In today’s top stories, Berkshire Hathaway trimmed its stake in BYD, Snap is set to lay off 20% of its workforce and Toyota plans to invest $5.3bn in battery production. Meanwhile, Baidu claims its robotaxi has already captured 10% of the ride-hailing market in a Beijing suburb and Morgan Stanley names stocks with robust balance sheets.
BYD falls after Buffett sells
Hong Kong-listed shares of Chinese conglomerate BYD [1211.HK] closed 7.9% lower on Wednesday following the news that Warren Buffett’s Berkshire Hathaway [BRK-B] had trimmed its position. The move had been feared ever since a 20.49% stake identical to its most recently reported position entered Hong Kong’s clearing system in July. Yang Liu, CIO at Atlantis Investment, told CNBC that it’s a sign Buffett might be nervous about Chinese consumer confidence.
Baidu’s robotaxi claim
Search engine giant Baidu [9888.HK] has claimed that its robotaxis account for 10% of the ride-hailing market in a suburb of Beijing, it announced on Tuesday’s earnings call. CNBC investigated the claim and concluded the rides to be “heavily subsidised”. Rules stipulate that passengers must be accompanied, which means the real test will be whether people feel safe sitting in an autonomous vehicle on their own and paying full price for the ride.
Toyota ramps up battery production
Automaker Toyota [TM] has announced plans to invest ¥730bn ($5.3bn) in battery production, of which ¥400bn will go towards ramping up capacity in Japan and the rest towards US manufacturing capabilities. “This is a positive move. In the US, the shift to EVs is accelerating faster than anticipated and there’s also a move to eliminate hybrids,” Hiroki Ihara, Tachibana Securities analyst, told Bloomberg.
Snap to lay off fifth of workforce
After hiring aggressively during the coronavirus pandemic, Snap [SNAP] was reportedly set to start laying off people on Wednesday, according to a report by tech publication The Verge. Up to 20% of employees are at risk with its hardware division likely to be most affected. In August the company cancelled future development of its selfie camera drone, Pixy, just months after it launched.
Morgan Stanley’s cash shelter picks
September could prove to be one of the riskiest months of the year, but some large-cap companies with strong balance sheets could help to shelter investors. Morgan Stanley strategist Todd Castagno screened the Russell 1000 for stocks with a cash-to-enterprise value greater than 3% and free cash flow growth greater than 5%. Castagno’s top 10 picks include Booking Holidays [BKNG], Nike [NKE], Alphabet [GOOGL] and Visa [V], reported CNBC.
Oil majors profit from energy cap rise
While millions of UK households struggle with the rising energy price cap and household bills, oil majors BP [BP.L] and Shell [SHEL.L] have enjoyed bumper profits and seen their share prices soar. Smaller producer Tullow Oil [TLW.L] has underperformed in comparison, largely because there are concerns that a proposed merger with Capricorn is under threat due to shareholders of the latter not deeming it as good value.
Banks bet on blockchain
The banking industry has traditionally been reluctant to embrace new technologies, but BNP Paribas [BNP.PA], Goldman Sachs [GS] and JPMorgan [JPM] are tapping into the blockchain to facilitate transactions and trades and to even offer tokenised bonds. The use of blockchain in banking and financial services had a market size of $1.46bn last year, according to Statista data. This is set to swell to $22.46bn by 2026.
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