BP Raises Dividend, Launches $1.4 Bln Share Buyback
Topic of the day
BP PLC said it increased the dividend for the second quarter and launched a $1.4 billion share buyback. The British oil-and-gas major declared a quarterly dividend of 5.46 cents a share, up from 5.25 cents in the first quarter. Increased distributions are based on the underlying performance of the business, an improving outlook for the environment and confidence in its balance sheet, it said. In addition, BP reported a net profit of $3.12 billion for the three months to June, down from $4.67 billion in the first quarter. However, the underlying profit on a replacement cost basis increased to $2.80 billion from $2.63 billion in the first quarter, and was well above the market consensus of $2.15 billion that was compiled by the company and averaged from 24 brokers. For the third quarter, the London-based energy company said it expects higher upstream production than in April-June, higher product demand across its customer business, and slightly improved refining margins.
The Swiss stock market was little changed at a high level on Tuesday. In the course of the day, the leading index SMI rose to a new all-time high before crumbling again. The market was also somewhat slowed by the strong franc, which was sought after as a safe haven because of the pandemic, among other things. For the export-strong Swiss economy, a strong domestic currency can be an obstacle. The SMI lost 0.1 per cent to 12,163 points. Among the 20 SMI stocks, there were ten gainers and nine losers, and one share closed unchanged. 27.45 (previously: 31.3) million shares were traded. The SMI was led by ABB (+0.8%) and Lonza (+0.7%), with Alcon (-0.5%) and Nestle (-0.7%) at the bottom. Sector trends were not discernible. Among the banking stocks, UBS (-0.3%) trended slightly lighter, Credit Suisse (+0.3%) slightly firmer. The shares of the two pharmaceutical giants Roche (+0.2%) and Novartis (-0.3%) also moved in different directions. On the broader market, Oerlikon was sought after. The industrial company's operations are running smoothly again. The share price rose by 4.2 per cent.
European stock indices closed mixed on Tuesday, torn between strong corporate results and concerns about the Delta variant of the coronavirus. Beijing's crackdown on technology companies also weighed on the trend. The Stoxx Europe 600 index gained 0.2% to 465.4 points. In Paris, the CAC 40 gained 0.7%, supported by good results from Stellantis and Société Générale, while the SBF 120 rose 0.5%. In Frankfurt, the DAX 30 gave up 0.1% and the FTSE 100 in London rose 0.3%. Sanofi SA agreed to pay $3.2 billion to acquire mRNA specialist Translate Bio, a big vote of confidence that the new technology underpinning two successful Covid-19 vaccines holds promise beyond the pandemic. The French healthcare company said the deal would accelerate work already under way with Translate Bio, based in Lexington, Mass., to develop mRNA vaccines for Covid-19, seasonal flu and other infectious diseases. It will also hand Sanofi a platform to pursue further drugs and vaccines using mRNA technology. BMW AG on Tuesday reported a swing to second-quarter profit and a rise in revenue as the luxury-car maker continued to benefit from strong demand for premium vehicles and good pricing. The German auto maker’s quarterly aftertax profit was 4.79 billion euros ($5.69 billion) compared with a loss of EUR212 million in the same period a year earlier when it was hit by the effects of the coronavirus pandemic. Earnings before interest and taxes came in at EUR5.01 billion compared with a prior-year loss of EUR666 million. Revenue for the quarter rose to EUR28.58 billion from EUR19.97 billion, BMW said.
U.S. stocks rose, shrugging off a pullback in shares of technology and communications companies. The S&P 500 added 0.8%, erasing earlier losses. The Dow Jones Industrial Average rose 0.8% and the Nasdaq Composite edged up 0.5%. A solid earnings season has helped bolster investor optimism that stocks can continue to grind higher following an already strong rally this year. Money managers say continued support from central banks and economic data that still shows growth will further support equities. PepsiCo Inc. plans to sell the Tropicana orange juice brand to a private-equity firm, parting ways with one of its most famous holdings in a bid to boost growth. The snacks-and-beverage giant will sell Tropicana, Naked and other juice brands in North America to private-equity firm PAI Partners, it said Tuesday, confirming an earlier Wall Street Journal report. PepsiCo will receive pretax proceeds of $3.3 billion and retain a 39% stake in the new joint venture in a deal valued at roughly $4.5 billion. Lyft Inc. achieved a measure of profitability a quarter earlier than expected, marking a surprising comeback after the pandemic initially crushed demand for its ride-share service and later left it dealing with driver shortages. Strong ride-hailing demand in the second quarter, combined with cost cuts throughout the pandemic, enabled Lyft on Tuesday to post its first profit on an adjusted basis before interest, taxes, depreciation and amortization. Lyft’s shares were slightly higher in after-hours trading. Lyft President John Zimmer cautioned that it was tough to predict the future with the highly transmissible Delta variant boosting Covid-19 cases in the U.S., but said he was optimistic that the company wouldn’t slip back from its profit milestone.
Stock markets in East Asia and Australia are showing no consistent trend on Wednesday, despite strong cues from Wall Street, where the S&P-500 rose to a record high on Tuesday. The rising number of infections with the highly contagious delta variant of the coronavirus is fuelling fears that the economic recovery could be stalled. This is especially true for the Tokyo stock exchange, where the Nikkei is down 0.3 per cent. The Japanese stock market is also being weighed down by the rise of the yen against the dollar, which is seen as a refuge currency in times of crisis. In Australia, price gains were limited to an average of 0.3 per cent.
The steep decline in Treasury yields is "surreal," an asset manager said. The 10-year U.S. yield was at 1.172%, well below the 1.749% reached in March. The fall is widely attributed to prospects of a slower global recovery.
JP Morgan rises BNP target to 65 (63) EUR – Overweight
CS rises Holcim target to 78 (70) CHF – Outperform
UBS lowers IAG target to 255 (280) p – Buy
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