Post date: Sep 03, 2013 1:2:28 PM
More M&A mania: Microsoft swallows up Nokia's phone business, meaning Nokia Chief Stephen Elop, a former Microsoft man, will return to the fold just as the board seeks a successor to current CEO Steve Ballmer just a day after the Vodafone-Verizon Wireless deal. This is set to lift European stocks at the open. IG's Brenda Kelly says it'll change the face of telecommunications on a number of continents but it still has some catching up to do.
LONDON, ENGLAND, UK (REUTERS) - JOURNALIST ASKING BRENDA KELLY: "Alright, up 45%, it's down 95% since 2000. It's got a lot of catching up to do, right?"
BRENDA KELLY: "It certainly does and I think it is a little bit of a last-ditch effort to catch up with the rivals such as Samsung and Apple. And I think in some respects, this could be the way to do it. Obviously, it creates a whole new different environment for Microsoft and Nokia itself and changes the face of telecommunications on a couple of continents. That being said, I do feel with regards to the operating system, it's the Windows 8, certainly the demand for smartphones and the fact that it only provides about 160,000 apps versus that will be five times that for the likes of Apple and Samsung, it does have a fair bit of catching up to do."JOURNALIST: "What happens to Nokia now? I mean is it a stock you're buying?"
BRENDA KELLY: "Well certainly a stock that you would have been examining since it entered a partnership with Microsoft back in 2011. But it all depends on what innovations we see they come up with. So obviously they'll be entering the tablet market as well, which should be a highly margin-driven area and something they haven't entered into before. So in light of the fact that that is a possibility for them and given that a lot of the hard work has been done for them by their competitors, it might provide a good opportunity at the moment, maybe not quite now given the blast upwards that we've seen but once things settle down and we get a little bit more idea in terms of the meeting or the announcement we get in November as to where they're going to go from there, it might be an opportunity for investors, yes."
JOURNALIST: "It's a big risk week this week - payrolls, the ECB, here at the UK, the Bank of England, the RBA kept rates on hold today. What's the focus, what should we be watching?"
BRENDA KELLY: "Well I think the data coming out of China has helped to bolster a bit of optimism and of course, with the Aussie rate cut that we didn't see happening although we were expecting a double whammy back last month that we would see the RBA cut by 0.5%. So this in a way does certainly serve to create a certain amount of optimism and I think the PMI data we've seen from the UK and the Eurozone, to a lesser degree, is providing a certain amount of bullish momentum. So construction data today will also be something very closely watched and then services PMI for the UK tomorrow. Obviously, it seems that the markets are not necessarily believing in Mark Carney's rhetoric and we're seeing that effect in terms of bond yields and of course, in the Sterling/Dollar cross as well. So what we will need to watch very carefully is the inflation numbers that will be coming out very shortly and of course given the manufacturing data yesterday, that was a key concern there."