Norne Daily

Key Takeaways

Markets

  • Asian stocks dropped in the wake of another plunge on Wall Street as the prospect of higher interest rates and turmoil in Europe stoked fears of global recession
  • Nikkei Index -2.2%; Shanghai Index -0.2%; Hang Seng Index -0.1%
    • The Bank of Japan boosted its planned bond purchases at a regular operation on Friday as it sought to cap upward pressure on yields, while Prime Minister Fumio Kishida instructed his government to come up with an economic stimulus package by the end of October
    • The offshore yuan weakened and was at risk of further depreciation next week
    • China’s central government shifted to allow some cities to lower their mortgage rates for first home purchases
  • S&P 500 Index -2.1%; Nasdaq Index -2.8% yesterday
    • St. Louis Fed President James Bullard said investors have now understood that they can’t escape additional rate hikes in coming months
    • Nike’s shares dropped in after-hours trading as the company described problems with overstocked inventory levels and the aggressive steps it’s taking to lower them

 

Commodities

  • Brent for November is down USD 0.5/b at USD 87.9/b this morning after decreasing by USD 0.8/b the last trading day
  • Oil fell with sinking equities following fresh signals of economic tightening ahead
  • OPEC and its allies have started talks about lowering oil output at their meeting next week (Oct. 5), although the size of any supply reduction is still under consideration, according to delegates
  • UK nat. gas price dropped by 20% the last trading day

 

  • Key notes from the latest weekly Profercy reports on the urea/ammonia markets:
    • Ahead of the Crossroads conference in Singapore, the market is in a neutral gear. Demand has been slow, but suppliers have not been chasing liquidity.
    • Responding to the slow pace of business, the Nola market has declined. Exports continue, albeit at a slower pace.
    • Much to the frustration of North African and African producers, Europe appears calm. As a result, the high fob premium in North Africa over other origins is waning. There has been no major change to the European supply situation and gas prices are incredibly high.
    • While Brazil is still expected to step up, and Europe likely to return, the main global talking point is already when further Indian import demand will emerge. The limited volume booked earlier and the sizeable requirement for shipment by the end of the year suggests any major delay is unlikely.
    • For the moment, there is no major concern at the producer level, although those in North Africa/Africa, SE Asia and, to a lesser extent the Middle East, do still hold October inventory.
  • For ammonia market:
    • Yara and Mosaic agreed a $25pt month-on-month hike in the US benchmark, with that small raise appearing to catch some participants off-guard. Said players had expected a larger increase given the continued volatility in European gas prices and widespread capacity curtailments that have created strong import demand. In the absence of new business, prices are assessed as stable in nearly all cases

Company & Sector News

  • Nike 1Q23 results:
    • Revenues USD 12.7bn (USD 12.3bn consensus)
    • EPS USD 0.94 (USD 0.92 consensus)
    • Gross margin decreased 220 basis points to 44.3 percent, primarily driven by higher shipping and logistics costs
    • Inventories for Nike were USD 9.7bn, up 44% YoY
    • Nike shares fell 3.4 percent in regular trading, and fell 9.4 percent in aftermarket trading on Monday
  • Astrocast 1H22 results:
    • EBITDA CHF -9.1m (CHF -5.4m 1H21)
    • In the fourth quarter, the company aims to deliver and station eight additional nanosatellites, and at the same time prepare the company to produce 20 nanosatellites for launch in 2023
  • Equinor appoints Torgrim Reitan as new CFO
    • Reitan succeeds Ulrica Fearn, who has decided to leave the company to become CFO of a company outside Equinor
    • Reitan started at Equinor in 1995. From 2018-2020, Reitan was executive vice president for Development and production international
  • Kitron has entered into a production agreement with Ferroamp, a rapidly growing Swedish greentech company
    • The value of the agreement is expected to reach approximately NOK 90m in 2023 and NOK 350m over a three-year period
    • The production for Ferroamp will take place at Kitron’s facility in Poland and is expected to start within a few weeks

Norne Daily embedded slides

Norne-Daily-30.09.2022