|Bid||123.71 x 0|
|Ask||123.81 x 0|
|Day's range||121.50 - 124.28|
|52-week range||70.45 - 152.35|
|Beta (5Y monthly)||1.29|
|PE ratio (TTM)||16.20|
|Earnings date||09 May 2020|
|Forward dividend & yield||4.30 (3.52%)|
|Ex-dividend date||18 May 2020|
|1y target est||129.79|
(Bloomberg) -- Temasek Holdings Pte is prepared to drop a S$4 billion ($2.9 billion) bid for control of Keppel Corp. should the Singaporean conglomerate’s next earnings report trigger a clause that allows it to walk away, according to people familiar with the matter.The state investment firm is keeping a close tab on Keppel’s financials considering any significant impairment could trigger so-called material adverse change clauses, said the people, who asked not to be identified as the information is private. Temasek can’t adjust its offer price in accordance with the terms of the deal, leaving it little wiggle room, the people said.The conglomerate’s shares dropped as much as 2.2% Monday before recovering some losses to close 1.5% lower at S$5.95. This is about 19% below Temasek’s offer price of S$7.35.Keppel is due to report its second-quarter earnings next month, while Temasek has until October to complete the deal, pending regulatory approvals.Negotiations and work on the transaction are ongoing and no final decisions have been made, the people said. Temasek said it had nothing to add beyond comments made by its financial adviser Morgan Stanley. A Keppel spokesperson said that the company doesn’t comment on any speculation concerning Temasek’s offer.Relevant ThresholdsMorgan Stanley, Temasek’s adviser on the Keppel deal, said in a letter June 21 that there are relevant thresholds by which the material adverse change clause could occur as a result of accounting impairments. That could in turn affect Keppel’s net asset value or after-tax profit, the bank said.If the clause is triggered, Temasek will have to assess whether to go ahead with the deal and it’s not a guarantee it will proceed, the people said. Aside from the material adverse change clause, the other pre-conditions for the deal to be launched are regulatory approvals that are expected to be decided in the next two months, they said.Temasek, which already owns about one-fifth of Keppel, offered to buy an additional 30.6% stake in October. Keppel’s business has been affected by the global economic slowdown and lockdowns in various countries due to the Covid-19 pandemic. The conglomerate reported a 21% drop in net income for the first quarter.Earlier this month, Keppel asked its associate company Floatel International Ltd. to conduct a review of its impairment assessment after one of its major rivals took a large hit to the book value of its vessels following a re-assessment of the market outlook. Keppel, which owns a 49.9% stake in the oil drilling fleet operator, had initially said no impairment would be made.The impairment charge for Keppel from Floatel’s review could be about S$130 million, according to Macquarie Group Ltd. estimates. Factoring in its investment gains and land sale, Keppel will need to post at least S$88 million in net income to stay within the material adverse change clause for the deal with Temasek, Macquarie said on June 1.(Updates with Keppel’s closing share price in third paragraph and Temasek’s deliberations in seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The volume of Indian loans subject to moratorium is dropping, suggesting that fears about large-scale defaults on banks’ retail lending books may be overblown, according to analysts at Macquarie Group Ltd.Based on soundings with home lending specialist Housing Development Finance Corp. and Indian banks, “the unanimous feedback has been that there has been a decline in the total loan book under moratorium from the 25–30% numbers reported as of end-May,” analysts led by Suresh Ganapathy wrote in a note.It’s too early to calculate the new figure, but at HDFC the proportion of the retail loan book subject to deferral fell to 7% as of June 15 from 21% in May, the note said.“Hence, we believe worries about large-scale retail defaults are exaggerated,” the Macquarie analysts wrote.The Reserve Bank of India has allowed borrowers to delay monthly payments on their loans until the end of August, to provide some relief from a prolonged lockdown that has shuttered businesses and left millions jobless.Read about pressure on banks’ capital from the loan moratoriumsA key reason for the decline in loans subject to moratorium was the greater clarity on the additional liability borrowers will face, Macquarie said. Also, some banks have switched from an “opt-out” to an “opt-in” policy with the loans, it added.Under the new arrangement, borrowers have to request the payment deferral, rather than being automatically included unless they opt out.Another factor is the lower rate of job losses among white-collar staff than had been feared, which showed through in the salary payments into their bank accounts.“Two major banks who have a large number of salary accounts indicated that the salary uploads into the accounts dipped slightly in April but were stable in May, and they have not seen any major decline,” Macquarie said.However, banks remained cautious about reading too much into the lower moratorium rates, the analysts said. Customers are still able to opt for the deferrals until the end of August.And despite the drop seen with retail lending, the moratorium ratio on HDFC’s corporate book stayed largely flat at around 40%, Macquarie said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Macquarie Infrastructure and Real Assets is targeting to raise about $3 billion for a new fund for investments in Asia, according to people familiar with the matter.The unit of Australia’s Macquarie Group Ltd. is in talks with prospective investors for the infrastructure fund and has already secured some commitments, the people said. MIRA is aiming for a first close for the fund in the third quarter, said the people, who asked not to be identified as the matter is private.A representative from MIRA declined to comment.The new Asian regional infrastructure fund would follow two similar funds that had raised $6.4 billion in total. The two existing funds invest in transportation, communications, utilities, power, energy and waste management assets across Asia Pacific.The latest MIRA Asian infrastructure fund led a consortium that in April acquired an 88% stake in data-center firm AirTrunk, in a deal that valued the Australian firm at more than A$3 billion ($2 billion).(Updates MIRA’s response in third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Chinese tech firms are expanding their footprint in Hong Kong even as the pandemic prompts some banks to consider scaling back in the world’s most expensive office market.TikTok owner ByteDance Ltd. and Alibaba Group Holding Ltd. have signed leases to add office space in Hong Kong, according to people familiar with the matter who asked not to be identified as the matter is private.ByteDance took out a three-year lease on about 3,000 square feet (279 square meters) of space in Causeway Bay’s Times Square, according to a person familiar. Alibaba has also signed up for one more floor spanning approximately 17,000 square feet in the same building, one of the people said. The firm currently leases three floors and a dozen more units.Representatives for ByteDance and Alibaba declined to comment.The new leases underscore the twin tech giants’ ambition to broaden their global footprint, as growth in their home market slows. While ByteDance is looking for the next global hit to replicate TikTok’s success in online entertainment, Alibaba’s divisions including e-commerce and cloud computing are tapping overseas clients and customers.Bytedance’s valuation has surged to more than $100 billion in recent private share transactions, as investor confidence in the popular TikTok video platform grows. The company previously laid out an aggressive expansion plan of providing 40,000 new jobs in 2020. Those include two Hong Kong-based positions for crafting content policies, according to ByteDance’s job referral site.Bank OfficesThe expansion of the Chinese tech giants comes as some financial firms reassess their office needs with so many staff working from home. The city is also mired in its deepest recession on record, and faces growing tension over a new security law proposed by China.In March, Nomura Holdings Inc. said it will cut its space in Two International Finance Centre when a new lease takes effect at the start of 2021. Macquarie Group Ltd. is handing back space in One International Finance Centre that the Australian investment bank had sublet to a co-working provider.As companies look to cut costs, demand for office space has declined. The average vacancy rate across the city’s major business areas rose to 7.2% in April, the highest since October 2009, according to Jones Lang LaSalle Inc. Meanwhile, rents dropped 3% in April from March, the property agency said.Hong Kong’s Central district has the world’s highest rents for office space, averaging $313 per square foot, topping New York’s Midtown and London’s West End, data from JLL show.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The global shift to value from growth is playing out in Australian shares in force and could help the nation’s benchmark stock index close the gap with regional peers, according to analysts.The recent surge in domestic value stocks is stronger than in the U.S. in part because the major banks have climbed to a three-month high amid growing optimism surrounding the economy. Australia is primed for a value comeback after becoming one of Asia’s biggest underdogs since the coronavirus outbreak started, Jefferies Group LLC said.A higher weighting in financials and “old economy” shares has fueled a more substantial value rebound in Australia, Macquarie Group Ltd. analysts wrote in a June 5 note. The nation’s big-four banks make up about a fifth of the S&P/ASX 200 index weighting and have soared 29% since May 22.Shares that have underperformed since February and seen 2022 earnings downgrades since the beginning of the outbreak may be the best value plays, Macquarie said, citing GPT Group and Australia & New Zealand Banking Group Ltd. among its preferred picks.Australia’s benchmark index plunged 37% from a record high reached on Feb. 20 as investors fretted over the pandemic’s hit to global growth and oil-market turmoil. Signs that an economic recovery could come quickly have helped almost erase year-to-date losses for equity markets in Malaysia, Korea and New Zealand, outperforming the local gauge which remains down about 9.2% in 2020.Value PicksJefferies favors energy and consumer shares, as they are farthest from their year-to-date peaks and have more ground to regain. Property firm Mirvac Group was one of the global companies it screened as a winner among value stocks.Jefferies ‘Hunt for Value’ Seeks Stocks to Power Next RallyFor AMP Capital Investors Ltd.’s Nader Naeimi, cyclical and value sectors like financials and resources are attractive as economies reopen and more fiscal programs are implemented.“After a significant underperformance, the sweet spot for a rotation from defensive to cyclicals and from growth to value is now,” said Naeimi, AMP’s head of dynamic markets in Sydney.Still, ongoing stimulus is needed to keep the value movement going, Macquarie said. The rally will be at risk if policy makers withdraw or taper government support too quickly, the analysts added.(Updates ASX 200 year-to-date performance in fifth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- I returned to the office this week, joining thousands of bankers from Citigroup Inc. to Morgan Stanley that are trickling back to their desks in Hong Kong. After almost five months working from home, it's going to take some getting used to.The easing of coronavirus lockdowns heralds the beginning of the end for the world's greatest work-from-home experiment. Perhaps. Twitter Inc. will let employees work from home permanently even after the outbreak recedes, while others such as Google have said staff should expect to stay away for the rest of the year. The upheaval caused by the pandemic has caused many to question whether we will ever return to business as usual, giving rise to headlines such as “the death of the office.” I have my doubts.My initial reaction at being told to stay home in January was panic. With two teenage daughters about to start online schooling and a husband who would also need to work from home, I struggled to see how our crowded 47th-floor apartment would cope. I’d had a taste already, when the office became all but inaccessible for several days during the height of Hong Kong’s protests last year, so I knew what we were facing. Over the following, fractious few months, I have jostled for space on the dining table, mediated disputes between the girls, and tussled over the yoga mat — a crucial stretching prop for laptop-induced shoulder strains, as well as an essential accessory for online PE classes.Somewhere along the line, I grew to like it. I'll miss the home-work experience, when it finally ends (like many other companies in Hong Kong, our return is on a split-team basis, so we aren’t back at the office full-time yet). The family has bonded more tightly as a result. I’ve grown accustomed to the home-office rhythm, acquiring some admittedly unhealthy habits along the way — such as snacking on Cheetos, bingeing on TV news channels, and reading the obituaries.I’m in the minority, though. We’re fortunate in having more living space than most. In a city such as Hong Kong, which is densely packed with tiny apartments, it’s simply not viable for many people to work from home indefinitely. The average apartment size is 40 square meters (430 square feet) compared with 137 square meters in New York City, according to Jones Lang LaSalle Inc. Many employees just don’t have the room to set up a home office. And living in such cramped quarters, they need to get out regularly. The cost-benefit equation for Hong Kong is skewed. With urban areas being closely packed and the subway system efficient, getting to the office is quick and easy for most people. It may be a different story in the U.S., where cities sprawl into the suburbs, commute times may be long, and public transport is often less reliable. Or in Asian metropolises such as Mumbai, which is densely packed but plagued with horrendous traffic congestion and a more than 150-year-old train network that make suburban working attractive.That’s not to suggest that Hong Kong will escape any long-term impact from Covid. Macquarie Group Ltd. is among companies that have already decided to cut space in the city’s skyscrapers. Other financial services firms can be expected to follow.Still, there are many office jobs that can’t be done remotely. At most, 30% of bank employees in the city can work from home, Bloomberg Intelligence analyst Francis Chan estimates. “In industries that thrive on information flow and speed, like sales and trading, you may see back offices and compliance work from home but traders will likely have to go back even if they already have three screens at home,” said Parijat Banerjee, a financial services consultant at Singapore-based Greenwich Associates.In any case, most people don’t want to get rid of the workplace, HSBC Holdings Plc analysts James Pomeroy and Davey Jose wrote in a report titled "Leaving the City." They just don’t want to be there all the time. That broad conclusion applies across all developed markets where the technology is adequate to enable remote working, Pomeroy said.Ultimately, offices are more than just a place to do business — like the cities that surround them, they are meeting points for social and cultural exchanges. Humans are social animals, and we need more contacts than those our immediate family provide.That’s a thought that resonated with me this week as I surveyed the near-deserted pantry at Bloomberg’s central Hong Kong offices, a space that was typically heaving with people and animated conversations before the pandemic. A return to normality can’t come soon enough. (Corrects the seventh paragraph to remove a reference to Nomura reducing space, a decision that was taken before the Covid pandemic.)This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- The list of Intel Corp.’s annual supplier award winners tends to read like a who’s-who of the semiconductor industry’s biggest names. This year, it included a little-known Japanese company whose machines have become indispensable in the race to improve semiconductors and whose stock has been rocketing up as a result.Lasertec Corp. is the world’s only maker of testing machines required to verify chip designs for the nascent extreme ultraviolet lithography (or EUV) method of chipmaking. In 2017, Lasertec solved a key piece of the EUV puzzle when it created a machine that can inspect blank EUV masks for internal flaws. Last September, it cleared another milestone by unveiling equipment that can do the same for stencils with chip designs already printed on them. This March, Intel gave the tiny Yokohama-based company an award for innovation, its first after decades of doing business together.“That’s a major milestone for us,” Lasertec President Osamu Okabayashi said in an interview. “It means a lot to be recognized this way as a supplier.”The company’s stock has soared about 550% since the start of 2019, more than twice the gain of the second-best-performing security in the benchmark Topix index. Shares increased about 4% Tuesday, pushing its rise this year to more than 60%.Intel declined to say if it was buying EUV equipment from Lasertec, which already supplies test gear to its rivals Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. The three chip fabricators are the only ones so far to announce EUV plans, because the technology is so complex and expensive. Okabayashi would only say that his company has “two or more” EUV customers.“This can be read as a sign that Lasertec’s tools are indispensable to Intel’s EUV roadmap.” said Damian Thong, an analyst at Macquarie Group Ltd.Read more: Japan’s Star Electronics Stock Will Be Vital to Intel, SamsungEUV is just entering the mass production phase after two decades in development, but investors are already betting Lasertec will be one of the key beneficiaries. The move to EUV overcomes key hurdles to shrinking manufacturing geometries of semiconductors, allowing more and smaller transistors to be crammed onto silicon. It promises to unleash another wave of gadgets that are slimmer, cheaper and more powerful.Last month, Lasertec raised its annual order forecast for the second time this year to 85 billion yen ($789 million) in the period ending June, nearly double the amount it received in fiscal 2019. The company is headed for the fourth straight year of record revenue and profits. Sales will climb 39% to 40 billion yen and profit will jump 76%, according to its estimates. And that’s likely to be just the beginning.Samsung earlier this month said it is building a 5-nanometer fabrication facility that will use EUV to make processors for applications ranging from 5G networking to high-performance computing from the second half of next year. Taiwan’s TSMC is pushing ahead with plans to adopt 3-nanometer lithography mass production in 2022 and announced plans to build an advanced fab in the U.S. Intel’s first product made using EUV is expected late next year.Their primary focus is on so-called logic processors, used to power devices and networking applications, but the new manufacturing technique will eventually filter through into the production of DRAM and other memory chips.Read more: Samsung Takes Another Step in $116 Billion Plan to Take on TSMC“Logic makers will be first to adopt EUV, with memory makers following later,” Okabayashi said. “The real volume of orders will come when they reach mass production stage. Right now it’s 7- and 5-nanometer chips. 3-nanometer is still in development stage.”Okabayashi expects each customer will probably need several of his testers, which could cost well over $40 million apiece and take as long as two years to build. A chipmaker would need at least one machine in its mask shop to make sure the stencils come out right. Another would go into a wafer fab to keep an eye on the microscopic wear and tear that result from concentrated light being projected repeatedly through the chip design stencils.“Lasertec is still trying to get a feel for this market and how big it can be,” Macquarie’s Thong said. “Their stock is moving on expectation of future orders. But there is little actual visibility on the scale of this market, so Lasertec retains a lot of capacity for surprise.”(Updates with share price in fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- For BT Group Plc, two things have long been sacrosanct: the dividend and ownership of its lucrative network. In 2020, it seems, the temple walls are being torn down.Over the past few years, carriers across Europe have looked at the vast sums needed to upgrade their fiber-optic connections and roll out fifth-generation wireless networks, and then at the lofty valuations put on existing network assets. One by one, they’ve decided to raise money from the latter to fund the former. It was a puzzle why Britain’s former national telecoms operator continued to be a holdout.On Thursday, the Financial Times reported that BT is in talks to sell a stake in broadband infrastructure division Openreach in a deal that could value it at 20 billion pounds ($24 billion) — twice BT’s market value. The report came a week after the company scrapped its dividend. If true, it would reveal just how urgently the London-based firm needs cash to fund a multibillion-pound full-fiber upgrade program, honor its pension commitments and preserve its investment-grade credit rating, according to Bloomberg Intelligence analyst Matthew Bloxham. There’s also the 5G network to think about.There would be hurdles to a deal — not least, foreign ownership of Britain’s main fixed network. The FT named Australia’s Macquarie Group Ltd. and an unidentified sovereign wealth fund as the potential investors. What's more, Jansen bought 2 million pounds of shares this week — if a deal really were in the works, it's unlikely that BT's compliance team would have permitted such a trade.BT Chief Executive Officer Philip Jansen has already been making a lot of the right moves to get in shape for the challenges ahead. The abandoned dividend and a new cost-cutting program will bring savings of some 5 billion pounds over the next five years, while the U.K. government has pledged a further 5 billion pounds to accelerate the rollout of fiber optic networks. But it’s hard to look beyond the huge appetite for network infrastructure, and the valuations similar assets have attracted.Just last week, Liberty Global Plc’s British broadband business was valued at 9.3 times Ebitda (a measure of operating performance) in a deal to combine it with Telefonica SA’s local mobile unit. BT as a whole is valued at just 1.3 times earnings on the same basis. The operator might have acted sooner were it not for Chairman Jan du Plessis’s staunch opposition to any divestment. Shortly after announcing Jansen’s appointment as CEO in 2018, du Plessis told the Daily Telegraph that 100% ownership of the division was best for “BT, for Openreach and for our stakeholders.” Just last week, when asked about the possible separation of the unit, Jansen responded, “Not now.”But selling a minority stake in the unit looks like the right move to shore up the company’s balance sheet. The right price would help BT stomach the humble pie brought on by a reversal of strategy, and reassure investors that, yes, even after the network investments, one day, the dividend will return.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
China presented a mixed picture of its recovery on Friday as it reported industrial production and retail sales data for April. Industrial production increased 3.9% year-on-year, beating analyst forecasts of a 1.5% increase prepared by Investing.com. Meanwhile, retail sales slumped 7.5% year-on-year, against predictions of a 7% decrease.
BT Group Plc <BT.L> is in talks to sell a multi-billion pound stake in its wholly owned network subsidiary Openreach to infrastructure investors to help fund an ambitious expansion in fibre broadband, the Financial Times reported on Thursday. The FT said potential investors, including Australian investment firm Macquarie Group Ltd <MQG.AX> and a sovereign wealth fund, had held talks in the last three weeks with the former telecoms monopoly. Macquarie, however, was not interested in a deal, a source close to the investment firm told Reuters.
Investments banks cut jobs at the fastest pace in six years during a first quarter in 2020 even though the coronavirus pandemic triggered a surge in volatility and boosted revenues to a five-year high, data published on Wednesday by research firm Coalition showed. While investment banks have benefited from the short-term increase in trading, they are expected to be hit hard by a global recession triggered by the COVID-19 crisis and have already imposed hiring freezes. Coalition's data showed that the banks' revenues from fixed income, currencies, and commodities had their strongest first quarter since 2015, surging 20% to 22.7 billion dollars, as the financial turmoil from the coronavirus crisis prompted a spike in trading.
Macquarie's <MQG.AX> Green Investment Group (GIG) and Scottish offshore wind developer Renewable Infrastructure Development Group have partnered to compete in the next round of leasing for offshore wind development in Scotland, they said on Monday. ScotWind, the next round of seabed leasing for offshore wind development off the Scottish coast, is due to be launched by Crown Estate Scotland soon. Crown Estate Scotland has said that it has completed preparation of leasing documentation and is working with the Scottish government to finalise and formally launch Scotland’s first round of offshore wind leasing for a decade.
The Macquarie (ASX:MQG) share price has risen by 19.7% over the past month and it’s currently trading at 96.92. For investors considering whether to buy, hold8230;
It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks...
Good quality companies can offer a lot of comfort to investors. They tend to be strong, stable, profitable firms that deliver predictable returns, have pricing8230;
Macquarie (ASX:MQG) provides asset management, leasing and asset financing, retail banking and wealth management, market access, commodity trading, investment8230;
Don’t expect Russia or Saudi Arabia to bail out shale again. Balancing the oil demand destruction resulting from the global spread of the Covid-19 virus requires action from all producers, and the leaders to make it happen.(Bloomberg Opinion) -- The forecasts for oil demand are grim. Analysts from Goldman Sachs Group to Macquarie Group and commodities trader Trafigura Group estimate the peak hit to global demand will be anywhere from 8 million barrels a day to 11.4 million. Consultancy IHS Markit says global oil markets face the possibility of the biggest crude surplus ever recorded. That is too big for any single producer, or small group of producers, to deal with alone. And it’s become painfully clear that they have no appetite to do so anyway.In the space of two weeks Saudi Arabia has gone from being threatened with legal action in the U.S. for holding oil off the market to facing calls for legal action against it for flooding the market with it. It’s not lost on the kingdom's leaders that the people who accused them of artificially inflating the price of oil by not pumping at capacity are the same ones who are now accusing the country of dumping crude since it opened the taps.Don’t be surprised that it has no desire to ride to anyone’s rescue. No doubt it would only be pilloried again for pushing prices up as soon as motorists complain about the cost of filling their tanks.We have all become too used to Saudi Arabia (and the others in the Organization of Petroleum Exporting Countries) balancing supply and demand while the rest of the world pours cash into pumping as much as it can — even while destroying shareholder value on the way. Three years ago I suggested that U.S. lawmakers should applaud OPEC's market management — now I'm going to argue that they need to go further and join them in it.The virus-related demand destruction will pass at some point, and the time will come when the world will need everyone to be pumping again. It makes no sense to allow the shale industry to be hollowed out, and why should the U.S. or other large producers expect someone else to sacrifice production when they’re not willing to give up any of their own? Soaking up crude by putting it back underground might bring temporary relief — if the Department of Energy can find enough high-sulfur crude pumped by small American producers — but it won't be long until the Strategic Petroleum Reserve is full.Dealing with the oil crisis — just like dealing with the wider health and economic crisis — needs a joined-up international response and leaders worthy of that name to lead it.Sadly, at the moment we seem to be locked into a cycle of finger pointing and tough-guy posturing. Crown Prince Mohammed bin Salman, the de facto leader of Saudi Arabia, appears content with what my colleague Javier Blas described as a period of Darwinian survival of the fittest. Russian President Vladimir Putin says he won't yield to Saudi "blackmail." While Russia would like higher oil prices — what producer wouldn’t — it’s not prepared to act alone, or with a small group of other producers, to keep the rest afloat. Meanwhile, in the U.S., Donald Trump is being pressed by some to consider an import tariff, or other sanctions, on Saudi and Russian crude.But the time for playing the blame game is past. Whether or not Saudi Arabia and Russia did the right thing by initiating a production free-for-all, any solution has now gone far beyond both OPEC and its wider OPEC+ coalition. On Thursday, Trump said he could intervene in an oil-price war between Russia and Saudi Arabia that has left U.S. oil drillers reeling. The time to do so is now. Not by slapping trade barriers on their oil, but by using his deal-making skills to bring them together to agree a united response that includes America and the rest of the world.The U.S., Saudi Arabia and Russia — the world's three biggest oil producers (by far) in that order — should agree deep, but temporary output restraint. Each needs to bring its allies along to share the burden. This shouldn't become an open-ended OPEC++ arrangement, but a one-off, time-limited agreement.It will be painful for oil companies everywhere and I have no doubt there will be howls of protest. But the alternative is the death of the shale sector or, if taken to extremes, possibly even some kind of a war in the Middle East to halt supply.While striking such a deal won’t be easy, there are signs of willingness to help make it happen. The Texas Railroad Commission has signaled its readiness to be part of a solution. I’m sure other U.S. states and Canada will follow.Saudi Arabia and Russia have both decided that high-cost producers outside the OPEC+ group must finally share the burden of balancing the market — if they won't, those high-cost producers may find they bear it all. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Julian Lee is an oil strategist for Bloomberg. Previously he worked as a senior analyst at the Centre for Global Energy Studies.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Macquarie Infrastructure Corporation (NYSE: MIC) today issued the following statement regarding reports that it was involved in a transaction for Cincinnati Bell.
Australia's Macquarie Group <MQG.AX> asked most of its 15,700 staff to work from home, while the headquarters of the country's No. 3 lender National Australia Bank <NAB.AX> were evacuated on Tuesday after an employee tested positive for coronavirus. Macquarie's Chief Operating Officer Nicole Sorbara sent an email to its global workforce on Tuesday, saying that employees in all regions "should work from home until further notice", the Australian Financial Review reported. Reuters did not review the memo but a Macquarie spokeswoman confirmed the email and said there was a small amount of people who would be required to be at their offices.
Unfortunately for some shareholders, the Macquarie Group (ASX:MQG) share price has dived 31% in the last thirty days...
The global head of crude trading at Australia's top investment bank, Macquarie Group <MQG.AX>, has left the firm, it confirmed on Friday, but did not say why. As executive director, Eiman Alian headed the global crude oil and fuel desks, numbering seven people, in Houston, Texas. Macquarie spokesman Paul Marriott declined to comment on the reason for the departure, as the bank nears the end of the 2020 financial year on March 31, before a blackout period prior to its May results announcement.
We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are...
(Bloomberg) -- Saxo Bank Hong Kong’s former top executive is joining OSL, one of Asia’s biggest digital asset platforms for professional investors.Matt Long, who until recently was the Danish bank’s Hong Kong CEO, will head OSL’s distribution activities, including institutional and white-label sales and its prime brokerage business, OSL said in a statement today.Long joins the growing list of bankers and investors from traditional financial companies that have made the jump to the crypto industry. Major coins have rallied this year as fears of the spreading coronavirus rocked markets around the world. Bitcoin is now trading above $9,500, at its highest levels since late October. And products like options on Bitcoin futures show signs of boosting institutional interest in the asset class.OSL, a unit of Hong Kong-based BC Group, is a digital-asset platform offering things like exchange and custody services, and software solutions for institutional clients. The digital asset arm posted 41.6 million yuan ($6 million) in revenue for 2019’s first half, or about half of the group’s total revenue for this period, according to BC Group’s interim report.Long joined Saxo Bank in December 2017, according to his LinkedIn profile, which shows that prior to Saxo he held senior posts at investment banks including Australia and New Zealand Banking Group Ltd. and Macquarie Group Ltd.To contact the reporter on this story: Zheping Huang in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Joanna Ossinger, Colum MurphyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- “The Balkans” — according to remark often attributed to Winston Churchill — “produce more history than they can consume.” Precious-metal traders betting on the record surge in palladium prices might want to draw a similar lesson. That’s because production and consumption of palladium and its sister-metal platinum in one tiny Balkan state are giving crucial clues to the way producers of automobile catalytic converters use the two elements. This in turn is likely to affect the path of prices for both metals.As we’ve written, there are strong fundamental underpinnings to the extraordinary rally that’s seen palladium prices increase nearly fivefold in the past four years, at a time when platinum is up a mere 25%. Both metals have extensive industrial uses in the converters that strip carbon monoxide and nitrogen oxides from car exhausts. Supply and demand dynamics have conspired recently to push up palladium prices at the expense of platinum. Sales of new diesel cars, which tend to use more platinum, have been hit by the aftermath of the diesel emissions-testing scandal, putting the preponderance of demand on palladium-heavy gasoline vehicles. At the same time, South Africa’s platinum-mining industry has been struggling with low profitability, which has helped to keep supply of its palladium byproduct back from the market. Meanwhile, vehicle-emissions standards have been tightening in Europe, China and other countries, increasing demand for catalysts to clear up exhaust fumes.The normal solution to this sort of situation is substitution. Palladium had few uses until the rise of the catalytic converter in the 1970s pushed chemists to try it out as an alternative to platinum. At some point, the current price mismatch between the two metals should cause the pendulum to swing the other way, so that manufacturers reformulate their autocatalysts to use less palladium and more cheap platinum.That’s the theory, at any rate. The question is whether substitution is actually happening.Matthew Turner, a former precious metals analyst at Macquarie Group, has spotted one way for traders to keep an eye on that question. Johnson Matthey Plc, one of the world’s biggest producers of platinum-group metals, operates a major catalytic converter plant in Skopje, the capital of the Balkan republic of North Macedonia.This offers a unique window into the generally secretive business of autocatalyst recipes. North Macedonia has no domestic supply of platinum-group metals, and local new-car sales amount to only a few thousand units a year. That’s handy, because the country breaks out the metals it’s importing in standard trade disclosures, giving investors a pretty good proxy for the proportions being used in Matthey’s emissions-control devices.The figures won’t reassure palladium bears. If anything, matters are heading in the opposite direction. From a period a few years ago when the ratio between platinum and palladium imports was around 3:1, for much of the past year it’s tightened to around 1.8:1, implying a yet more palladium-dense catalyst mix. Trailing 12-month platinum imports in October, the last month for which data is available, were up just 3.9% from two years earlier; those of palladium were up 61%.It would be wise to treat this information with a smidgen of caution. While catalysts are North Macedonia’s biggest export, the country still accounts for less than 10% of the global cross-border trade in such products — and that’s only a small part of the catalyst market as a whole, when you factor in domestic consumption. The data also only tell you about the activity of one plant, which might not be representative of the industry as a whole. Importantly, the Skopje factory was set up to produce diesel catalysts, so gives us few clues as to what’s happening in the gasoline end of the autocatalyst market.On top of that, Matthey is itself a major player in the platinum-group metals trade, and is no doubt wise to any efforts to use this data as a window on its commercial secrets. If it moves some excess palladium inventory to the Balkans, it’s not impossible that it could end up getting cheaper prices on its platinum from traders watching the North Macedonian trade figures — which could be useful, if you were planning to switch to a more platinum-dense catalyst mix.Still, the resilience of North Macedonian palladium imports should give anyone expecting this bubble to deflate overnight reason to pause.Most automobiles have just five grams or so of autocatalysts in them, meaning that even current prices have only driven your car’s platinum-group metal content up from around $150 to $300 — well below the $1,000 you’d spend to replace the converter itself. And for all the potential for a boost in platinum prices — the net long position held by hedge funds is now at a record high — there’s just no sign yet of a supply surge or a change in the chemistry mix that would be needed to end palladium’s boom.Without that sort of catalyst, prices could be elevated for a while.To contact the author of this story: David Fickling at firstname.lastname@example.orgTo contact the editor responsible for this story: Rachel Rosenthal at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.