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Energy & Utilities Roundup: Market Talk

23 Jan 2018 9:20 am

The latest Market Talks covering Energy and Utilities. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

0917 GMT - Though Malaysia's stock benchmark logged another 2 3/4-year closing high today amid afternoon strength and regional gains, some oil-services stocks continued to take a beating. The FBM KLCI rose 0.3% to 1838.04 as gainers topped decliners 649-357. While Hong Leong Financial gained 1.2% and conglomerate Sime Darby jumped 3.6%, Sumatec slumped 8.7% and UMW Oil fell 1.4%. (yantoultra.ngui@wsj.com; @yantoultra)

0628 GMT - JPMorgan is anticipating further restructuring in China's power sector, which would be in line with the government's reform of state-owned enterprises. It thinks the 4 Hong Kong-listed coal-fired power producers could be halved with Huaneng and China Power combining and Huadian and Datang doing the same. Both resulting firms would have similar asset sizes and a more-balanced mix of generation capacity. That as Huaneng and Datang are highly leveraged. (john.wu@wsj.com)

0628 GMT - Average Brent crude prices will edge up to the higher end of DBS's forecast range of US$60-$65 a barrel in 2018, compared with US$55 a barrel in 2017, the bank says. DBS cites a rising oil price trend at the start of the year. The higher prices should spur a capex recovery and drive positive stock market sentiment for the sector, it adds. "Limelight could slowly switch to offshore and gas service providers," it says, flagging Singapore-listed PACC Offshore as a key beneficiary of the trend. It is also bullish on rig builders Keppel and Sembcorp. Sustainable oil prices above US$60 should benefit players down the value chain, it adds. (saurabh.chaturvedi@wsj.com; @journosaurabh)

0529 GMT - Australia's stock benchmark logged its biggest gain in nearly 3 weeks to end a 5-day losing streak amid noted advances today in multiple regional markets. The S&P/ASX 200 rose 0.8% to 6037 with the major banks rebounding; Westpac and ANZ climbed more than 1%. Energy stocks were also up while ResMed jumped 8.4% following its F2Q report. (robb.stewart@wsj.com; @RobbMStewart)

0140 GMT - Anton Oilfield's 4Q data was encouraging, says Lucror Analytics, with new orders surging 93% and dramatic improvement to operating cash flow. The firm sees a "slow but gradual improvement" to Anton's financial profile, with the Chinese oil-service provider's refinancing risks now manageable after 4Q's debt sale. Shares jump 8%, moving back toward last week's 1-year high. Anton has surged 40% this month after sliding 21% last year. (joanne.chiu@wsj.com; @joannechiuhk)

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0107 GMT - Chatter about turning a Singapore shipyard into a waterfront township could be another reason behind Sembcorp Marine's ongoing stock rally. Noting that such talks have resurfaced, DBS says redevelopment of the 87-hectare Admiralty Yard could potentially add as much as S$1/share to the rigbuilder's fair value. The "timing is also ripe" for such a move as the company is looking to relocate all its Singapore shipyards into one big one by 2024. Limited private residential options in the Admiralty area helps, the bank adds. But it cautions that SembMarine lacks expertise in real estate. M&A chatter has been helping fuel SembMarine shares this month; they're up another 3.8% to put January's surge at 35%. (saurabh.chaturvedi@wsj.com; @journosaurabh) -0-

0017 GMT - Oil Search's early 2018 production guidance is 4% below what RBC forecasted at the midpoint, with the shortfall at the Papua New Guinea LNG export project. But following its in-line 4Q report, shares are 0.7% higher after sliding 3.9% last week and as oil prices have rebounded some to start this week. (robb.stewart@wsj.com; @RobbMStewart)

2205 GMT [Dow Jones] Shares of agribusiness giant Bunge are up 22% since the start of the year, mainly lifted by a WSJ report Friday that rival Archer Daniels Midland had floated the prospect of a takeover. But Bunge's not the only one. ADM investors seem enthused about the potential scale and synergies such a combination could bring, lifting ADM's shares 4.4% Monday, and the fervor has spilled over into other major grain companies. The Andersons, a smaller Ohio firm often speculated upon as a takeover candidate, settled 4.8% higher while Green Plains, one of the largest U.S. ethanol makers, surged 7.8%. Bunge itself closed 5.9% higher. ( jacob.bunge@wsj.com ; @jacobbunge)

2232 GMT - ANZ-Roy Morgan Australian Consumer Confidence fell 3.3% last week following three consecutively strong reports. The fall was broad based, with views towards current finances leading the pullback. Talk of electricity blackouts and a proposed rail strike in Sydney may have weighed on overall sentiment. It is also possible that the New Year return to work was a factor for some, says David Plank, economist at ANZ. A jump in gas prices across Melbourne and Brisbane amidst an environment of low wage growth likely also damped confidence. (james.glynn@wsj.com; @JamesGlynnWSJ)

2041 GMT - Plains All American Pipeline says it will move ahead with a new pipeline that will take up to 585,000 barrels of oil per day out of the Permian Basin. The company said Monday it received enough commitments during its open season for the Cactus II Pipeline to build the project. The line is a combination of existing pipelines and two new pipelines that, combined, will extend from the booming oil fields of West Texas to refiners and export facilities in Corpus Christi. The company said it would conduct a second binding open season and is planning for the pipeline to be operational by late 2019. (christopher.matthews@wsj.com; @cmatthews9)

2038 GMT - Australian shares look set to take another stab at snapping their run lower, tracking fresh overnight strength on Wall Street. Futures point to an opening rise of about 30 points after the S&P/ASX 200 notched a 5th straight decline with a fall of 13.9 to 5991.9. Still, IG argues it's hard to be bullish until the index sustains a move through 6040, so it wouldn't be surprised if the market's advance fades and grinds lower. It notes Commonwealth Bank's ADRs suggest the stock will open 0.4% higher, while BHP's hints at a flat start. Commodities were broadly higher, and ANZ notes crude oil recovered, base metals were up across the board though iron ore struggled to hold gains seen Friday. (robb.stewart@wsj.com; @RobbMStewart)

2121 GMT - New Zealand's NZ50 index opens 0.1% lower at 8325.93, after global markets were buoyed by US corporate earnings and US lawmakers agreed on a deal to end the brief government shutdown. Z Energy is 2.6% lower in early trade after pipeline outages and higher crude oil prices saw it lower its FY18 earnings guidance. Meanwhile, Metlifecare is up 2%. (ben.collins@wsj.com)

(END) Dow Jones Newswires

January 23, 2018 04:20 ET (09:20 GMT)

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