Energy

UK’s cheaper zero-carbon route comes at right time

9 Dec 2020

Decarbonising the British economy could cost less than 1% of GDP a year, Britain’s climate adviser reckons, well below its previous estimates. Politicians still need to act on the plan. But a credible roadmap is a guide for others ahead of next year’s UK-hosted global conference.

Australian pension giant braves steep M&A curve

9 Dec 2020

New Zealand infrastructure investor Infratil snubbed a $3.8 bln takeover bid from AustralianSuper. Its first solo acquisition target enjoys a solid negotiating position and Goldman on defence. For this to be more than a learning experience, it will have to dig deeper.

Funky debt bonanza is breeding complacency

8 Dec 2020

Companies from BP to Gazprom are issuing more bonds that count as equity than ever before. Low rates and investors’ thirst for yield explain why, yet the benefits of such hybrids are modest. To avoid future strife, companies should sell debt that is better at absorbing losses.

Activist minnow needs bigger fish to fry Exxon

7 Dec 2020

The $176 bln oil major has rarely listened to past investor pleas, so demands from a $40 mln stakeholder seems a non-starter. Yet its recent record of capital destruction may be enough for bigger funds to join in. Taking on the oil giant is a way to justify ESG lip service, too.

Green investing’s killer app faces growing pains

7 Dec 2020

Sustainable finance types long for a single metric showing how well companies are aligned with net zero emission targets. The Holy Grail exists, but there are many different versions. A harmonised methodology ahead of next year’s Glasgow climate summit looks ambitious.

Eni’s UK wind farm tilt is cheap for a reason

4 Dec 2020

The Italian oil major is paying utility SSE and Norway’s Equinor just over 3 mln pounds per megawatt for a 20% stake in the first two phases of the Dogger Bank project. It’s cheaper than past offshore developments. That’s mainly because new farms don’t carry such big subsidies.

Corona Capital: Movie releases, Ads, Running

4 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: HBO Max uses its muscle on movie releases; advertising wins some and loses some; Brooks’ beast year.

Corona Capital: Bitcoin, Lonely Planet

1 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: Bitcoin hit a record, buoyed by inflationary fears, new fans and plain old speculation. Meanwhile Lonely Planet has found a new owner, as it wrestles with an anything-but-lonely market for travel information.

EDF shares’ power surge need not be a one-off

26 Nov 2020

The $44 bln state-owned utility has outperformed rivals in the last six months. A deal to secure higher nuclear prices would repair EDF’s main arm and enable CEO Jean-Bernard Levy to mull a renewable energy spinoff. That could boost the company’s value by over a half.

Oil’s latest boost has longer-term thrust

25 Nov 2020

Multiple Covid-19 vaccines have lifted crude prices to March levels on hopes of an economic recovery. Producers may now pump like crazy, but renewed declines look less likely. Meanwhile, Big Oil’s virus-driven cuts to new supply should prop up prices further down the line.

UK green revolution takes baby-step beyond slogans

18 Nov 2020

Britain is to ban new petrol car sales by 2030 and invest in hydrogen to hit its 2050 decarbonisation goal. The sums cited are modest and the targets lack detail. The plan’s success hinges on Prime Minister Boris Johnson convincing private investors to pick up the slack.

Renewable energy gets its very own Masayoshi Son

13 Nov 2020

Aussie mining mogul Andrew Forrest unveiled plans for his Fortescue to go big in green projects. Targets include competing with global oil giants in production capacity. The bold strategy will spark a frenzy – both helpful and harmful – just as the SoftBank boss did in tech.

Elliott takes power punch to greener pastures

12 Nov 2020

Paul Singer’s fund wants utility Evergy to engage with NextEra, the largest U.S. renewable energy firm. Regulators have frowned upon NextEra’s ambitions. But its valuation helps justify deals without tasking ratepayers. Elliott’s presence might help Evergy get over deal-phobia.

Japan’s financiers face a carbon cleanup

11 Nov 2020

New Prime Minister Suga wants to cut greenhouse gases to zero by 2050. That’s ominous for MUFG, Mizuho and peers, who provided more than $150 bln in loans and underwriting for fossil fuels over five years. Powerful investors like $1.6 trln pension fund GPIF can crack the whip.

Corporate America prepares for life in purple

7 Nov 2020

From finance to tech to weed to transport, companies have had plenty of time to consider what a Joe Biden presidency means. Without a clear Senate shift one way or the other, legislative gridlock appears likely. Here is what the 2020 election will mean industry by industry.

Green energy valuations could use stiffer tailwind

5 Nov 2020

Siemens Gamesa and Danish rival Vestas now have over 60 bln euros of orders for wind turbines between them. But valuations look toppy even if they hit margin targets. A possible Joe Biden U.S. presidency is also less likely to supercharge renewables with a Republican Senate.

Aramco’s mighty value reflects mini investor base

3 Nov 2020

Shares in the $1.8 trln Saudi oil giant are flat since January, while those of western rivals like BP have halved. Aramco’s solid and more-secure dividend explains some of the difference. But a tiny free float comprised of investors who are less likely to sell helps, too.

Exxon is shrinking in all the wrong places

30 Oct 2020

The $137 bln oil giant is laying off staff and posting losses. It continues to bleed money, and over the past decade spent $15 bln more on its dividend and capex than cash generated by its business. As its earnings get smaller, its balance sheet gets weaker.

The Biden portfolio is mainly the Trump portfolio

29 Oct 2020

It might matter for mini sectors, like solar power and cannabis, who wins next week’s U.S. presidential election. But as Trump’s impact on coal shows, it’s not that predictable. Instead the Fed, stimulus, taxes and the post-Covid economy are cause for an asset-allocation rethink.

Corona Capital: Utah Jazz, Comcast, Kraft

29 Oct 2020

Concise views on the pandemic’s corporate and financial fallout: Utah Jazz’s owners sign off with a respectable return; Comcast shoots the light out on broadband; and Kraft rides the stay-at-home wave.