Shell (SHEL), HSBC (HSBA), BP (BP.), Imperial Brands (IMB) and Ultimate Products (ULTP)
Energy giant Shell (SHEL) could move its primary listing to New York next year if its valuation gap against its North American competitors does not narrow, the company’s chief executive has said. Wael Sawan said the company was pushing to catch up to Exxon Mobil (US:XOM) and Chevron (CVX), but investors were just not buying it.
“If we work through the sprint, and we are doing what we are doing, and we still don't see that the gap is closing, we have to look at all options,” he was quoted as saying in a Bloomberg opinion piece. Shell’s forward price to earnings ratio is 9 times, while Exxon is at 13 times and Chevron 12 times. The US giants and BP (BP.) sit on a higher operating margin of 13 per cent, while Shell’s margin is just under 8 per cent, although Sawan argued his company’s free cash flow yield of 12 per cent showed his company’s undervaluation. AH
Read more: Is the US market all it's cracked up to be?
HSBC sells Argentinian business for $550m
HSBC (HSBA) has agreed to sell its Argentinian banking unit to Grupo Financiero Galicia, the country’s largest private banking company, for $550mn (£433mn). The sale means the bank will take a $1bn loss in its first quarter earnings, as well as $4.9bn of historical cumulative foreign currency translation reserve losses.
Chief executive Noel Quinn said, “This transaction is another important step in the execution of our strategy and enables us to focus our resources on higher value opportunities across our international network. HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network.”
The sale will have no impact on the group’s core tier 1 capital and HSBC still expects a return of tangible equity in the mid-teens for 2024. JH
Read more: HSBC's buyback and dividend fail to lift the mood
Imperial Brands sticks with guidance on higher prices
Cigarette giant Imperial Brands (IMB) pointed to “strong tobacco pricing” and next-generation product (NGP) net revenue growth in the mid-to-high-teens on a constant currency basis as it grew adjusted operating profits in the first half and maintained full year guidance. In an update ahead of its interim results next month, the company said it had made tobacco market share gains in the US, Spain and Australia but lost ground in Germany and the UK. The board expects tobacco and NGP net revenue growth at a low single-digit rate this financial year, with operating profits forecast to rise at a rate in the mid-single digits. CA
