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Energy & Utilities Roundup: Market Talk

21 Mar 2018 8:20 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.

0617 GMT - Asian credit markets have gotten quieter ahead of the looming FOMC rat hike, with companies preferring to wait to launch new deals and investors seeing no reason to buy right now. At least 18 dollar-bond deals are waiting to be launched in Asia, according to market participants. The include India's JSW Steel, which is looking to raise up to $1 billion from 5- and 10-year bonds. The firm says it has no immediate need for cash but wants to raise the money anyway to lock in lower interest cost and repay debt ahead of future rate hikes. But Thailand's largest independent power producer didn't wait. Ratchaburi Electricity, in a rare visit to the bond market, yesterday sold $300 million of 10-year bonds. It got more than $500 million of orders. (manju.dalal@wsj.com)

0538 GMT - Australian stocks lagged Wednesday as gains in commodity names was largely offset by declines in health care and REITs. The S&P/ASX 200 rose 0.2% to 5950.3 after having fallen in 4 of the prior 6 days. The energy sector climbed 1.2% on oil's 2% jump Tuesday. But health care fell 0.6% and REITs shed 0.5% ahead of the Fed's likely latest rate hike on Wednesday. Hearing-aid firm Cochlear shed 1.8%. (kevin.kingsbury@wsj.com; @kevinkingsbury)

0422 GMT - A government-funded report into a multibillion-dollar dam proposed for Australia's northeast has found the project could be economically viable. Supporters of the project near Townsville, first proposed in the 1930s, say it could sustain an expanded beef industry and irrigated sugarcane and sorghum while easing power shortages along Australia's eastern seaboard. It would have capacity to generate 12,000 megawatts of electricity; the average Australian home uses 7MW/year. The government commissioned a A$2.2 million study in 2017 from a fund set up to accelerate dam-building projects in the underdeveloped north. The report is a precursor to attracting private and public investment for the project. (rob.taylor@wsj.com)

0228 GMT - Though the jackup-rig market appears to have bottomed amid rising utilization levels, Maybank isn't upbeat yet, saying day charter rates and new construction of rigs needs to pick up. For that to happen, it says global utilization rates need to remain above 85%, based on historical trends. They're currently at 74%, where Maybank expects this year's average to be. For 2019, it sees 83%. (yantoultra.ngui@wsj.com; @yantoultra)

2232 GMT [Dow Jones] Canaccord says the latest flow rates at Comet Ridge's Mahalo coal-seam gas operation in eastern Australia confirm its view that the resource is worth more than Origin Energy's Ironbark field. So, the bull says the value gap between the two projects needs to close. The book value for Ironbark stands at A$279 million so "applying Ironbark's book value per unit to Mahalo yields A$372 million (A$0.55/share) for 2P or A$543 million (A$0.81/share) for 3P net to Comet Ridge," Canaccord says. The broker lifts its price target on Comet Ridge by 20% to A$0.48/share, citing better-than-expected productivity from the Mira 6 horizontal well. (david.winning@wsj.com; @dwinningWSJ)

2207 GMT - Recent appraisal of the FAN oil discovery made by FAR and its joint-venture partners offshore Senegal in 2014 suggests it will at least be a very useful addition to the development of the nearby giant SNE field, Bell Potter says. But it may become a very substantial oil field in its own right. FAR yesterday reported an initial 2C contingent resource of 198 million barrels for the FAN discovery, which is only 20 kilometers from the SNW field albeit in much deeper water. Bell Potter says the initial resource is modest compared to earlier estimates "indicating the ultimate size of the discovery is larger and still to be determined." (david.winning@wsj.com; @dwinningWSJ)

2135 GMT - After visiting energy operations in Papua New Guinea last week, Macquarie has come away more confident that Oil Search is unlikely to need to raise capital for all its expansion projects. It is also more confident in the company's timeline for restarting oil and gas operations there following the big earthquake. That suggests to the investment bank that the next key catalyst for the stock will be an update on drilling in Alaska, any upgrade on the P'nyang project in Papua New Guinea and, most importantly, the government's response and fiscal terms. (robb.stewart@wsj.com; @RobbMStewart)

2127 GMT - Australian stocks appear set to tick higher after gains on Wall Street overnight ahead of the Fed's policy decision. Futures suggest a gain of 7 points at the bell after the S&P/ASX 200 retreated 23.1 yesterday to 5936.4. It's a quiet day ahead for data in Australia, which ANZ says means the focus shifts toward the US central bank in the early hours of tomorrow local time. Energy shares should have a tailwind following a jump in oil prices to three-week highs. (robb.stewart@wsj.com; @RobbMStewart)

2114 GMT - Jefferies expects seaborne coal prices will soften in the near-term after a "surprisingly resilient" period. It is less bearish on the outlook than some, though, saying the picture for supply and demand is undoubtedly mixed. "While we expect demand growth to be tepid, supply constraints and low consensus expectations could offset headwinds and help prices settle into a higher range than the market expects," says Jefferies. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

2048 GMT - Canadian stocks closed higher on Tuesday, as gains in the energy and information technology sectors offset losses in health care and metals and mining. The S&P/TSX Composite Index was up 26.97 points, or 0.2%, to 15616.36. The blue-chip S&P/TSX 60 Index edged up to 923.47. Trading volume was 323.8M, as declines outpaced advances 804 to 792. (maria.armental@wsj.com; @mjarmental)

2009 GMT - Major indexes close with gains as investors prepare for tomorrow's Fed policy announcement and press conference by newly-minted Chairman Jerome Powell. Social media shares continue to fall as scrutiny of Facebook's data usage grows. Facebook off another 2.6%, and down 9% over two sessions. Twitter falls 10% after a modest decline yesterday. Oil prices climbed more than 2%, above $63 a barrel, on prospects that the US may take a more aggressive stance toward Iran. Treasury prices fall, lifting the 10-year yield to 2.88%. DJIA gains 116 points to 24727, the S&P 500 adds 4 to 2716 and the Nasdaq climbs 20 to 7364. (patrick.sheridan@wsj.com)

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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