to boost an already-weakened economy, the central bank’s governor, Andrew Bailey, explained the decision came as a reaction to the country being forced back into lockdown. Confirmed cases top 1.12 m across the United Kingdom, with new figures in October coming in at double and even triple September’s daily numbers.

The BoE added that the economy was unlikely to reach pre-pandemic levels before 2022, and unemployment is expected to soar to as much as 7.75% by next summer.

The cable was up slightly on Thursday, while the FTSE100 has, at the time of writing, gained 6% during this trading week.

Jobs come in hot

Moving back across the pond, the US Bureau of Labor Statistics published its monthly Employment Situation report today, or what we know as the nonfarm payroll jobs data. 

After a tumultuous year in which millions of jobs were lost, and millions of Americas filed for benefits, we saw a sixth consecutive month of gains, with +638k new jobs added in October (beating analysts’ 600k consensus). The unemployment rate also improved, down to 6.9% from 7.9% the previous month.

Temporary layoffs fell by 1.4 million people, while the number of those who are long-term unemployed (27+ weeks) rose by 1.2 million. The sectors that saw the biggest job gains are Leisure and Hospitality (+271k), professional and business services (+208k), and retail, which saw 108,000 new jobs filled. 

Movers & shakers

🔺The tides have turned for cruise lines as public health officials say the industry can begin to reopen. Norwegian Cruise Line (NCLH) and Carnival Corp (CCL) gained ~9.5% since last Friday, while Royal Caribbean (RCL) is up 12% over the same 1w period.

For more on this story, visit MarketWatch

🔻 Hanesbrands Inc (HBI), the parent company of apparel brands Champion and Playtex,  tanked over 18.5% Thursday after posting quarterly earnings and projecting weaker numbers over the upcoming holiday season. For more, visit The Motley Fool

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