Research Market strategy
By Swissquote Analysts
Published on 29.11.2022
Morning news

Shell to Buy Biogas Producer in $2 Billion Deal

Topic of the day

Shell PLC (-0.27%) has agreed to buy a European producer of biogas for nearly $2 billion, the latest move by a major oil and gas company to push into renewable fuels. The London-based company said Monday it would buy Denmark's Nature Energy Biogas A/S, which produces a renewable fuel called biomethane that can replace conventional natural gas in heavy road and marine transport, industry and heating. Nature Energy is Europe's biggest producer of biomethane from organic waste. The deal emerges as some of the world's largest oil-and-gas companies look to tap into rising demand for renewable natural gas as their customers try to cut greenhouse-gas emissions. Shell and British rival BP PLC are shifting more resources into lower-carbon energy to meet long-term decarbonization targets, even as they continue to make most of their money producing and trading oil and gas. Shell's acquisition comes just six weeks after BP said it agreed to buy U.S. biogas producer Archaea Energy Inc. for $3.3 billion plus debt, for a total of $4.1 billion. And Chevron Corp. earlier this year agreed to pay $3.15 billion for Iowa-based Renewable Energy Group in one of its biggest clean-fuel investments. Biogas can be captured from decomposing landfill and farm waste and made into alternative fuel for heavy trucks and power plants. The decomposition process releases methane, a harmful greenhouse gas. The goal is to cut emissions by processing the biogas into usable, transportable fuel.

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Swiss stocks

The Swiss stock exchange held up better than its European neighbours at the start of the week. Because the leading SMI index in Zurich is very heavily weighted with Roche, Novartis and Nestle, shares that are less sensitive to the economy, the decline in the SMI was only very moderate. It lost 0.1 per cent to 11,162 points. Among the 20 SMI stocks, there were 12 price losers and 8 price winners. 68.6 (Friday: 60.5) million shares were traded. Roche, Nestle and Novartis all closed with small gains of up to 0.4 per cent, while Swisscom, another stock considered defensive, rose by 0.6 per cent. Richemont (+2.2 per cent) and Swatch (+1.1 per cent) were somewhat surprisingly at the top of the second tier, also outperforming the broad market. Both shares are generally considered to be very sensitive to negative news from China, a very important demand country for the companies. Bringing up the rear in the SMI was clearly Credit Suisse, which actually accelerated Friday's slide with a drop of 9.3 per cent. In order to end an ongoing investigation by the US Federal Reserve into Credit Suisse Bank's involvement in the collapse of the asset management company Archegos Capital Management, the bank is prepared to pay penalties and make corrections in its operating business. Credit Suisse suffered more than $5 billion in losses from Archegos, the worst hit among a number of financial institutions.

International markets


European stocks fell to start a new trading week as protests in China over the country's zero-tolerance approach to Covid-19 weighed on investor sentiment. The DAX fell by 1.1 per cent to 14,383 points, the Euro-Stoxx-50 by 0.7 per cent to 3,936 points. Only the Stoxx indices of pharmaceutical stocks as well as food and beverage stocks, which are not dependent on the economy, held up well. Oil shares, reliant on the Chinese economy, and basic resources were under heavy pressure. Brenntag was in focus due to merger talks with US rival Univar Solutions. Airbus fell 5.7 per cent to 107.36 euros. Press reports indicated that scheduled deliveries of medium-haul jets in 2023 could be delayed. The fall below the 112 mark also triggered pressure, as many stop-loss marks had been placed there after the rally since the beginning of October. Casino was down 0.4 per cent in Paris. The French retailer intends to sell parts of its Brazil business to accelerate its debt reduction. Casino initially plans to divest 10.4 per cent of its stake in Assai. "That should bring in at least half a billion dollars," one trader estimated the proceeds for Casino. After a buy recommendation by UBS, Fresenius gained 0.5 per cent. Symrise fell 0.7 per cent following a downgrade by Goldman Sachs.

United States

U.S. stocks pulled back Monday, pushed down by widespread protests across China and hawkish comments from Federal Reserve officials about the path of interest-rate increases. The S&P 500 fell 62.18 points, or 1.5%, to 3963.94. The Dow Jones Industrial Average lost 497.57 points, or 1.4%, at 33849.46. The Nasdaq Composite declined 176.86 points, or 1.6%, to 11049.50. Stocks opened in the red, but the selloff accelerated in the afternoon after comments from Fed officials indicating interest rates could be higher for longer as inflationary pressure persists. New York Fed President John Williams on Monday said “there is still more work to do” to bring down prices. St. Louis Fed President James Bullard also discussed elevated rates moving forward. Energy companies fell along with oil prices. Every component in the S&P 500 energy sector closed Monday lower. Diamondback Energy dropped $5.59 a share, or 3.7%, to $143.73. Occidental Petroleum and Exxon Mobil also declined. Apple could see a production shortfall of close to 6 million iPhone Pro units this year due to the unrest at the Chinese factory in Zhengzhou where most of the world’s latest iPhone models are assembled, Bloomberg News reported. Apple shares declined $3.89 a share, or 2.6%, to $144.22. Walt Disney (-3.2%) will prioritise the creativity of its productions and the profitability of its streaming service over subscriber growth, Robert Iger said on Monday at a conference to mark his return as head of the US entertainment giant. Taboola shares jumped 44 percent after the online advertising specialist announced an exclusive 30-year commercial agreement with internet company Yahoo. Activision gained 1.7% to $74.83 after being hit last week by reports that the Federal Trade Commission (FTC) was preparing to take legal action to block Microsoft's takeover of the games publisher (-0.8%). Cigarette maker Philip Morris (-1.2%) announced that it held 93.11% of Swedish Match's share capital following its takeover bid and that it would apply to delist the Swedish company.


Asian stocks were mixed on Tuesday. China’s benchmark Shanghai Composite edged up 2.3 per cent while Hong Kong’s Hang Seng adds 4.3 per cent. In any case, additional aid for the ailing real estate sector is well received in China. Longfor Group Holdings jumped 10 per cent, Country Garden Holdings 9.9 per cent and Country Garden Services 9.5 per cent. Meanwhile, the Nikkei-225 loses 0.4 per cent to 28,039 points. In South Korea, the Kospi gained 0.9 per cent. Asiana Airlines jumps 19 per cent, Korean Air Lines 3.7 per cent. The British regulatory authorities are likely to allow the merger of the two companies.


Long-dated U.S. government debt yields were mostly steady on Monday, amid unrest in China, which sparked some worries about prospects for the global economy. The 10-year Treasury note was yielding 3.67%, down 2 basis points. The 2-year Treasury note lost 3 basis points to 4.448%.


UBS reduces Medacta to Neutral (Buy) - Target CHF 108 (115)
Goldman Sachs cuts Clariant target to CHF 20.20 (20.70)/Buy - Trader
Dt. Bank raises target Softwareone to CHF 14 (12) - Hold

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