Volkswagen Considers Listing Minority Stake in Porsche
Topic of the day
Volkswagen AG is considering listing as much as 25% of its sports car maker Porsche AG, a move that analysts said could boost the market value of the entire Volkswagen group and raise cash needed for investment in electric vehicles and new technology. The idea of listing Porsche or selling a stake in luxury car maker Audi isn't new within Volkswagen's top management, but people familiar with the company's thinking said talks within Volkswagen have taken on greater urgency as the company pivots hard toward electric vehicles and sees its market value dwarfed by technology rivals such as Tesla Inc. The discussions are still at a very early stage, the people said, adding that if Volkswagen decided to move forward with the listing, it might not happen until next year, if at all. Volkswagen shares rose almost 4% to EUR167.80, equivalent to about $203, in late afternoon trading on the Frankfurt stock exchange. The company declined to comment about a potential listing of Porsche.
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After early gains, the SMI turned down to close 0.8 percent lower on 10,718 points Thursday, weighed down by weak US weekly labour market figures and inflation worries. Yet many traders still see upside potential as global vaccine campaigns raise hopes the economy will reopen soon. Credit Suisse crashed 3.2 percent on posting its first quarterly decline since 2017 in Q4 2020, due to higher reserves for legal disputes and a valuation adjustment for its York Capital Management stake. Competitor UBS fell 1.7 percent. Nestle slid 1.1 percent despite a positive reception to its 2020 figures, with net profit of CHF 12.23 billion above the consensus estimate of CHF 11.97 billion and an outlook for moderate growth and moderately higher profitability. Roche fell 0.5 percent, while Novartis slid 1 percent. The SMI’s only gainers were ABB, up 0.6 percent, and Givaudan, up 0.3 percent. Second-tier stock Temenos surged 19.3 percent after its 2025 medium-term goals were well received by analysts.
European stocks drop as falling crude prices weigh on oil shares and banking stocks retreat after Barclays increased provisions for bad debts. The Stoxx Europe 600 falls 0.8%, the FTSE 100 recedes 1.4%, the DAX edges 0.2% lower and the CAC-40 backtracks 0.6%. The price of a barrel of Brent crude drops 0.5% to $63.99, hitting the likes of Eni, Total, BP and Shell. "The slide in Barclays's stock price has set the tone for HSBC and Lloyds and the retreat in the oil market has hurt the energy titans," says David Madden at CMC Markets. "Sentiment in Europe was a little downbeat in the morning, but selling pressure picked up as US index futures moved lower in the afternoon."Airbus's fourth-quarter results were better than expected, with revenue 3% above consensus and adjusted earnings before interest, taxes, and amortization 10% above views, JPMorgan Cazenove says. While the European plane maker's 2021 guidance is lower than expected by the market, it is is "probably very conservative," the brokerage says. "We don't think investors are too focused on 2021 anyway; the key driver for the shares is the road map back to "normalised" earnings by roughly 2023/24," JPM Cazenove says. Carrefour SA said Thursday that its profit fell last year, with revenue also slipping. The French grocer said its 2020 net profit was 641 million euros ($771.9 million), down from EUR1.13 billion a year earlier. Net sales fell 2.3% to EUR70.72 billion. At constant exchange rate, sales were up 4.3%. Carrefour is proposing a cash dividend of EUR0.48 a share for 2020. The company confirmed its 2022 strategic plan. It is targeting EUR2.4 billion in additional cost savings by 2023 on an annual basis, as well as net free cash flow of more than EUR1 billion a year from 2021.
Stocks dropped, weighed down by losses among communications and technology companies. US-stocks have taken a breather in recent sessions after powering higher for much of 2021. Money managers see several reasons to stay cautious, ranging from lofty valuations across parts of the market to the pace of the economy's recovery. Data Thursday showed 861,000 workers sought unemployment benefits last week, more than economists had expected. Still, many investors remain upbeat about the outlook for stocks. They say the possibility of more fiscal stimulus, progress on distributing Covid-19 vaccines and gradual reopening of the economy should help drive earnings higher throughout the year. The Dow Jones Industrial Average fell 119.68 points, or 0.4%, to 31493.34. The S&P 500 declined 17.36 points, or 0.4%, to 3913.97 and the Nasdaq Composite lost 100.13 points, or 0.7%, to 13865.36, adding to losses after a volatile day for tech stocks on Wednesday. Tech stocks led declines in the broader market Thursday, with Facebook and Zoom Video Communications each falling at least 1%.In Washington, Janet Yellen defended the size of the President Biden's $1.9 trillion relief package, saying in an interview with CNBC on Thursday that she hopes the measure will be enacted in coming weeks. "We are digging out of a deep hole," Ms. Yellen said of the economic slump induced by the Covid-19 pandemic.
On Friday, the East Asian stock markets follow the lighter trend on Wall Street from the previous evening. The only moderate gain in Shanghai on the previous day, after the week-long trading break there, also caused some disillusionment in Asia. Most of the neighbouring stock exchanges saw their indices rise more sharply during this period. As already observed the previous day, the indices also tended downwards at the end of the week. In Tokyo, the Nikkei index is now down by around 0.8 per cent to 29,992 points.
U.S. government bonds lacked direction in Asia, with the yield on the benchmark 10-year Treasury note little changed from Thursday's settlement level.
UBS lowers the Kering target to 568 (624) EUR – Neutral
CS lowers the Beiersdorf target to 80 (85) EUR – Underperform
HSBC lowers the Ahold Delhaize target to 24 (25) EUR – Hold
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