Market rally due to corona vaccine news and how did the most promising IPO in history get suspended?

Mary Pieterse-Bloem, Professor of Financial Markets at Erasmus School of Economics and Global Head of Fixed Income at ABN Amro, is a guest at BNR Nieuwsradio. Among other things, she talks about the effect of the news of Pfizer's successful corona vaccine on the market, and the suspension of the largest IPO ever.

Promising news

Pfizer has released promising news of a successful corona vaccine that would be effective and safe for 90%. This news resulted in a huge rally on the financial markets. According to Mary Pieterse-Bloem, this not only resulted in huge gains, but also a huge catch-up of so-called value stocks. These are shares that have lagged behind over the last period. Think in particular of stocks in the banking sector, the energy sector and the fossil industry. The question now is whether or not this trend will continue. 

An unexpected turn of events

To everyone's amazement, the largest IPO ever held, by the Chinese payment platform Ant Group, was suspended. Pieterse-Bloem talks about her fascination with China and gives her opinion on this unexpected turn of events. ‘At first sight it looks like a power struggle between the public and the private sector. The reason why the IPO was called off is because of rules that have been brought to the surface regarding the provision of credit. These rules change the entire picture surrounding the valuation of this company. I think the government did this because it wants to keep control over the financial sector.’

No winners

‘The amazing thing about this story is that such an IPO is in the making for months. The preparations are enormous. And it's unbelievable that certain rules only surface at the very last moment.’ Pieterse-Bloem believes that, despite China's motives, there are no winners in this story. ‘China does not benefit from this and neither do all the other companies that still want to enter the market. China is currently trying to open up its capital markets to attract foreign investors. That's also why you see a lot of confusion among analysts.’

More information

The full item from BNR Nieuwsradio, 11 November 2020, can be found here (in Dutch). 

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