Foreign Stock Roundup: Roche To Buy Ignyta For $1.7B; Shell To Acquire First Utility

Global markets traversed a holiday-shortened week marked by thin trading volumes. Europe, in particular, witnessed little trading action with markets remaining closed both on Monday and Tuesday. Only the FTSE 100 managed to hit a fresh record. In Asia, the Nikkei slipped from a 26-year high logged during the preceding week but still managed to post considerable yearly gains. Argentina’s legislature passed crucial structural reforms while Mexico’s stocks experienced their highest gains in five years.

Europe’s Stocks Post Strong Yearly Gains, FTSE 100 Hits Record High

Markets across Europe remained closed on last Monday and Tuesday from the Christmas and Boxing Day holidays. Stocks across Europe ended mixed last Wednesday even as trading volumes remained low amid the holiday season. The STOXX 600 gained 0.1% with major exchanges finishing mixed. The FTSE 100 gained 0.3% to hit a record level.

The STOXX 600 declined by 0.3% last Thursday with the majority of indexes closing with losses or ending flat. Trading volumes continued to remain low during the period between Christmas holidays and the New Year. Telecom and tech companies suffered the sharpest declines during this trading session.

Most European stocks closed with losses on the last trading day of the year. The STOXX 600 declined by 0.4% with only the FTSE 100 ending with notable gains. Britain’s benchmark gained nearly 0.9% to close at a record high, posting an increase of 7.6% over 2017. Both the CAC and the DAX lost around 0.5%.

Italy’s benchmark FTSE MIB declined by more than 1% following the dissolution of parliament and call for fresh elections in March. Overall, most European stocks posted their strongest yearly gains in 2017 since 2013.

Asia’s Stocks Remain Mixed, Nikkei Slips from 26-year High

Stocks across Asia closed mixed on last Tuesday after a session marked by low trading volumes. The Nikkei lost 0.2% after touching a 26-year high in the previous session. Retailers trended higher even as tech and auto stocks suffered losses. South Korea’s Kospi also lost out on early gains to decline by 0.5%. The Shanghai Composite and the Shenzhen Composite rebounded, gaining 0.8% and 0.4%, respectively.

Asia’s bourses ended mixed last Wednesday even as Japan and Australian energy stocks moved higher after oil prices touch a record high. The Nikkei 225 inched up 0.1% with major exporters ending the session mixed. The Kospi overcame early losses to end 0.4% higher while the S&P/ASX 200 ended flat. However, the Shanghai Composite declined by 0.9% after healthcare, financial and tech stocks moved lower. Insurers in particular suffered heavy losses.

Stocks across Asia gained last Thursday after oil and copper prices moved significantly higher during last week. Trading volumes remained low ahead of the New Year holidays. The Nikkei 225 lost 0.6% after the dollar declined versus the yen. The Kospi emerged as the region’s leading index, gaining 1.3%. Meanwhile, the S&P/ASX 200 added 0.3%. Also, the Shanghai Composite and the Shenzhen Composite increased by 0.7% and 0.5%, respectively.

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On the last trading day of the year, Asia’s markets closed mostly mixed. The Nikkei slipped by 0.1% but still managed to log a yearly gain of around 19%. The S&P/ASX 200 lost 0.4% with nearly all of its sectors closing in the red.

The Hang Seng also finished in the green, ending the year more than 35% higher. The Shanghai Composite and the Shenzhen Composite increased by 0.4% and 0.3%, respectively. Though South Korea’s markets were closed, the Kospi still posted a yearly increase of 21.6%.

Argentina’s Stocks Up on Reforms; Mexico, Chile Post Strong Yearly Gains

Markets were closed for the Christmas Day holiday on last Monday. Shares from Argentina touched a new record level on last Tuesday after the country’s Congress passed a crucial law which is favorable for the business environment. As a result, the benchmark Merval index gained 1.8%, moving higher for the sixth successive session. Trading volumes remained low across the region even as the Bovespa gained 0.5%.

Last Wednesday, Argentina’s Senate approved a new tax reform and budget package. These legislations are part of President Mauricio Macri’s wider efforts to cut the cost of conducting business and attract a higher level of foreign investments.

Muted trading continued on last Thursday ahead of the New Year holiday. The Bovespa gained 0.4% with loyalty program manager Smiles Fidelidade SA leading gains after revealing that it would undertake cuts in ticket prices.
Mexico's S&P/BMV IPC increased by more than 1% on the last trading day of 2017. These were its largest gains in five years. A jump in corporate earnings boosted the index by more than 8% over 2017.

Meanwhile, Chiles’s IPSA index advanced by 0.3%, logging a 34% increase over 2017. The index’s best yearly performance since 2010 was fueled by the election of a business friendly president even as fears over the Trump administration’s policies ebbed. The Bovespa added 0.4%.

Stocks in the News

Roche Holdings AG (OTC:RHHBY) entered into a definitive merger agreement with Ignyta, Inc. (NASDAQ:RXDX) at a price of $27 per share or total value of $1.7 billion in an all-cash transaction. The price of $27 per share represents a premium of 74% to the closing price of Dec 21, 2017.

The acquisition adds an important mid-stage candidate to Roche’s pipeline. The lead candidate of Ignyta is entrectinib, an orally bioavailable, CNS-active tyrosine kinase inhibitor being developed for tumors that harbor ROS1 or NTRK fusions.

Per the terms of the agreement, Zacks Rank #2 (Buy) Roche will start a tender offer to acquire all outstanding shares of Ignyta common stock. The closing of the transaction is expected to take place in the first half of 2018. (Read: Zacks Investment Research

Written By: Zacks Investment Research