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Auto & Transport Roundup: Market Talk

21 Mar 2018 8:20 am

The latest Market Talks covering the Auto and Transport sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

0733 GMT - The Canadian dollar has risen in Asian trading, hitting its best levels in about a week versus other currencies. ACLS' Marshall Gittler attributed that to "reports that the US has dropped a demand in the Nafta talks that all vehicles made in Canada (and Mexico) for export to the US contain at least 50% US content." Motor vehicles and parts make up 1/5 of Canadian exports to America, not far behind energy, he notes. "If there starts to be some optimism about Nafta talks, there could be a serious rebound" for the Canadian dollar, Gittler added. Generally up 0.2%, the loonie is 0.4% higher versus the US dollar at C$1.3020. (kenan.machado@wsj.com)

0648 GMT - If metal prices continue to rise, the adoption of electric vehicles could stall by the early 2020s, Berenberg says. As car maker's ramp up electric-car production, they count on battery costs to decline as scale increases. But over the last year, higher prices for cobalt, lithium and nickel have slowed down this price deflation, Berenberg says. Higher metal prices mean that battery costs may bottom out at a higher price than previously anticipated. In this case, electric-vehicle sales could stagnate once purchase subsidies in China, Europe and the U.S. fall away, says Berenberg.(Max.Bernhard@dowjones.com; @mxbernhard)

0314 GMT - "Encouraging" operational indicators in recent months point to a stabilizing environment for Singapore taxi operators, says OCBC. Industrywide mileage numbers have improved and fleet numbers are stable, the bank notes. For ComfortDelGro, OCBC adds the prospect of higher taxi and train fares could be further reasons for optimism. The bull also notes the next stock catalyst should be regulatory approval of a partnership with Uber. CDG shares are down 20% the past year. (gaurav.raghuvanshi@wsj.com)

0055 GMT - After a 9% drop in new-vehicle sales in Malaysia last month from January amid the Lunar New Year holiday, the country's auto-industry group expects a March rebound that will also be helped by firms looking to deliver vehicles ahead of FY-end. Still, brokers such as TA Securities and CIMB Research remain underweight on the sector, with the latter seeing persistent weakness in consumer sentiment and potential margin erosion from intense competition continuing weigh on the sector. (yantoultra.ngui@wsj.com; @yantoultra)

2340 GMT - An improved balance sheet for MMA Offshore, which supplies vessels to the oil-and-gas industry, after a stock sale and debt amendment helps prompt Shaw & Partners to restart coverage at a buy stock rating and A$0.40 target price. That as operationally, utilization rates appear to have bottomed. "All that remains now is for the market to turn positive, and we believe MMA Offshore is very well-placed to benefit from any uptick" in the oil patch, "especially in its core markets of Australia and Southeast Asia." Shares, flat today at A$0.215, have skidded 23% this year . (david.winning@wsj.com; @dwinningWSJ)

2220 GMT - FedEx's decision to abstain from surcharges on residential deliveries during the peak period helped it win a number of small and medium sized shippers. FedEx CMO Raj Subramaniam says the delivery company picked up "significant business" among those customers, which can be a lot more profitable for the company than the biggest shippers. (paul.ziobro@wsj.com; @pziobro)

2111 GMT - While FedEx's ground business logged higher margins, it's express segment suffered from a host of higher costs that dinged the bottom line. The unit had higher revenue, but that was mostly due to higher prices and currency exchange rates as total volume slipped 1%. FedEx said that it had $170M in extra costs in the business tied to a host of factors, including costs related to peak season, adverse weather and integrating its TNT business. (paul.ziobro@wsj.com; @pziobro)

2048 GMT - FedEx can finally show that the big investments its made to upgrade its ground network are paying off with higher margins. The delivery company's operating margin rose to 12.1% in fiscal 3Q from 11% a year earlier, helped by higher prices and package volume. In addition to the investments in adding capacity and automating facilities, FedEx has been working to get shipping accounts that provide better profits to the company, while turning away shippers that don't pay up. Shares rise 3% after hours. (paul.ziobro@wsj.com; @pziobro)

2043 GMT - FedEx's FY3Q results top expectations on both the top and bottom line, prompting the delivery company to boost its outlook for the year. FedEx cites tax benefits and improved operating results for its raised view. Surprisingly, FedEx also trims its capital spending budget for this fiscal year by $100M to $5.8B at a time when UPS is adding to theirs. It's unclear yet if FedEx made the move as part of a longer pullback in spending or if its just a matter of shifting it around. (paul.ziobro@wsj.com; @pziobro)

2019 GMT - Ride-hail firm Lyft has hired two executives from Alphabet's Google. Nilka Thomas joins as vice president of talent and inclusion, overseeing recruiting and employee relations as well as diversity initiatives. She held HR roles at Google for the last 14 years, including her last position as Director of Global Diversity, Integrity & Governance. Lyft also hires Sam Arons as director of sustainability, to oversee climate impact efforts. He was previously Senior Lead, Energy & Infrastructure at Google. (lauren.weber@wsj.com; @laurenweberWSJ)

1940 GMT - Senior official at National Highway Traffic Safety Administration withholds judgment on cause of fatal crash involving Uber self-driving car that killed pedestrian in Tempe, Ariz. "I do not have preliminary views," said Heidi King, deputy administrator at the US agency charged with overseeing roadway safety during Tuesday Senate hearing. "I await the details of the investigation and the findings regarding the accident before making judgement on any particular event," she said, adding "open investigation" constrains her from sharing certain details. Agency has dispatched special crash investigation team to Arizona and is in contact with Uber; federal, state and local authorities; and Volvo, the car maker Uber relies on for its driverless vehicles. No signs yet of specific safety-defect probe at the agency yet, with King reiterating that regulators will "review information and proceed as warranted." (mike.spector@wsj.com; @MikeSpectorWSJ)

1748 GMT - The Stoxx Europe 600 closes 0.5% higher at 375.57 as the euro falls against the dollar following a drop in German economic confidence. The single currency falls 0.6% to $1.2264 after fears about trade wars caused the German ZEW economic sentiment report to fall to 5.1--an 18-month low. Germany's Dax gains 0.7% and France's CAC-40 rises 0.6%. John Wood Group PLC is the pan-European index's biggest faller, down more than 6% as it swung to a pretax loss in 2017 after an acquisition. Belgian precious-metal refining group Umicore rises 5.7% after comments by speakers at the FT Commodities Global Summit about potential rising demand for commodities needed to make electric car batteries. (philip.waller@wsj.com)

(END) Dow Jones Newswires

March 21, 2018 04:20 ET (08:20 GMT)

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