In today’s top stories, Cameco teams up with Brookfield Renewable Partners to buy Westinghouse Electric, chipmaker Socionext closes 15% higher after its Tokyo IPO and Netflix’s viewing figures are set to be revealed. Meanwhile, cloud services are set to benefit from AI and Ray Dalio warns of negative returns for the next five years.
Cameco announces $7.9bn acquisition
One of the world’s largest suppliers of uranium fuel, Cameco [CCJ], and Brookfield Renewable Partners [BEP] are to acquire nuclear power plant equipment maker Westinghouse Electric for $7.9bn. The energy crisis has put nuclear power back in central focus. “We’re witnessing some of the best market fundamentals we’ve ever seen in the nuclear energy sector," Cameco CEO Tim Gitzel said in a statement.
Socionext rises 15% on debut
Chip startup Socionext [6526.T] had a fairly impressive debut on the Tokyo stock market, closing 15% higher. It “seems to have been strong with long-only funds taking up the deal,” Clarence Chu, Aequitas Research analyst, told Bloomberg. The stock has a more attractive valuation than chipmakers listed in the US and Taiwan, Chu added. The sector has been caught up in a global rout and could be set for its worst year ever.
Netflix’s viewing figures reveal
There’s long been secrecy shrouding Netflix’s [NLFX] viewing figures, but the streaming giant will finally reveal them after signing up to the UK’s ratings body, the Broadcasters' Audience Research Board. Just this week, the production company said Dahmer is more popular than Bridgerton and investors have to take its word for it. In the future, such claims will have to stand up to scrutiny.
Cloud services to benefit from AI
Much has been made about companies bringing AI-enabled products to market that will transform our lives. MKM Partners analyst Rohit Kulkarni believes public cloud services stocks such as Amazon [AMZN] will be early beneficiaries. “We are quite convinced that we are on the cusp of accelerating Big Tech AI Wars, however, it is unclear who holds the early edge as far as commercial success is concerned,” Kulkarni wrote in a note seen by MarketWatch.
Ray Dalio expects poor five-year returns
Legendary hedge fund manager Ray Dalio expects revolutionary changes in AI and computerisation to have a huge impact over the next five years, especially in healthcare. However, “we will be reading about the negative or poor real returns in much the same way as we had in the 1970s,” he told MarketWatch in an interview. Fellow fund manager David Einhorn told Bloomberg on Tuesday that value investing may be a thing of the past.
Credit Suisse finds itself in a hole
Swiss bank Credit Suisse [CS] dropped to a 52-week low on 3 October as investors were spooked by news of a capital hole. While it’s unlikely to end up being the Lehman Brothers of Europe, the lender is clearly in trouble. All eyes will be on the trading update on 27 October. JPMorgan Chase analyst Kian Abouhossein wrote in a note that any restructuring of its investment banking needs to be “decisive” and “not piecemeal”.
Asos share price gets dressing down
The embattled fast fashion retailer Asos [ASC.L] has become one of the most shorted FTSE stocks over the past few months, down 77.4% year-to-date, as it became the focus of regulators investigating greenwashing claims. Full-year results being released on 19 October are unlikely to lift the share price due to inflation hitting sales and profits. HSBC analyst Paul Rossington is “concerned about the impact of increased competition in international markets, particularly in Europe.”
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