The latest Market Talks covering ESG Impact Investing. Published exclusively on Dow Jones Newswires at 10:00 ET and 17:00 ET.
0716 ET - The amendment to EU carbon dioxide rules will offer only a small relief to European automakers, UBS analyst Patrick Hummel writes. The EU Commission has announced that CO2 targets for 2025-27 will be combined into one assessment period instead of assessing compliance each year, allowing carmakers to compensate for potential underachievement in 2025 with overachievement in following years. However, manufacturers will still have to sell more EVs this year, because a sit-back-and-relax strategy could be risky and costly in the coming years. Therefore, EV price competition will probably remain intense. "Volkswagen and Renault so far have been most behind their CO2 goals, and therefore the amendment to the rules is good news for them." (dominic.chopping@wsj.com)
0620 ET - The EU's altered rules on carbon dioxide emission compliance are a big win for automakers, but knock-on effects of higher defense spending are likely to be less helpful, Citi analysts Harald C Hendrikse and Soumava Banerjee write. The EU has announced that manufacturers will get a three-year window for EU CO2 emission compliance. At the very least, large financial penalties will be at least deferred until full-year 2028, Citi says. Further, this means auto manufacturers can properly maximize EBIT in 2025, providing around 5% upside for the most-exposed names. "On the other hand, in a world where EU defense spending has to rise by hundreds of billions of euros, how long before we get higher (consumer) taxes and higher EU rates?" (dominic.chopping@wsj.com)
2133 ET - City Developments' issues regarding board independence and corporate governance have cast a shadow on its medium-term outlook and potential next steps, says RHB Singapore's Vijay Natarajan. The brokerage downgrades the stock's rating to neutral from buy and trims its target price to S$4.75 from S$7.30. The property developer's share price has underperformed in the past few years amid weak return on equity and an asset-heavy strategy, which resulted in high interest costs, the analyst writes in a note. However, he thinks a major shake-up could unlock value, citing catalysts including a complete revamp of the board and strategy with additional safeguards in place. Shares are 0.6% lower at S$4.97.(amanda.lee@wsj.com)
(END) Dow Jones Newswires
March 04, 2025 10:00 ET (15:00 GMT)
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