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By Swissquote Analysts
Published on 16.11.2021
Morning news

Shell to Move Headquarters to London Amid Energy Transition

Topic of the day

Royal Dutch Shell PLC (+1.9% in London) plans to consolidate its dual British and Dutch structure and relocate its headquarters to London, a move it said would help facilitate returns to shareholders and make it simpler to change up its portfolio of assets. The oil giant said Monday that bringing an end to its complex structure should also make it easier for investors to value the company, at the same time it has committed to transitioning to low-carbon energy. Shell’s shares in London traded 1.9% higher after the announcement. The plan announced Monday is the first major change to Shell’s structure since the 2005 unification of its two legacy companies under a single parent company. Since then, Shell has had two lines of shares, an A and a B share, a structure that it said Monday was never intended to be permanent. The shares have the same voting rights and are treated equally, but one line of shares allows some shareholders outside the Netherlands to avoid paying a Dutch dividend tax. Dutch government officials are in last-minute talks to try to find a way to encourage Shell to keep its head office in the Netherlands, a person familiar with the matter said. Shell’s proposed restructuring follows a similar move from Unilever PLC in recent years.

Swiss stocks

On Monday, the SMI gained 1 point to 12,517 points. Among the 20 SMI stocks there were eleven price losers and seven winners, two shares closed unchanged. 22.75 (previously: 28.41) million shares were traded. Richemont shares rose by 2.8 percent. After the strong business figures on Friday, analysts increased their price targets, such as Deutsche Bank, UBS, Morgan Stanley and Vontobel. Vontobel concludes that Richemont's watch and jewelry business is booming. The watch and jewelry divisions had achieved growth of 28 percent in the first nine months compared with 2019. That contrasts with just 4 percent for competitor LVMH, Vontobel stated. The share of rival Swatch, however, reduced slightly. Second-strongest value after Richemont in the SMI were Alcon (+1.4%). Sonova slipped by 5.8 percent. The hearing aid specialist had presented strong business figures, but had not raised the outlook. Pressure on the overall market stemmed from the heavyweight Novartis shares, which fell 0.5 percent. The other heavyweights Nestle and Roche trended little changed. But also the cyclicals were sold, so ABB lost 0.2 percent, Geberit 1.3 percent and Holcim 0.4 percent.

International markets


European stocks rose Monday as investors shrugged off concerns around inflation and bond yields slipped back slightly. The Stoxx Europe 600 index gained 0.3%, setting a new closing high of 488.1 points. In Paris, the CAC 40 rose above 7,100 points for the first time, gaining 0.5% to a new high of 7,128.6 points. The SBF 120 also gained 0.5%. In Frankfurt, the DAX 40 advanced 0.3%, while the FTSE 100 in London gained 0.05%. BNP Paribas (+3.3%), which is seeking to withdraw from the retail banking market in the United States, is studying a possible sale of Bank of the West, Reuters reported Monday, citing sources close to the case. A deal could value the U.S. bank at up to $15 billion, or 13.1 billion euros, the news agency said. Contacted by the Agefi-Dow Jones agency, BNP Paribas, as well as Goldman Sachs and JPMorgan, cited by Reuters as advisory banks, did not comment. Rémy Cointreau gained 2.7% after Barclays raised its recommendation on the stock to "overweight" from "neutral" and its price target to 234 euros from 175 euros. Airbus lifted off 1.7% in Paris, after the aircraft manufacturing giant received a multibillion-dollar order for passenger jets from U.S. private equity group Indigo Partners, which holds stakes in Wizz Air and other low-cost airlines. Philips shares fell 10.4% in Amsterdam after the U.S. Food and Drug Administration (FDA) inspected a facility of the Dutch group in the United States, following a recall of respiratory assistance devices. Shares of Spanish bank Banco Bilbao Vizcaya Argentaria fell more than 4.5% in Madrid after it said it would launch a takeover bid for financial-services company Turkiye Garanti Bankasi for the equivalent of around $2.6 billion. The move runs contrary to what many investors had expected, given uncertainty over Turkey's outlook amid rising inflation and a weakening currency. Cineworld surged 6.5% in London, after the movie-theater chain said revenue had topped prepandemic levels in the U.K. and Ireland, where a recovery has been driven by movies including the latest James Bond installment, No Time to Die. Koninklijke Philips tumbled 11.4% in Amsterdam, after the U.S. Food and Drug Administration requested additional testing of materials used in recalled Philips ventilators.

United States

U.S. stocks slipped slightly to start the week, with investors parsing how companies might withstand inflation pressures. The Dow Jones Industrial Average finished down 12.86 points, or less than 0.1%, to 36087.45. The tech-focused Nasdaq Composite Index edged down 7.11 points, or less than 0.1%, to 15853.85. The S&P 500 slipped 0.05 point, virtually unchanged, to 4682.80. Dollar Tree added $16.15, or 14%, to $129.23 after The Wall Street Journal reported Friday that activist investor Mantle Ridge has a stake of at least $1.8 billion in the discount retailer and plans to push it to act to boost its share price. CyrusOne shares rose $4, or 4.7%, to $89.45 after the data-center operator said it is selling itself to investment company KKR & Co. and Global Infrastructure Partners LLC in an all-cash transaction. Boeing shares added $12.13, or 5.5%, to $233.09 after the company said over the weekend that it had received new orders for its converted freighters. Casper Sleep shares soared $3.14, to 88%, to $6.69. The company said Monday it had agreed to a takeover from investment group Durational Capital Management. Tyson Foods Inc. reported a jump in sales after sharply raising prices for its beef, chicken and pork, citing growing costs the company said were likely to persist. Shares rose $2.88, or about 3.5%, to $84.11.


In Asia, major indexes closed mixed. South Korea’s Kospi lost 0.1%, Hong Kong’s Hang Seng added 1.3% and Japan’s Nikkei 225 finished virtually unchanged at 29,783 points. China’s Shanghai Composite added 0.3%. In Seoul, market participants report slight profit-taking after the solid gains of the previous two trading days. Daewoo Shipbuilding & Marine Engineering and Celltrion, for example, are both down around 2 percent. Celltrion had recently made significant gains, supported by the approval of its Covid-19 antibody by the EU Commission.


In bond markets, the yield on the benchmark 10-year U.S. Treasury note moved higher for the third trading day to 1.621%, up from 1.566% Friday night.


UBS raises Lufthansa to Neutral (Sell)/Target EUR 7.05 - Trader
Citi increases target Delivery Hero to EUR 183 (167) - Buy
Citi lowers Knorr-Bremse target to EUR 98 (101) - Neutral

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