Big Oil Faces Off Against Clean-Energy Giants

A battle for clean-energy assets is brewing between green-minded oil giants and the utility companies that currently dominate the fast-growing business.

Last week, Portuguese utility EDP became the latest energy producer to raise its ambitions for renewable energy—it plans to double capacity by 2025. It joins an increasingly crowded field, consisting not just of other forward-thinking utilities but also the European oil and gas supermajors.

Among the latter, BP won two 1.5 gigawatt U.K. offshore wind leases in February by bidding almost double the amount fetched by similar-sized leases at the same sale. A handful of auctions around the world in the coming year will further test the new competitive dynamics—and perhaps highlight the risks. Future returns for investors will depend on companies paying sensible prices.

Oil and gas shares have fallen amid growing uncertainty about petroleum’s future profitability. Renewables are an obvious opportunity: Demand for clean power is expected

Read more

Continue Reading

Credit Suisse Suspends Funds Tied to SoftBank-Backed Greensill

Credit Suisse Group AG said it suspended a group of private investment funds tied to supply-chain finance assets created by SoftBank Group Corp. -backed specialty-finance company Greensill Capital.

The Swiss bank’s asset-management arm said it would stop allowing investors to buy into or sell out of the funds immediately. Credit Suisse manages four private investment funds that contain around $10 billion in securities created by Greensill.

The bank said a part of the funds is “currently subject to considerable uncertainties with respect to their accurate valuation.” The Wall Street Journal reported Sunday that the bank was concerned about Greensill’s exposure to a single client, U.K.-based steel magnate Sanjeev Gupta, according to people familiar with the matter.

Write to Julie Steinberg at [email protected] and Duncan Mavin at [email protected]

Source link Read more

Continue Reading

Jane Fraser Is Hitting Refresh at Citigroup

Jane Fraser

wants to simplify

Citigroup Inc.,


C -2.27%

the original megabank. That won’t be easy.

On Monday, Ms. Fraser takes over as chief executive of the third-biggest bank in the U.S. Once the industry’s problem child, the bank has stabilized and built up its defenses, proving sturdy and profitable even during the pandemic. Unlike her predecessors, she comes to the job at a time when Citigroup is relatively under the radar.

But Citigroup, which used to be the world’s largest financial-services firm, is struggling to keep up with rivals. While

Goldman Sachs Group Inc.

and Morgan Stanley are hitting new highs in market value, Citigroup’s is half of what it was in 2006. Its profit and revenue, once roughly double that of other big banks, have now been lapped by JPMorgan Chase & Co. and Bank of America Corp. And last fall, regulators ordered the overhaul of vast systems

Read more

Continue Reading

Stocks Cap Losing Week as Bond Yields Jump

Rising bond yields blunted U.S. stocks’ market momentum this week despite signs of an improving American economy.

On Friday, the Dow Jones Industrial Average fell 469.64 points, or 1.5%, to 30932.37, dropping 1.8% for the week. The S&P 500 fell 18.19 points, or 0.5%, to 3811.15, down 2.45% for the week.

The tech-heavy Nasdaq Composite, which has risen farther than its peers since last March and has been particularly driven by momentum traders, suffered a bigger loss this week. It fell 4.9% on the week, its worst percentage loss since the week ended Oct. 29. On Friday, it rose 72.91 points, or 0.6%, to 13192.35.

Government spending and the Federal Reserve’s aggressive monetary policy have supported the stock market during a tumultuous year. But those two sources of stimulus are now fueling inflation bets and sparking a bond selloff. When bond yields were at their lows, they offered investors

Read more

Continue Reading

As Yields Rise, Beware the Hidden Risks in Ultralong Bonds

Rising bond yields pose an outsize threat to one asset class in particular: ultra-long-dated debt.

Hopes of a fast economic recovery have given bonds their worst start to the year since 2015. Last October, 10-year Treasury yields were under 0.7%. Now, they hover around 1.5%. The jump has started to dent stocks: The S&P 500 fell 2.4% Thursday.

Markets still benefit from very loose financial conditions in inflation-adjusted terms, and the Federal Reserve made clear this week it won’t allow yields to go too high. That offers protection to stock investors, and even most bondholders.

The exceptions may be investors that bought debt issues maturing in 50 or more years’ time, particularly those with slim coupons.

So far, the big yield shifts are happening at shorter maturities. Yet France’s new 50-year government bond, issued on Jan. 26, has still lost 15% of its value. Over the same period, Austria’s

Read more

Continue Reading

Load More