Us Markets Poised For Scotland Vote & Alibaba Impact
A potential market obstruction passed by the wayside last night, as Scotland voted to remain with the United Kingdom and indices responded favorably.
Friday, September 19, 2014
And with Alibaba – sporting one of the highest IPOs in history – set to hit the market, Friday is shaping up to be a good day for the US stock exchange.
Futures rose Friday morning, according to MarketWatch. The Dow added 0.4%, the S&P 500 gained 0.33% and the Nasdaq increased by 0.4%.
Scotland rejects autonomy
Through a tight race, those in favor of Scottish independence fell short in their efforts to separate from the 307-year-old UK, according to Bloomberg. Ultimately, 55% of voters supported remaining with the UK against 45% preferring autonomy. As a measure of enticing Scotland to stay, UK leadership promised greater policy-making decision to Scotland, in addition to altering the constitution and changing the way the member states are governed.
“I accept the verdict,” Alex Salmond, leader of Scotland’s government in Edinburgh, said in a speech. “The unionist parties made vows and Scotland will expect them to be delivered in rapid course.” Following the election, UK stocks grew to a six-and-a-half year high and the pound sterling reached the strongest rate in two years.
Alibaba sets IPO
Chinese Internet giant Alibaba set its initial public offering at $68 per share on the New York Stock Exchange, the Wall Street Journal reported. That pricing would put the company on course to raise at least $21.8 billion and give Alibaba an initial market value of $168 billion – making it one of the 40 largest public businesses in the world.
Despite the huge numbers, some investors are skeptical about the company’s performance in its first few months, once the market settles. While many believe the shares could rise, some raised concerns over a group of unrestricted early investors.
Vince Rivers, senior portfolio manager at JO Hambro Capital Management, told the Wall Street Journal that the analysts he spoke with forecast Alibaba to trade from $80 to $100 per share on Friday. He also believed investors should observe trade volume rather than price in judging buyers’ returns. "If you see it open with big volume, you're clearing out a lot of the potential sellers. But if it spikes up with no volume, then you might see it come back down quickly," he explained.
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