With interest rates hardening, Carlsberg should pour that Indian IPO now

Probably the best beer in the world may just be the coolest Indian IPO this summer. But if Carlsberg A/S wants to maximize the valuation of its planned stock offer, it had better rush it across the counter. Happy hour could be over soon. With the US Federal Reserve signalling two more interest-rate hikes this year, the Indian market’s thirst for new paper – up 77 per cent so far in 2018 from last year – could dry up. 

Pedigreed consumer stocks, such as the country’s third-largest-selling beer, are still likely to see buyers, but capturing anywhere near the 73 times price-earnings multiple of United Breweries Ltd., which makes India’s most-popular Kingfisher brand, will need all the froth the Danish brewer can muster. That’s largely a question of timing. But Carlsberg doesn’t appear to be fully ready. Bloomberg News has reported that it’s still meeting arrangers, and a transaction isn’t certain.

Stock markets globally start 2018 on cheerful note; bond yields rise

World stocks hit fresh highs on Wednesday with European markets joining the party as early indications suggest 2018 will be another year of synchronised global growth led by a robust European economy.

After its biggest one-day gain in more than two weeks on Tuesday, and in the wake of its best year since 2009 in 2017, MSCI's index of global stocks, which tracks shares in 47 countries, pushed on to new record highs.

The pan-European stock index was 0.2 per cent higher following gains for their Asian and US counterparts overnight as manufacturing surveys pointed to a strong start for the European economy. US stock futures suggested another higher open on Wednesday.

The single currency was holding near a four-month high of $1.2081 hit on Tuesday.

"Investors have woken up in the new year and looked forward to another firm-year for global growth with very muted downside risk," said Investec economist Philip Shaw. But he warned against reading too much into the first two trading days of the new year.

"The converse is the sell-off in bond markets: the idea that inflation pressures may be firmer than expected and central banks could take a slightly more aggressive approach than previously thought," Shaw added.
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