Petrol Panic

by Salman 3 years ago 6 min read

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Highlights for the Week 💸

Petrol pumps in the UK ran out of fuel this week due to panic buying in response to supply disruptions caused by a lack of tanker drivers. In other parts of the world, Evergrande has missed its deadline for coupon payments to its bondholders, setting the stage for potentially the largest-ever dollar-bond default by a company in Asia. We take a look at Pfizer's $2.3bn acquition of Trillium Therapeutics and speak to Tommaso Mancuso of Shikuma Capital in our Industry Insight Podcast Series.

Upcoming Sessions 🗓

🏦Comparable Company Analysis With Marc Rudajev

How do you value Coca-Cola? One technique is to see how it compares to its closest competitor, PepsiCo. This is called Comparable Companies Analysis, or “comps”.

💰Trade Lifecycle Game With Jack Boland

Each and every trade, regardless of asset class, follows a specific life cycle and truly understanding why/how and the mechanics of trading can be a significant differentiator when trading yourself or applying for roles.

📈Pitching Stocks With Marc Rudajev

Every investment will start with an idea. Generating this idea, doing the required qualitative/numerical analysis and articulating it concisely is what will land you the capital/validation/job that you are require.

World View 🌎

🇬🇧United Kingdom

🏦 Market expectations for Bank of England rate rise shift to early 2022: Investors now expect UK interest rates to rise by February next year after the BoE signalled growing concern about a rise in inflation, above 4% this winter, with some even viewing a 2021 increase as an outside possibility.

🛢 Many UK petrol stations run dry amid panic buying: At least half of UK petrol stations outside of the motorway network have run out of fuel after Britons engaged in panic buying in response to disruption to fuel supplies caused by a lack of tanker drivers.

💸 UK recovery slows as price pressures rise, survey shows: According to IHS Markit’s composite purchasing managers’ output index, the UK’s economic recovery slowed at the end of the third quarter, 54.1 in September from 54.8 in August.

🇺🇸United States

🏠 US home sales fell in August: Sales of previously occupied U.S. homes fell in August and prices that have been soaring eased, showing that the housing market is cooling as intense competition leaves many would-be buyers on the sidelines.

🇨🇳 Huawei CFO reaches deal with US prosecutors: Meng Wanzhou, Huawei’s CFO reached an agreement with federal prosecutors, in which the fraud charges against her would be dropped in December 2022, provided that she complies with certain conditions, including not contesting any of the government’s factual allegations.

📈 The Fed to raise interest rates in 2022: A growing number of Federal Reserve officials expect an interest rate increase next year as the US central bank charges ahead with a reduction of its massive stimulus programme that will probably be announced in November.

🇪🇺Europe

🔋 Draghi pledges €3bn energy subsidy to maintain Italy's pandemic recovery: Italy’s prime minister Mario Draghi has warned that rising energy prices posed a threat to the country’s accelerating post-pandemic recovery as he promised €3bn to help poorer households pay their bills.

🇹🇷 Turkey cuts interest rate to send lira tumbling as inflation soars: On Thursday, Turkey’s central bank unexpectedly cut its benchmark interest rate, slashing its base rate by a full percentage point to 18 percent, despite accelerating inflation that had already turned borrowing costs negative in real terms.

💰Eurozone business costs surge as supply chain snags slow growth: Recently, business costs in the eurozone rose at their fastest pace in more than two decades in September.

🇸🇬Asia Pacific

🇨🇳 China bans crypto activities: China has expanded its crackdown on cryptocurrencies by declaring that all activities related to digital coins are “illegal”, targeting overseas cryptocurrency exchanges specifically.

🧧 Evergrande misses $83.5 million Coupon payments: Evergrande was meant to pay $83.5 million in coupon payments by Sept. 23 on dollar bonds with a face value of $2.03 billion. However, global investors who own the dollar bonds hadn't received an interest payment by the deadline.

🇹🇭 Personal details of tourists leaked in Thailand: Tourists' personal details were recently exposed online in Thailand, with information of around 106 million visitors to Thailand was accessible to all on the internet. An issue that could potentially hurt a much-needed recovery of the key sector.

What's The Deal? 🤝

Pfizer to Acquire Trillium Therapeutics for $2.26 Billion

Acquirer: Pfizer Inc. (NYSE: PFE)

Pfizer is a multinational pharmaceutical and biotechnology cooperation that produces medicines and vaccines, including the Pfizer-BioNTech COVID-19 Vaccine. Their areas of specialisation are cardiology, endocrinology, immunology, neurology andoncology
Employees - 78,500+
Established in 1849, New York, United States

Target: Trillium Therapeutics Inc. (LON: 0VLS)

Trillium is a clinical-stage immuno-oncology company based in Canada
Their two decoy receptors (TTI-621 and TTI-622) are in clinical programs aiming to target CD47
Founded in 2004, Mississauga, Ontario, Canada (formerly Stem Cells Therapeutics Corp. prior to the acquisition and rebranding as Trillium Therapeutics in June 2014)
Employees - 33 (as of 2020)

Rationale

Pfizer's cash stockpiles are rising fast, fuelled by an estimated $33.5 billion in estimated COVID-19 vaccine sales revenue by the end of 2021. Using the profits to invest in the Trillium deal is said to be a smart move by many experts.
Over 1 million people worldwide were diagnosed with blood cancer in 2020, representing approximately 6% of all cancer diagnoses. The same year, more than 700,000 people worldwide died from a form of blood cancer.
In the biotech industry, M&A deals act as a catalyst for new scientific developments since creating long-term shareholder value through scientific development takes decades.
This deal will open up new avenues for Pfizer to expand its research into experimental cancer medicines. The Trillium deal is a great fit for Pfizer's oncology segment, enabling them to strengthen their haematology portfolio and improve the lives of people living with blood cancers.

Podcast 🎧

This week we are joined by Tomasso Mancuso, Co-Founder and CIO at Shikuma Capital.

This episode covers:

Dynamics of fund of funds investing
Skills and attributes needed to succeed in the hedge fund industry
Journey to cofounding an investment management company (Shikuma Capital) and becoming a CEO