Connect with us

Business

Chipmaker GlobalFoundries valued at $26 billion in lackluster debut

Published

on

October 28, 2021

(Reuters) -Shares of GlobalFoundries Inc, which is owned by Abu Dhabi’s sovereign wealth fund Mubadala Investment Co, opened flat on Nasdaq on Thursday, giving the chipmaker a market capitalization of about $26 billion.

GlobalFoundries priced its IPO, which is the third largest in the United States so far this year, at $47 a share. Only South Korean e-commerce giant Coupang and ride hailing company Didi Global have had larger stock market floats this year.

GlobalFoundries, which disclosed a 13% revenue growth for the six months ended June 30, has benefited from surging demand for chips, due to a global shortage that has forced automakers and other electronics firms to cut production.

Advertisement

Moreover, the IPO market in the U.S. has never been stronger, numerous other big names such as Coinbase Global Inc, Robinhood Markets Inc and gaming platform Roblox have already gone public this year. Electric-vehicle maker Rivian is also expected to list its shares in the coming weeks.

U.S. IPOs have raised an all-time record of over $250 billion so far this year, according to data from Dealogic.

GlobalFoundries was created when Mubadala bought Advanced Micro Devices Inc’s manufacturing facilities in 2009 and later merged it with Singapore’s Chartered Semiconductor Manufacturing Ltd.

The company, which makes radio-frequency communications chips for 5G, automotive, and other specialized semiconductors, counts AMD and Broadcom Inc among its customers.

GlobalFoundries is the world’s third-largest foundry by revenue behind Taiwan Semiconductor Manufacturing Co Ltd and Samsung Electronics Co Ltd, but ranks second when factoring out Samsung’s foundry business that makes chips for other elements of the South Korean firm.

Advertisement

Mubadala, which has a majority stake in GlobalFoundries, will hold 89.4% of the company’s shares and voting power after the offering.

Funds affiliated with Silver Lake have bought nearly $75 million worth of shares as part of a so-called private placement held alongside the IPO.

Morgan Stanley, BofA Securities, J.P. Morgan, Citigroup and Credit Suisse are the lead underwriters for the IPO.

(Reporting by Niket Nishant, Anirban Sen and Noor Zainab Hussain in Bengaluru; Editing by Shounak Dasgupta)

Advertisement
Continue Reading
Advertisement

Business

U.S. stock futures, oil regain some ground after Omicron battering

Published

on

November 29, 2021

By Wayne Cole

SYDNEY (Reuters) – Asian markets regained a little composure on Monday as investors settled in for a few weeks of uncertainty on whether the Omicron variant would really derail economic recoveries and the tightening plans of some central banks.

Oil prices also bounced $3 a barrel to recoup some of Friday’s shellacking, while the safe haven yen took a breather after its run higher.

Advertisement

The new variant of concern was found as far afield as Canada and Australia as more countries imposed travel restriction to try to seal themselves off.

Britain called an urgent meeting of G7 health ministers on Monday to discuss developments on the virus, although a South African doctor who had treated cases said symptoms of Omicron were so far mild.

“There is a lot we don’t know about Omicron, but markets have been forced to reassess the global growth outlook until we know more,” said Rodrigo Catril, a market strategist at NAB.

“Pfizer expects to know within two weeks if Omicron is resistant to its current vaccine, others suggest it may take several weeks. Until then markets are likely to remain jittery.”

Trading was erratic early on Monday but there were signs of stabilisation as S&P 500 futures added 0.8% and Nasdaq futures 0.9%.

Advertisement

Both indices suffered their sharpest fall in months on Friday with travel and airline stocks hit particularly hard.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.1% but was off early lows. Likewise, Japan’s Nikkei pared early losses to be down 0.9%.

Bonds gave back some of their gains, with Treasury futures down 11 ticks. The market had rallied sharply as investors priced in the risk of a slower start to rate hikes from the U.S. Federal Reserve, and less tightening by some other central banks.

Two-year Treasury yields edged up to 0.55%, after falling 14 basis points on Friday in the biggest drop since March last year. Fed fund futures had pushed the first rate rise out by a month or so.

The shift in expectations undermined the U.S. dollar, to the benefit of the safe haven Japanese yen and Swiss franc.

Advertisement

Early Monday the dollar had steadied somewhat at 113.81 yen, after sliding 1.7% on Friday. The dollar index held at 96.190, after Friday’s 0.7% drop.

The euro paused at $1.1294, following its rally from $1.1203 late last week.

European Central Bank President Christine Lagarde put a brave face on the latest virus scare, saying the euro zone was better equipped to face the economic impact of a new wave of COVID-19 infections or the Omicron variant.

The economic diary is also busy this week with China’s manufacturing PMIs on Tuesday to offer another update on the health of the Asian giant. The U.S. ISM survey of factories is out on Wednesday, ahead of payrolls on Friday.

Fed Chair Jerome Powell and Treasury Secretary Janet Yellen speak before Congress on Tuesday and Wednesday.

Advertisement

In commodity markets, oil prices bounced after suffering their largest one-day drop since April 2020 on Friday.

“The move all but guarantees the OPEC+ alliance will suspend its scheduled increase for January at its meeting on 2 December,” wrote analyst at ANZ in a note.

“Such headwinds are the reason it’s been only gradually raising output in recent months, despite demand rebounding strongly.”

Brent rebounded 3.9% to $75.57 a barrel, while U.S. crude rose 4.5% to $71.24.

Gold has so far found little in the way of safe haven demand, leaving it stuck at $1,791 an ounce.

Advertisement

(Reporting by Wayne Cole; Editing by Richard Pullin & Shri Navaratnam)

Continue Reading

Business

Nissan Motor to spend $17.6 billion to accelerate electrification

Published

on

November 29, 2021

TOKYO (Reuters) – Nissan Motor Co said on Monday it will spend 2 trillion yen ($17.59 billion) over the next five years to accelerate vehicle electrification as it bets tighter carbon emission restrictions will spur demand for electric cars and hybrids.

Japan’s No. 3 car maker will introduce 23 electrified vehicles by 2030, including 15 electric vehicles (EV), and plans to introduce all solid-state batteries by March 2029, it said in a statement.

Nissan’s deeper push into battery-powered cars comes as consumer demand for such vehicles grows in key auto markets such as China and the United States and as its competitors release new electric vehicles.

Advertisement

Although still only a small portion of vehicles on the road, global electric car registrations in 2020 grew 41% even as the overall car market contracted by almost a sixth, according to the International Energy Agency (IEA).

Nissan, like other Japanese car makers, however, has yet to commit to completely abandoning fossil-fuel vehicles.

At the U.N. climate summit in Glasgow this month, major car makers, including General Motors and Ford Motor Co, signed on to a declaration that committed them to phase out fossil fuel vehicles by 2040.

($1 = 113.7000 yen)

(Reporting by Tim Kelly; Editing by Christopher Cushing and Muralikumar Anantharaman)

Advertisement

Continue Reading

Business

Shares of Macau casino operator Suncity suspended -HKEX

Published

on

November 29, 2021

HONG KONG (Reuters) – Shares of Suncity Group Holdings Ltd were suspended on Monday after its chief executive was believed to be among 11 people arrested by Macau authorities on Sunday over alleged links to cross-border gambling and money laundering.

The South China Morning Post reported that Macau police said on Sunday a 47-year-old businessman surnamed Chau was among those arrested. Alvin Chau is head of Suncity.

Suncity could not be reached for comment. Shares of the company last closed at HK$0.255.

Advertisement

(Reporting By Anne Marie Roantree; Editing by Kim Coghill)

Continue Reading
Advertisement

Trending