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Daily Agenda: China Posts Lackluster PMI Numbers
Visa to rejoin with European sibling; Hewlett-Packard to split in two; Erdogan wins in Turkey.
After initially trading down during todays session the Shanghai Composite Index edged recouped losses to close down by 0.02 percent at 3,381.82. Commodity markets also weakened broadly as concerns about the pace of demand in developing Asia continue to be a headwind for macro narratives.
Lackluster factory activity in China. PMI figures released overnight by Chinas National Bureau of Statistics contracted with a headline reading of 49.8 in October versus consensus forecasts for 50. Meanwhile the Caixin/Markit index reading for the sector registered softer than the official measure at 48.3 for the month, improving over the six-year low of 47.2 reached in September. The Caixin index methodology is focused on smaller and mid-sized companies.
Visa acquires European operations. On Monday, Foster City, California-based Visa, the worlds largest credit-card operator, announced an agreement to purchase Visa Europe in a transaction valued at over $23 billion, after eight years of separate operations by the two companies. Payout on the transaction will be calculated over a period of time stretching for four years of consolidated operations.
Hewlett-Packard splits up. Yesterday Palo Alto, California-based Hewlett-Packard announced that it will be divided into two separate entities: HP Enterprise which will oversee the current companys software and services franchise, and HP Inc., which will operate the firms core hardware operations. The once iconic tech titan was founded in a garage in what became known as Silicon Valley in 1939.
Biotech merger announced. Irish drug company Shire on Monday announced it will acquire Burlington, Massachusetts-based biotech Dyax Corp. in a stock transaction valued at nearly $6 billion. The offer places a 35 percent premium on Dyax shares versus Fridays closing price.
HSBC results improve on lower regulatory costs. Third-quarter earnings announced Monday by HSBC Holdings included a profit of $6.1 billion, over 30 percent higher than the same period in 2014 as funds set aside for fines and legal costs subsided. Revenues were reduced for the period as the banks Chinese franchise feels the effect of sluggish growth there.
Erdogan consolidates power in Turkey. Turkeys Justice and Development Party has regained its parliamentary majority following losses in June, providing President Recep Tayyip Erdogan with a single-party mandate. Political analysts cite unease over tensions with Kurdish militant groups and the ongoing threat represented by ISIS as determining factors in the results of the runoff.