In today’s top stories, Tencent is set to invest in Ubisoft, Wedbush praises Apple’s product launch and Repsol plans sell off its upstream business in an effort to move away from fossil fuels. In other news, Barclays offers its low-volatility stock picks and Capstone ups its investment in Asia.
Tencent to invest €300m in Ubisoft
Video games developer Ubisoft [UBI.PA] was reportedly attracting potential buyers earlier this year, but any hopes of a takeover seem to have been scuppered with Tencent [0700.HK] set to invest €300m in the French firm. Ubisoft shares were trading down 12% on Wednesday morning, even though the investment suggests a “vote of confidence” in the rapidly expanding video game industry, according to MarketWatch.
Wedbush praises iPhone 14 launch
Apple’s [AAPL] annual iPhone launches are always events that create a lot of buzz and excitement, and this year is no exception. Tweeting at the end of August, Wedbush analyst Dan Ives said the fact the launch is happening, despite “China factory shutdowns is simply a stunning job”. Apple shares fell slightly on Tuesday ahead of the launch, but as Bernstein pointed out to CNBC, the stock doesn’t typically have a significant reaction to iPhone announcements.
Barclays’ low volatility picks
With equity markets showing signs of weakness, investors should turn to low volatility strategies, according to Barclays analysts. In a note to clients over the weekend, seen by CNBC, they identified low-volatility, large-cap stocks that are rated overweight and have at least a 10% upside from their price target. The lists include McDonald’s [MCD], Keurig Dr Pepper [KDP], Coca-Cola [KO] and Mondelez International [MDLZ].
Repsol to sell a quarter of its upstream business
As part of the company’s transition away from fossil fuels, Spanish oil giant Repsol [REP.MC] is to sell a quarter of its exploration and production business for $3.4bn to a US private equity firm. The downsizing will help Repsol raise funds to develop low-emission projects. Meanwhile, fellow energy giant Chevron [CVX] was being urged on Tuesday by prominent ESG critic Vivek Ramaswamy to increase its oil output over the next 10 years.
Capstone to allocate $1.5bn to Asia
Hedge fund Capstone plans to plough $1.5bn of risk capital into Asia by the second quarter of 2024. The fund opened its new Hong Kong office last month, which was chosen as a regional base due to its “wealth of talent”, CEO Paul Britton told Bloomberg. Hong Kong is hosting hedge fund managers from around the world on Wednesday for the Sohn investment conference, though last year’s bullish outlook has been replaced by fears of economic headwinds.
Earnings preview: Melrose Industries
Ahead of its H1 earnings announcement this morning, Melrose Industries [MRO.L] was reportedly looking to offload aerospace giant GKN. Melrose CEO told This is Money in July that “all options” were on the table. The UK firm buys up manufacturing companies and turns them around for a sale. In 2021, it spent £190m on restructuring GKN and a further £200m on research and development.
Energy majors’ share prices soar
With the energy crisis worsening and household bills rising to eye-watering levels, the share prices of BP [BP.L], Shell [SHEL.L] and TotalEnergies [TTE.PA] have outperformed. All three stocks are up 41.6%, 46.3% and 20.7% year-to-date, respectively, as of 6 September. Nonetheless, the supermajors are under pressure to lower their emissions and fossil fuel burning. Back in June, BP acquired a 40% stake in a mega green hydrogen project in Australia.
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