7.28 0.00 (0.00%)
After hours: 4:45PM EST
|Bid||7.01 x 27000|
|Ask||7.28 x 21500|
|Day's range||7.25 - 7.34|
|52-week range||4.49 - 7.34|
|Beta (5Y monthly)||1.03|
|PE ratio (TTM)||6.85|
|Forward dividend & yield||0.37 (5.14%)|
|Ex-dividend date||28 Sep 2020|
|1y target est||8.76|
(Bloomberg) -- Empresa Electrica Guacolda SA’s bonds jumped the most in more than a month after Grupo WEG said it will honor commitments previously made to creditors after it acquires AES Gener’s stake in the coal-fired power producer.Guacolda’s $500 million of notes due in 2025 rose 3.4 cents on the dollar Friday to 80 cents, according to Trace trading data. Yields fell to 10.7%, a drop of about 200 basis points from highs hit this week.WEG, a Santiago-based investment firm, signed a contract on Feb. 23 to buy the 50% stake from co-owner AES Gener, a Chilean energy giant that is selling as part of its plan to cut carbon emissions. Guacolda operates coal-burning power plants in the Atacama region in northern Chile.The price of the company’s bonds had slumped amid concerns that the deal, which requires regulatory approval, would leave bondholders without assurances that WEG would honor certain financial commitments.Read more: Chile coal plant debt falls to distressed on AES stake sale However, in an email response to questions Friday, WEG said it will comply with previously signed commitments “including those relating to the bond issued at the time in the North American market.”Once the sale is completed, WEG said it will also sign on to the Chilean government’s national de-carbonization agreement and work to develop the plant as the country goes through an energy transition process.“These Guacolda bonds were structured as stand-alone with minimal restrictions on dividends, so that means that yes, the intentions of the new shareholders are what matters,” said Roger Horn, a senior strategist at SMBC Nikko Securities America in New York.(Adds strategist comment in last paragraph, updates pricing in second paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Masayoshi Son has come to dominate Silicon Valley. Now his company is increasingly dominating Japan’s markets, with SoftBank Group Corp. rising to become the largest-weighted stock on the country’s Topix index.SoftBank pulled ahead of Toyota Motor Corp. in pole position on the benchmark gauge last week, and sat as the highest weighting, albeit by a fraction, as of market close on Wednesday. That’s ended an almost 13-year streak for the automaker as the largest stock on the index, according to data compiled by Bloomberg.The change is further evidence of SoftBank’s own winning run. While Toyota trades little changed in 2021, SoftBank stock is up over 30%, rallying past a two-decade record to a new high, backed by a surging stock market which has lifted the value of its portfolio companies.Masayoshi Son Just Pushed SoftBank Shares Past Dot-Com PeakToyota, meanwhile, has been impacted by production outages due to earthquakes in Japan and freezing temperatures in the U.S., concerns over the global semiconductor shortage, and fears it’s losing out in the red-hot electric vehicle market.“It’s good news for the Japanese equity market, which has traditionally been dominated by manufacturers that have very low valuation,” said Mitsushige Akino, a senior executive officer at Ichiyoshi Asset Management Co. “If Toyota continued to remain the top weight, then there’s limit to how high the index can go. It’s a historic turning point.”Shares of SoftBank rose 2.1% on Wednesday, beating a 0.5% gain in the Topix gauge and a 0.6% advance in Toyota’s stock.Changing TimesAnother reason for SoftBank’s dominance is the makeup of the Topix. The index is weighted by market value, where Toyota still dominates. But that value is adjusted by a “free-float weight ratio,” based on the number of shares actually available to be traded in the market. The opaque measurement ignores stock that’s locked up by major shareholders, treasury stock or cross-shareholdings held by units or firms with business dealings.A recent review in January trimmed Toyota’s ratio to 50% from more than 55%, with Keiichi Ito, chief quants analyst at SMBC Nikko Securities Inc., noting that Toyota is impacted by its vast series of cross-shareholdings. SoftBank has a ratio of 60%.SoftBank’s dominance in Japan’s markets is becoming more pronounced. It’s the second-largest weighting on the Nikkei 225 Stock Average after Fast Retailing Co., as well as the second most valuable company in the country by market value.“Changing times demand different companies,” said Ito.With Toyota having lost its crown as the world’s most valuable automaker to Tesla Inc. last summer, it may soon discover that SoftBank also outranks it in Japan too. While SoftBank’s market value trails Toyota’s 25.9 trillion yen valuation by around 4 trillion yen, that gap has narrowed by more than two-thirds in the past year.(Adds Akino’s comment in the fifth paragraph, updates prices throughout.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- Central banks from Asia to Europe escalated their efforts to calm panicking markets, pledging to buy more bonds and signaling more policy accommodation, after U.S. Treasury yields surged to the highest level in a year.The Reserve Bank of Australia waded in with more than $2 billion of unscheduled purchases, while Korea announced buying plans for the next few months. European Central Bank Executive Board member Isabel Schnabel said more stimulus could be added if the surge in yields hurts growth.While the response appeared to calm bond investors, it’s unlikely to bridge a deepening divide between traders and central banks over the pace of the economic recovery. Officials fear the so-called reflation trade, already rippling through all markets, could seep into economies that have yet to rebound from the coronavirus shock.”Do central bankers come out and effectively put their foot down? We obviously saw some big buying in Australia out of sync with their normal program. That hasn’t helped dramatically,” Iain Stealey, international chief investment officer of global fixed income at JPMorgan Asset Management told Bloomberg Television.The ECB, for example, has “more ammo, but as we know, the talk is fairly empty,” he said.In the Asia-Pacific region, the RBA is taking the lead in acting as a breakwater for rising yields, a role typically played by the Bank of Japan. Its offer to buy A$3 billion ($2.4 billion) of debt acted to brake the selloff, with Australia’s three-year bond yield erasing gains. Treasury yields also came down from the 1.61% highs reached Thursday night as Asian investors piled in.While the BOJ hasn’t acted, Finance Minister Taro Aso fired a warning shot as the benchmark yield surged to within a couple of basis points of the perceived top of the central bank’s target zone. “It’s important that yields don’t suddenly jump up and down,” said Aso in Tokyo. “We need to make sure not to lose the market’s trust with fiscal management.”Governor Haruhiko Kuroda later said the BOJ won’t change its yield target, and wants to keep the nation’s yield curve low.Read: BOJ’s Tolerance for Rising Yields Tested Before Policy ReviewIn Europe, German bonds rallied on Friday, with the yield on 30-year debt falling three basis points to 0.21%. Italian benchmark debt also reversed a slide at the open to trade higher, with the 10-year yield down one basis point at 0.79%.The move coincided with ECB officials escalating their rhetoric against excessive market optimism about the state of the euro area economy.“A rise in real long-term rates at the early stages of the recovery, even if reflecting improved growth prospects, may withdraw vital policy support too early and too abruptly given the still fragile state of the economy,” said Schnabel, who is responsible for the ECB’s market operations. “Policy will then have to step up its level of support.”There are expectations that global central banks will try to contain a further rise in yields, said Kei Yamazaki, a senior fund manager in Tokyo at Sumitomo Mitsui DS Asset Management. “Fed officials have been tolerating the recent rise in yields, but the current risk-averse market will also prompt them to calm the market verbally.”Read More: In a Flash, U.S. Yields Hit 1.6%, Wreaking Havoc Across MarketsWhile markets are increasingly pricing in higher inflation and the potential for rate hikes, every major central bank from the Federal Reserve to the ECB see a prolonged period of easing as economies gradually recover. That would suggest this week’s tussle is set to continue.“Selling begets more selling,” said John Pearce, chief investment officer of UniSuper Management Pty. in Sydney. “In the short-term it doesn’t look like it’s stopping.”(Updates with analyst’s comment in fourth, fifth paragraphs.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.