Watches of Switzerland said it planned to seek a market capitalisation of up to £660m in its upcoming initial public offering in London as it seeks to pay off some of its debt. The UK’s largest luxury watch retailer intends to sell shares in a range between 250-277p each, which would bring its value to between £610m and £660m, the company said on Tuesday. It plans to raise at least £200m, it said, which excludes a 10 per cent “greenshoe” option, a mechanism that would aim to bring in extra proceeds. Watches of Switzerland, which accounted for half of all Rolex timepieces sold in the UK in 2018, seeks a premium listing on the London Stock Exchange, comprising new and existing shares. The retailer has been expanding in recent years and entered the US market in late 2017. It has 21 stores there as well as its 125 UK outlets. Its pricing would bring it to 13 to 14 times the price/earnings ratio on net income for April 2020 forecast at £47m. The group intends to use the net proceeds to reduce leverage to about £120m of net debt, it said. Apollo Global Management, which owns over 90 per cent of the company, would reduce its holding but retain a controlling stake. At least 25 per cent of the company’s shares would be freely traded under the proposal. The group generated sales of £746m in the 12 months to January 27. It held a 35 per cent share of the UK luxury watch market by total value of sales in 2018, and a 41 per cent share when brand-owned stores are excluded. The group said when it initially announced its plans to list that Barclays and Goldman Sachs International would act as joint global co-ordinators, bookrunners and sponsors, while BNP Paribas and Investec would act as joint bookrunners. Rothschild is acting as financial adviser.
Archives of “May 2019” month
rssCable falls below 1.2700 as dollar holds firm
GBP/USD extends drop to below 1.2700 now
The dollar is trading higher at the start of the European morning session as it is advancing against the rest of the major bloc, with cable notably falling below 1.2700 to its lowest level since 15 January. Price now is contending with support around 1.2696 but given the trend, it’s hard to argue against the adage of ‘don’t catch a falling knife’.
As mentioned last week, the Brexit quandary looks like it will continue to run its course and with political headwinds still remaining, the argument continues to be that things should get worse for the pound before they get any better.
There is some minor support seen next around 1.2660-70 but at this stage, it’s hard to bet against any solid bounce in cable unless the dollar itself capitulates. Because buyers sure won’t get any help from the pound side of the equation, given the current Brexit situation.
China: A trade deal should be based on equality, mutual benefit
Comments by China’s foreign ministry
- Says that foreign investors are still enthusiastic about China
Nothing too notable coming out from China so far today. Markets are in a more relaxed state as the US is scaling back on earlier sanctions against Huawei but the optimism is one that carries caution alongside it still.
New OPEC+ meeting dates reportedly being considered: 1-2 July or 22-23 June
According to Energy Intelligence’s senior correspondent, Amena Bakr
The original dates for the OPEC+ meeting in Vienna was scheduled for 25-26 June but it is believed that the Russian delegation has requested for the dates to be changed.
Hence, suggestion is that the meeting could be move to either of the two dates highlighted in the headline above. No firm decision has been made yet though, so just keep this in your back pocket for now.
Huawei not impressed with the temporary reprieve from the US
China state media report comments from Huawei founder Ren Ahengfei
- says US’s temporary reprieve does not mean much for Huawei –
- says Huawei has made preparations regarding the latest US. actions
- we have faced US restrictions since a year earlier
- the issue is with the US government, not with US firms
- US government is underestimating Huawei’s capabilities
Fighting words …
Bitcoin dominance is at 60%. It is currently highest it has been since December 2017.
Iran’s Rouhani says he favours talks and diplomacy, but not right now
Hassan Rouhani, Iranian President
- says he favours talks and diplomacy
- but under current conditions does not accept it
- situation not suitable for talks and out choice is resistance only
Singapore Q1 GDP +3.8% q/q (expected +2.3%) (annualised)
A beat for first quarter economic growth in Singapore
The y/y is not quite so good, comes in at +1.2% y/y, vs. expected of 1.5%.
Singapore MTI has revised down the 2019 GDP growth forecast to 1.5 to 2.5% (previous forecast 1.5 to 3.5%)
US President Trump says Iran has been very hostile, but he’d like to have talks with them
Trump with some remarks on Iran.
- says Iran has been very hostile
- would like to have talks with Iran when they are ready
- Iran would be making a very big mistake if they did anything
- No indication they are
- Would be met with ‘great force’
He also comments on a US judge ruling re his tax returns being released to Congress.
“Preparing for the next recession: 9 things you need to know”
Doing a bit of a scan about and found this, might be of interest.
I am not familiar with Capital Ideas (the piece is on their blog) but its this is an interesting read.
- With the U.S. expansion nearly 10 years old, investors may be wondering whether the next one is just around the corner.
- In our view, we don’t believe a recession is imminent in 2019. Our research indicates it is much more likely that the next recession will be in 2020 or 2021.
- But economic cycles are notoriously hard to predict, and it’s never too early to be prepared for the next downturn.