BP Share Price: pressure builds over climate goals ahead of AGM

Liam Roche
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BP Share Price: pressure builds over climate goals ahead of AGM

BP Share Price

The BP share price (LON:BP) is down by 2.09% on Tuesday following a period of solid gains in April when it reached as high as 318.5p. The FTSE 100 oil giant’s upwards movement came alongside increases in the price of Brent crude oil and West Texas Intermediate. Over a longer period BP’s share performance holds up well. Since the beginning of the year its stock value is up by 21.4%. With the company’s much anticipated annual general meeting tomorrow, and its recent announcement of its intention to buy back shares, investors will be paying close attention.

Annual General Meeting

BP’s annual meeting is scheduled for tomorrow, Wednesday 12 May, when there will be calls for the oil giant to redo its carbon emissions plan to make more significant reductions which more closely follow the Paris Climate Accord. While BP’s aim is to slash its production by 40% by 2030 in line with its net-zero target, along with increasing its renewable capacity, its emissions are expected to rise over the same period of time.

There is controversy heading into the meeting as prominent investor group, Calpers, decided to vote against BP’s climate resolution.

BP has previously said that its plan is in keeping with the goals of the Paris Climate Accord, saying it “consistent with the Paris goals” and was a drastic shift from the past. It added: “Going back to the drawing board on strategy, targets and aims would disrupt our business plans” as it rallied its shareholders to vote against the resolution.

While redrawing its plans could negatively impact its financial future, not going further put off investors who want to see a commitment to action in emissions. Whatever the outcome it will be interesting to see the response from investors.

Reduced Debt and Share Buybacks

In an effort to impress investors, BP stated its commitment to buying back shares this year as the company reduced its debt levels quicker than anticipated. The news came as BP announced earlier this month that it expects to reach its $35bn net debt target in Q1 of 2021.

The estimate is a result of earlier-than-expected proceeds from disposals and a “very strong quarter”, the oil company said last week. At the end of 2020, BP had a debt pile of $39bn. The company previously expected to reduce its debt to $35bn by as late as 2022.

“With the acceleration of divestment proceeds, together with strong business performance and the recovery in the price environment, we generated strong cash flow and delivered on our net debt target around a year early,” said Bernard Looney, chief executive.

Air Partner: A new orbit

Jon Levinson
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Air Partner: A new orbit

Air Partner (LSE: AIR)  82p Mkt Cap:  £52m
Today, Air Partners reported a record set of finals to January 2021. It is the only listed air charter broker and aviation safety & security consultancy and  benefited from Covid stimulated demand for its socially distanced Group Air Charter and extra for freight. 
Its gross profits increased by 31.3% to £44.9m and due to operational leverage the PBT increased 176.2% to £11.6m, which was also supported by cost cutting measures. Founded in 1961, Air Partner is a diversified global avi...

Ark Innovation ETF drops to lowest level since November

Liam Roche
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0
Ark Innovation ETF drops to lowest level since November

Ark’s major holdings have seen dramatic falls in recent weeks

The Ark Innovation ETF is down to its lowest level since November and has lost 16.5% of its value since the beginning of the year.

Since February, when the $21bn fund hit an all-time-high, the fund has fallen by 33%.

The company’s major holdings have seen dramatic falls in recent weeks, including Tesla, which is down by 6.44% today alone.

Cathie Wood’s flagship fund aims for a thematic multi-cap exposure to innovation across sectors, while seeking long-term growth of capital. This has made it vulnerable to a broader slide of high-valued growth stocks. As the Financial Times reported, this has come about as inflationary pressures have lessened the appeal of businesses which will see profits arrive in the future.

This was reflected by a decline in the Nasdaq composite which features many tech stocks last night.

“The sector rotation today is violent,” Ted Mortonson, a technology sector strategist at Baird, told the Financial Times.

“From a performance anxiety on the upside — a fear of missing out — this is now fear of getting killed.”

The fund also broke below its 200-day moving average, a long term moving average that helps determine the overall health of a stock.

“The issue with ARKK and other speculative growth ETFs is that short-term rallies have been aggressively faded for three months now,” Frank Cappelleri, Instinet executive director, told CNBC. “The ETF will have to do more than just bounce for a few days to convince traders otherwise.”

“In other words, simply getting back above the 200-day moving average won’t mean much without upside follow through. That continues to be the biggest concern,” Cappelleri added.

Morrisons records impressive online sales as lockdown eases

Liam Roche
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Morrisons records impressive online sales as lockdown eases

Increased speculation over takeover of Morrisons by Amazon

Morrisons (LON:MRW) announced on Tuesday that customers are flocking back to supermarkets as they have become accustomed to making food at home.

The supermarket confirmed its sales rose by 2.7% for the 14-week period to 9 May, as it enjoyed busy holiday periods including Mother’s Day and Easter.

As the UK approaches normality following lockdown, Morrisons pointed to growth in sales of its snacks and takeaway food.

“The pandemic is not yet over, but it is in retreat across Britain and there is much to be positive about as something approaching normal life begins to take shape,” said Morrisons boss David Potts.

“Our forecourts are getting busier, we are seeing encouraging recent signs of a strong rebound of food-to-go, take-away counters and salad bars, and our popular cafés will soon fully reopen.”

Shoppers are now more adept and open to buying their groceries online, the supermarket said, as its online sales more than doubled compared to the year before.

“Morrisons is now at the point where it needs to think about the next stage of its career, and we’ll find out its refreshed spending plans in September. This will almost certainly involve boosting capacity to fulfil online orders and seeing how it can further expand as a supply partner,” says AJ Bell investment director Russ Mould.

Amazon Partnership

Ross Hindle, analyst at Third Bridge, noted the FTSE 250 company’s partnership with Amazon and its implications for the future.

“To avoid being stuck in an increasingly squeezed middle, Morrisons’ continues to foster its relationship with Amazon, triggering much speculation about a full-blown acquisition by Amazon in the near future.”

“Amazon Fresh helped boost online sales by 113% for the quarter. The Group has also recently expanded its offering into the brick-and-mortar channel , with three Amazon Fresh stores having opened in London already and all stocked by Morrisons. With consumers now well accustomed to online grocery shopping, Amazon has growing expectations for its Fresh concept.  Our experts believe this partnership will prove a key differential growth factor for Morrisons.”

“Despite currently coming off a low base, the experts we are speaking to expect Morrisons to continue to develop its wholesale business and to increase its margin accretive non-food and clothing offer. Like the rest of the big four, Morrisons is having to look well beyond food to find some margin protection.”

FTSE 100 back below 7,000 in reversal of fortunes for mining sector

Liam Roche
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FTSE 100 back below 7,000 in reversal of fortunes for mining sector

After touching a fresh 14-month high on Monday, the FTSE 100 found itself below 7,000 as it fell by 2.16% during the morning session.

“This was accompanied-slash-prompted by a stark reversal from its previously buoyant mining sector,” said Connor Campbell, financial analyst at Spreadex.

A late collapse from the Nasdaq led to a nasty session for the Nikkei led to a really rough start for Europe on Tuesday.

“The tech slide not only gave the Nasdaq its worst day since March but prevented the Dow Jones from closing above 35,000 for the first time in its history,” said Campbell.

Ahead of Wednesday’s US CPI reading, it appears that investors’ inflationary fears have been reignited by surging commodity prices, something that will not be reflected in tomorrow’s figures, Campbell suggests. “It’ll be interesting to see how much the markets are reassured if Wednesday’s number does fall from 0.6% to 0.2% month-on-month as forecast,”he added.

The DAX’s decline was similarly severe, with a 1.7% drop knocking it back under 15,200 for the first time in 5 days. And the CAC found itself slipping below 6,280 as it tumbled 1.6%.

FTSE 100 Top Movers

At 0930 GMT on Tuesday, no companies listed on the FTSE 100 have made positive gains. Those which have fallen by the least are RSA Insurance (-0.044%), Pearson (-0.21%) and Just Eat (-0.28%).

While at the bottom, the biggest fallers of the day so far are Reinshaw (-6.22%), IAG (-5%) and Melrose Industries (-4.65%).

Natwest

The government is aiming to secure a buyer for shares in Natwest worth up to £1.1bn, amounting to 5%, as it continues its sell-off of the bank rescued over ten years ago.

580m shares in the FTSE 100 bank were being offered to institutional investors as part of a placing that would bring the government’s holding down to 54.8%. At early morning trading the Natwest share price is down, as the news emerged yesterday via Sky News.

UK Government to sell £1bn stake in Natwest

Liam Roche
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0
UK Government to sell £1bn stake in Natwest

The government is aiming to secure a buyer for shares in Natwest worth up to £1.1bn, amounting to 5%, as it continues its sell-off of the bank rescued over ten years ago.

580m shares in the FTSE 100 bank were being offered to institutional investors as part of a placing that would bring the government’s holding down to 54.8%.

At early morning trading the Natwest share price is down, as the news emerged yesterday via Sky News.

From the perspective of taxpayers, the deal comes at a loss of around £670m, with the shares nearly 40% below the value paid by the government for the bank then known as the Royal Bank of Scotland.

The government’s stake initially stood at 83%, however it has been gradually reduced over time. Most recently in March when the UK Treasury has announced it has finalised the sale of £1.1bn worth of shares back to Natwest.

Depending on the state of the market, the Treasury will seek to divest the remainder of its shares in the bank by March 2026, The Times reported.

City Pub Group set to capitalise on UK staycations this summer

Liam Roche
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City Pub Group set to capitalise on UK staycations this summer

City Pub Group revenue down by 57% as company posts results

The City Pub Group (LON:CPC), owner of nearly 50 pubs across the UK, confirmed on Tuesday that its revenues plummeted by more than 50% during 2019 as lockdowns battered the industry.

For the financial year gone, the City Pub Group brought in £25.8m, down from £60m in 2019.

City Pub took measures during the pandemic to offset its impact such as maximising outdoor seating for when the option presented itself. Across its locations, the City Pub Group has added more than 600 outside covers to allow them to open under the current government-imposed restrictions.

In addition, it acquired a 49% stake in the Kensington Park Hotel and increased its shareholding in Mosaic Pub and Dining group to 24%.

The AIM-listed company reported “encouraging trading” since outdoor reopening, with its 24 pubs currently open trading at 77% of 2019 levels, outlining the extent of the pent-up demand.

The group is expecting to benefit from an increase in domestic holidays as a number of international holiday destinations remain off-limits to Brits.

Clive Watson, Executive Chairman of The City Pub Group, added:

“The business has been significantly improved over the past year placing us in an excellent position to take advantage of the pent-up demand as the country reopens.”

“The early signs since we have been allowed to trade outdoors have been very heartening and it has been great to bring back our immensely talented staff and to see our customers enjoying our pubs once again.”

“We are a streamlined, well-invested business with a first-rate customer offer. Our pub estate is unique in terms of quality and, with the step change in the business, we have an ideal platform to grow successfully in the future.”

As its sites were quiet during lockdowns, the company made improvements to its City Club app which now has over 100,000 active members.

AIM reverse takeover: Insig AI

Andrew Hore
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0
AIM reverse takeover: Insig AI

Investors are used to fintech companies that lose money and eat up cash. Insig AI continues to make a profit although it has fallen because of the significant increase in product development spending on its asset management software. The cash raised in the placing will enable the completion of the products in development and boost sales and marketing. This includes tapping the US market.
AI software spending is expected to be $23bn in 2020 and reach $126bn in 2025, while the asset management part of the market could exceed $8bn by 2026.
Insig AI has a pipeline of potential clients and it will ...

Hotel Chocolat’s online surge

Andrew Hore
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0
Hotel Chocolat’s online surge

Sales are booming at Hotel Chocolat (LON:HOTC) with much better sales than at the same time in 2019 and the full year outcome will be significantly better than expected. The chocolatier has added one million customers to its database over the past 12 months.
Online and subscription sales are offsetting the loss of sales on the high street and this has led to a profit forecast upgrade.
The rating continues to be sky high on a short-term outlook, but it should come down rapidly.
Sales
Sales in the eight weeks to 25 April were nearly one-fifth higher than in same weeks in 2019. The figure was thr...

Ethereum surges past $4,000 mark while Musk says SpaceX will accept Dogecoin

Liam Roche
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2
Ethereum surges past $4,000 mark while Musk says SpaceX will accept Dogecoin

Ethereum market cap nears 50% of bitcoin’s

Ethereum soared past the $4,000 mark on Monday, reaching an all-time-high in a continuation of a massive recent bull-run.

Over the past month, Ether, the digital token of the Ethereum blockchain, is up by over 90%, bringing its market cap to $476.3bn, while bitcoin’s stands at $1.1trn.

“(Crypto has) got a lot more institutional involvement than people who haven’t followed the market believe,” Chris Weston, head of research at brokerage Pepperston, told Reuters.

“And everyone’s been in ethereum. It’s not a meme joke coin, it actually has some application use,” he added.

The recent surge in Ethereum, comes as bitcoin has move sideways, and is raising questions over its ability to usurp bitcoin as the most popular cryptocurrency.

According to a recent survey, 68% of people would be most likely to invest in the second largest cryptocurrency, behind bitcoin.

The survey also said that 18% of people would opt to invest in bitcoin, while 14% remain undecided. In addition, there are other indicators that Ethereum is becoming the most popular cryptocurrency in the eyes of investors.

Dogecoin

In other crypto news, the value of Dogecoin bounced back after Elon Musk suggested that SpaceX will accept payments in the cryptocurrency.

Laith Khalaf, financial analyst at AJ Bell, called into question Dogecoin’s underlying value after it plummeted during Musk’s appearance on Saturday Night Live.

“The SpaceX Dogecoin moon mission isn’t a giant leap for cryptocurrencies, because back here on planet Earth, crypto’s long term adoption by consumers, businesses and investors remains highly uncertain, to say the least. If an asset can drop 30% on the back of one individual’s appearance on Saturday Night Live, this tells you there’s not a huge amount of fundamental value holding up its price,” said Khalaf.

“While SpaceX might accept Dogecoin as payment, those Dogecoins will have been bought by people earning money in dollars, euros and pounds, and then converting it. Until cryptocurrencies are used for things as mundane as paying your mortgage or your phone bill, or indeed receiving your wages, as a medium of exchange they simply add an extra layer to transactions, and most don’t actually perform a useful function in the real economy.”

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