StockWatch: Week of November 29 – December 03

Boeing Airworthiness

The Civil Aviation Administration of China (CAAC) released on Thursday an Airworthiness Directive [1], which outlines actions needed to be taken by airlines, in order to put Boeing's 737 Max in the air again. This is seen as opening the door to resume flights of the grounded planes.

The 737 Max was grounded by Chinese and other authorities, after two fatal crashes in 2018 and 2019. The US Federal Aviation Administration (FAA) had also grounded these planes, but lifted the ban a year ago. [2]

BA.us jumped on the news on Thursday, following it 2021 lows in the previous day.


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Nvidia-Arm Deal Complaint

The proposed $40 billion acquisition of Arm Limited by Nvidia, has raised concerns in multiple regions, including the UK, since its announcement back in September 2020.
The latest episode in this regulatory saga, came on Thursday from the US Federal Trade Commission (FTC), which filed a complaint to block the deal.

Facebook-Giphy Scrutiny

On Tuesday, the Competition and Markets Authority (CMA) in the UK, instructed Facebook (Meta) to sell GIPHY. The regulator had previously fined the US firm over the deal, which had been completed over a year ago.

FB.us has been having a bad week, losing around 8% at the time of writing.


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Car Maker Deliveries

Electric vehicle makers Nio and Xpeng announced on Wednesday impressive deliveries for the month November, with 10,878 and 15,613 units respectively. NIO.us and XPEV.us were having a bad week, despite those results, amidst concerns for US listed Chinese firms.

Ford Motors followed a day later, reporting 158,793 Total Sales in the US last month, up 5.9% year-over-year, but lower compared to October's 175,918 vehicles. On the electric front, the company sold 11,116 electrified vehicles. [3]

Didi Delisting

The Chinese ride-hailing firm announced on Thursday it will be delisting from the New York Stock Exchange, noting that the shares "will be convertible into freely tradable shares of the Company on another internationally recognized stock exchange" pointing at a listing elsewhere. [4]

Didi had been a publicly traded company for less than six months, but has been at loggerheads with Chinese regulators. In July, the Cyberspace Administration of China (CAC) had ordered the firm to take down 25 apps in China. [5]

Jack Dorsey

The co-founder of Twitter (TWTR.us) was in the news this week, primarily because he stepped down as Chief Executive Officer (CEO) of the company on Monday. Parag Agrawal became his successor, having been with the firm for more than 10 years and served Chief Technology Officer since 2017. [6]

Twitter's stock had initially reacted higher on the news but ended Monday with losses, hitting fresh 2021 lows on Friday.

Jack Dorsey is now CEO of just one Nasdaq listed company - payment firm Square (SQ.us) - which changed its name to Block. As per Wednesday's press release, the name change distinguishes the corporate entity from its businesses, or building blocks. There will be no organizational changes, and Square, Cash App, TIDAL, and TBD54566975 will continue to maintain their respective brands. [7]

Afterpay

Back in August, Block (then still Square) had submitted an acquisition proposal of Australian Buy Now Pay Later (BNPL) firm Afterpay (APT.au) for approximately A$39 billion. Square shareholders had approved the deal in early November and those of Afterpay were scheduled to meet on November 6.

However, this meeting was postponed on Thursday, as approval of the deal by Bank of Spain has not yet been granted. Despite that, the two firms still expect the deal to be implemented during the first quarter of the next year. [8]

After the meeting delay announcement, APT.au dropped to its lowest level since June (95.83)


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Woolworths - Wesfarmers Battle

The Australian grocery giant, submitted on Thursday a proposal to acquire Australian Pharmaceutical Industries (API) for A$1.75 per share (total equity value of $872 million).

API had agreed, in November, at a buyout bid from Wesfarmers Ltd (WE.au) for much lower A$1.55 per share, the latter already owning 19.3% of API. As per the relevant press release, shareholder of Australian Pharmaceutical Industries, were expected to vote on the deal in Q1 2022. [10]

The Pharmacy Guild of Australia was less than thrilled to the prospect of Woolworths buying out API, saying that many questions have to be answered. [11]
Stocks of both Woolworths (WOW.au) and Wesfarmers (WES.au) ended the week lower.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 03 Dec 2021 https://amos.caac.gov.cn/ns_traincad/ns_train_cad/publicQuery/view

2

Retrieved 03 Dec 2021 https://www.faa.gov/foia/electronic_reading_room/boeing_reading_room/media/737_MAX_Rescission_of_Grounding_Order.pdf

3

Retrieved 03 Dec 2021 https://s23.q4cdn.com/799033206/files/doc_news/2021/12/November-2021-Sales-Release-Final.pdf

4

Retrieved 03 Dec 2021 https://ir.didiglobal.com/news-and-events/news/news-details/2021/DiDi-Announces-Recent-Developments/default.aspx

5

Retrieved 03 Dec 2021 https://ir.didiglobal.com/news-and-events/news/news-details/2021/Didi-Announces-Takedown-of-Additional-Apps-in-China/default.aspx

6

Retrieved 03 Dec 2021 https://s22.q4cdn.com/826641620/files/doc_news/2021/11/11-29-21_TWTR_Announcement.pdf

7

Retrieved 03 Dec 2021 https://investors.block.xyz/news/news-details/2021/Square-Inc.-Changes-Name-to-Block/default.aspx

8

Retrieved 03 Dec 2021 https://corporate.afterpay.com/investors/asx-announcements

10

Retrieved 03 Dec 2021 https://www.wesfarmers.com.au/docs/default-source/asx-announcements/wesfarmers-and-api-enter-into-scheme-implementation-deed.pdf

11

Retrieved 12 Aug 2022 https://www.guild.org.au/news-events/news/2021/woolworths-bid-for-api-many-questions-have-to-be-answered

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