In today’s top stories, S&P Global’s unequivocal downgrade of Nissan has set alarm bells clanging, while Volkswagen has been lured stateside by the Inflation Reduction Act. Elsewhere, Indonesia’s nickel export ban has proved to be shot in the arm for the country’s EV sector, and the US Department of Justice has stepped in to block JetBlue’s [JBLU] proposed $3.8bn acquisition of Spirit Airlines [SAVE]. Lastly, Chipmaker Intel [INTC] has asked the German government for an additional €5bn in subsidies to support plans to build a factory in the country.
Nissan’s credit rating cut
S&P Global’s decision to cut Nissan [7201.T] to ‘junk’ status at the start of the week has got alarm bells ringing. It was only a year ago that its partner Renault [RNO.PA] hit a wall, but since then the French automaker’s share price has gained 98.3%, compared to a 30.1% gain for Nissan’s. “Renault was long considered the weak member of the alliance… The table may be turning now,” Stifel analyst Pierre-Yves Quéméner told Bloomberg.
VW favours US for battery plant
German automaker Volkswagen Group (VW) [VOW3.DE] favours building a battery plant in North America over Eastern Europe. According to the Financial Times, VW anticipates that it stands to benefit from €9bn to €10bn of subsidies made available through the US Inflation Reduction Act. Just last week, VW announced plans to build a $2bn electric vehicle (EV) factory in South Carolina. Vietnamese EV maker VinFast, which filed its IPO in December, is optimistic about its entry into the US auto market, despite weakening demand.
Indonesia’s nickel boom
The Indonesian president’s decision to ban exports of nickel ore is boosting the country’s raw material production and strengthening its battery supply chain. Last summer, LG Energy Solution [373220.KS] unveiled a $9.8bn investment in the country’s EV industry, including nickel processing plants. According to the Financial Times, Merdeka Battery Materials is considering a local listing as a result. “That in turn allows the market to re-rate how it thinks about Indonesia,” Siddharth Mathur, head of Asia-Pacific emerging markets research for BNP Paribas, told the paper.
DOJ to block JetBlue-Spirit Airlines merger
The US Department of Justice has sued to block JetBlue’s [JBLU] proposed $3.8bn acquisition of Spirit Airlines [SAVE]. The merger would do away with Spirit’s unique offering of around half of ultra-low-cost airline seats and travellers could face higher fares as a result, the lawsuit stated. “The hurdle has gone up clearly… This is going to slow things down, but it won't stop it,” Addison Schonland, partner at consulting firm AirInsight, told Reuters.
Intel wants $5bn more subsidies from Germany
Chipmaker Intel [INTC] has asked the German government for an additional €4bn to €5bn in subsidies to support plans to build a factory in the country. “Disruptions in the global economy have resulted in increased costs, from construction materials to energy,” read a statement. Higher input costs mean Intel expects to spend €30bn in Germany, up from previous guidance of €17bn, according to Bloomberg. ASML [ASML] boss Peter Wennink is worried that chip sanctions on China will increase the risk of IP theft.
Disclaimer Past performance is not a reliable indicator of future results.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.
*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.