Dear rss free blog,
Don’t
worry, Israel. Australia stands besides you! The Reserve Bank of
Australia today raised interest rates to 3.25% from 3%. It became the
first OECD country to tighten monetary policy, although Israel did
this in August.
Expect more short covering. Shorts
had to cover yesterday because the Institute of Supply Management
reported higher services orders, the first score showing expansion of
demand (above 50) in a year. At 50.8, it was ahead of expectations.
One
boost for equity markets has been initial public offerings
particularly from emerging market companies. When analysts try to
explain the post-March rise in stock markets globally, they often
cite short-covering and liquidity. We reported some liquidity data in
yesterday’s newsletter showing a trend toward buying emerging markets
stocks. We saw short covering post-ISM pushing the Dow up yesterday.
Other
factors include the spate of mergers and acquisitions, which add to
the animal spirits of stock markets. And do not forget ipo’s. Ernest
& Young reporte that in Q3, the number of new issues nearly
doubled sequentially. There were 149 new issues in Q3 vs a mere 76 in
Q2. An amount of $378 bn was raised, up 292% sequentially, and the
highest level since Q2 2008, the halcyon days before Lehman collapsed.
At
all levels of issue size, by volume and value, Chinese issues
accounted for about 2/3 of the total, most listed in Hong Kong or
Shanghai, E&Y says.
Among
the new issues coming to Wall Street, which only lured in 18% of
ipo’s in Q3, is a big one in Q4: Banco
Santander do Brazil,
being partly spun off by Santander,
the Spanish bank. It already has two Big Board shares, for itself, as
STD, and for its Banco
Santander de Chile,
SAN. The new one will be traded as BSBR, according to Hoover’s
newsletter covering ipo’s.
Frida
Ghitis will cover for me when I am cruising down the Amazon between
Christmas and New Year.
