Monday, 18th July: Major news at the European opening this morning was the agreement for Japan’s Softbank to acquire the UK semiconductor firm ARM Holdings. ARM supply the chips used in iPhones and Samsung Galaxys and the proposed deal looks set to be worth over $32bn with Softbank paying £17 per share in an all-cash deal. The recently appointed Chancellor of the Exchequer Philip Hammond has welcomed the agreement, claiming it shows that “Britain is open for business”, more than 3 weeks after the EU referendum result (UK politicians have more recently objected international takeovers, including Pfizer’s failed bid to buy AstraZeneca and the completed takeover of Cadbury by Kraft). The intended acquisition would be the largest investment ever from Asia in to the UK. The agreement also comes with a guarantee that jobs at the Cambridge based chip-designer will double their employment figures in the next 5 years. ARM shares shot to the top of the FTSE 100 where it positioned itself for the day with gains of more than 42%.
Travel firms have suffered yet another setback as shares fell following the attempted coup in Turkey on Friday evening. The sector is suffering from a lack of passenger confidence and a slow down in bookings. European airlines cancelled several flights on Friday evening and through Saturday, before resuming travel at the request of the Turkish president. Thomas Cook and TUI, (the former who have suffered heavily on the back of geo-political unrest), offered free changes or cancellation to customers who were due to fly over the weekend but otherwise, government advice has not changed regarding travel to the country. Thomas Cook fell more than 5% in morning trading before paring back to close the day -0.86%. TUI fell to the bottom of the FTSE 100 in afternoon trading and closed the day -1.98%. Despite cancelling all flights to Turkey on Saturday, International Consolidated Airlines, the parent company of British Airways fared relatively well (despite software issues over the weekend), trading positively during trading, closing the day +1.94%.
It was a mixed session in Europe as the FTSE 100 closed higher by 0.43% but markets in the CAC in France closed -0.34% whilst the the DAX in Germany closed -0.04%. Brent oil has fallen -1.43% (at the time of writing), moving further below $50/bbl. The Dow Jones and the S&P 500 are both trading marginally in the green.