11.Dec .2020 21:43

Key Highlights in Global Financial Markets

Key Highlights in Global Financial Markets
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Key highlights in global financial markets during Last Week.

1. The biggest news of the last week was soaring IPOs of Airbnb and DoorDash. Overall, 2020 is a record year for IPOs, with a total of 129 initial public offerings taking place in 2020 compared to 110 in 2019. The latest additions were DoorDash - a food delivery company, and Airbnb – a global home-rental company.

· The IPO of DoorDash, which holds c. 50% of the US food delivery business was met with unprecedented interest from investors, with the share price increasing by an astonishing 86% to US$ 189.51 by the end of first trading day.In its initial sale, the company’s shares were priced at US$ 102, raising almost US$ 3.4bn in proceeds.

· On Thursday markets were flooded by another major IPO from Airbnb. Despite the difficulties caused by the pandemic, which forced the company to delay its planned IPO in 1Q20 and fire 25% of its workforce, the company managed to post astonishing results in its initial public offering. Just 2 weeks ago, the company’s price target was US$ 44-50 per share, which was later increased to US$ 68 for the IPO, with the company raising US$ 3.5bn in proceeds. The first day of trading saw Airbnb’s share price soaring by 115% to US$ 144.7, pricing the company at US$ 86bn.

2. Crude oil price surpassed the US$ 50 level for the first time since March. On Thursday, brent crude price rose by 4.3% to US$ 50.95/barrel, while WTI oil price reached US$ 47.6/barrel. The increase is related to the rollout of vaccinations in the UK and approval by FDA.

3. As expected, the ECB’s Christine Lagarde announced that the European Central Bank would expand its pandemic emergency bond-buying programme by another € 500bn from €1.35tn to €1.85tn and extend it to March 2022. The news caused EUR to climb by 0.5% to its high of the year. The ECB also said that Eurozone economy is expected to contract by 2.2% in 4Q20. Furthermore, 2021 economic growth forecast was lowered to 3.9%, assuming no post-Brexit trade deal between the UK and EU.

Source - Galt & Taggart