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Euronext rebrands ESG to aid European defense firms
Euronext, the European exchange operator, announced on Tuesday a number of measures designed to encourage investment in the defence industry. These include helping companies list their shares on stock markets or launch new bonds more quickly. The move comes after a push by the Trump administration to reduce the reliance on U.S. weapons and increase investment in the sector. Stephane Boujnah, CEO and Chairman of Euronext, said that the company was responding to "a new geopolitical system" by renaming ESG, which is an acronym for Environmental, Social and Government-driven investments, as Energy, Security and Geostrategy. Euronext released a statement saying that "European aerospace companies and defence firms have expressed an urgent need to heavily invest in their innovation, production and capacity to guarantee Europe's autonomy strategic for the next decade." Euronext announced that it would review the ESG indexes' methodologies to reduce the current exclusions of defence companies. According to the company, in line with its regulatory guidelines, "Euronext encourages ESG rating agencies" to limit their concept of controversial weapons to only those activities that are prohibited by relevant international agreements. The exchange reiterated its plans to launch a new set of indexes focusing on energy, geostrategy and security, which were unveiled in march. Indexes can be used to measure the performance of different market segments. Indexes can be used to create funds. ANALYSTS ARE SCEPTICAL Euronext announced that it will also support initial public offerings in the sector via its new IPOready Defence program, which is set to launch in the third quarter and receive funding from the European Union. Thyssenkrupp is currently in the process to spin off and separately list its warship division TKMS. It said that it would analyze the potential impact of the initiative. The report stated that "the geopolitical environment requires decisive actions to strengthen military readiness in Germany and Europe." There were very few details about the steps that would be taken to encourage more companies to go public, and some analysts were skeptical. Reg Watson, an ING analyst, said that while promoting defence IPOs was helpful, at the end of day the market is what determines whether IPOs are successful or not. Boujnah, during a conference call with journalists, said that Euronext can now reduce the time required to list European defense bonds to only two days. The announcements made on Tuesday are part of a larger geopolitical shift, as Europe tries to increase its military spending following the statement by U.S. president Donald Trump that Europe must be more responsible for its security. In March, Ursula von der Leyen, President of the European Commission, said that the EU can mobilize up 800 billion Euros ($906 billions) to boost its defence industry. European asset managers are reassessing the policies they have on defence investments as politicians and clients pressure them to relax restrictions and fund the race to arm. Euronext operates exchanges at Amsterdam, Brussels Dublin, Lisbon, Milano, Oslo, and Paris.
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Constellation Energy's first-quarter earnings misses estimates due to rising costs
Constellation Energy, the largest U.S. energy company, missed Wall Street's expectations on first-quarter profits. The major U.S. utility was hit by rising costs for building and operating its electricity infrastructure. Interest rates that are higher for longer can increase the cost of utilities and make it more costly to invest in electrical grid infrastructure. The net income of the company fell by around 87% compared to a year ago, and was $118 million for the quarter reported. Constellation Energy reported that interest expenses increased by nearly 15% compared to a year ago, to $146 millions in the quarter January-March. Total operating expenses increased by 18.5% to reach $6.34 billion. Company executives say that inflation is driving costs up. Constellation CEO Joseph Dominguez stated on a earnings call that "it's obvious that we're playing a new game in terms of cost." Dominguez stated that certain natural gas plant constructions, for instance, had tripled their cost in some cases over the past decade. Constellation Energy said it expects the U.S. Tariff to have a 1-2% impact on its capex plan for 2025-2026. This includes fuel. Constellation continued to move forward with its power deals for data centers. This included the reopening the former Three Mile Island Nuclear Reactor and the $16.4 billion purchase of Calpine, a privately owned natural gas and geothermal energy company. Constellation shares recovered in early trading, rising by about 6% after a drop of nearly 5% during premarket trade. Constellation executives stated that the company is on track to complete the deal by the end the year, despite the fact that the Calpine acquisition has been met with opposition from consumer groups based in the Mid-Atlantic region. Last month, it defended the planned acquisition of Calpine before regulators. According to data compiled and analyzed by LSEG, the Baltimore-based utility posted a profit adjusted of $2.14 for the three-month period ended March 31. This was below analysts' expectations of $2.22. Reporting by Katha and Sumit in Bengaluru; Laila Kearney, in New York. Editing by Krishna Chandra Eluri.
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WEC Energy reports higher first-quarter profits on strong demand for power
WEC Energy announced a 16.4% increase in its first-quarter profits on Tuesday, thanks to increased electricity consumption from residential, commercial and industrial customers. According to the U.S. Energy Information Administration, power consumption will reach new highs by 2025 and 26. This is due to AI, data centers, and residential and commercial consumers. WEC Energy’s natural gas deliveries to Wisconsin, excluding the natgas for power generation, increased by 15.5% during the first quarter. We Power and Wisconsin Public Service are the company's natural gas units. WEC Energy reported that residential power consumption increased by 5.5%, and retail sales rose by almost 3%. LSEG data shows that the company's operating revenue for the first quarter rose by 17.5%, to $3.15 Billion, compared to analysts' expectations of $2.82 Billion. WEC Energy's operating costs increased 18.5%, to $2.21 Billion. Interest expenses rose 16.1%. The company that provides electricity and natural gas to almost 4.7 million customers across Wisconsin, Illinois Michigan and Minnesota has reaffirmed their annual profit forecast. WEC Energy, based in Milwaukee, increased its net income to $724.2 millions, or $2.27 a share, during the first quarter of this year, up from $622.3, or $1.97 a share, one year ago. (Reporting and editing by Shounak dasgupta in Bengaluru)
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Constellation Energy's operating costs increase causes Constellation Energy to miss its first-quarter profit estimate
Constellation Energy, a U.S. utility, missed Wall Street's expectations for the first quarter profit on Tuesday. Higher operating and interest costs pushed its shares lower by nearly 5% during premarket trading. The net income of the company fell by around 87% compared to a year ago, and was $118 million for the quarter reported. The higher interest rates for longer can be a burden on utilities, as they make it more expensive to invest in critical infrastructure like electrical grids. Constellation Energy reported that interest expenses increased nearly 15% compared to a year ago, to $146 millions in the quarter January-March. Total operating expenses increased 18.5%, to $6.34 Billion. The company said that its $16.4 billion purchase of privately-held natural gas and geothermal company Calpine – a deal that was met with opposition from consumer groups – is on track to be finished by the end the year. Last month, the utility had explained to regulators its plan to acquire Calpine. According to LSEG, the Baltimore-based utility posted a profit adjusted of $2.14 for the three months ending March 31. This was below analysts' expectations of $2.22. (Reporting and editing by Krishna Chandra Eluri in Bengaluru, Katha Kalia, Sumit Saha)
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American Electric Power exceeds profit expectations, expects minimal tariff impacts
American Electric Power, which has benefited from increased demand from commercial clients, beat Wall Street expectations for its first-quarter profits on Tuesday. It also said that tariffs will have a minimal impact on the long-term plan of spending. Massive investments by Big Tech in artificial intelligence and infrastructure related to it have led to a surge of demand for electricity, which has encouraged energy producers' investments. AEP announced in February that it would increase its $54 billion capital plan to $10 billion due to the demand for data centres in the Midwest and Southern service areas of AEP. Bill Fehrman, CEO of GE Energy, said that capital investments were essential to improving reliability and customer service as well as meeting the new 20 gigawatts in power demand expected by the end decade. We have calculated that the direct tariff impact on our capital plan of $54 billion is very minimal, at around 0.3%. The U.S. Energy Information Administration said in April that the U.S. electricity consumption would reach new records in 2025 and 20,26. Demand for power will rise to 4,201 billion Kilowatt Hours (kWh) by this year. AEP reported that commercial load increased 12.3% during the quarter. Operating earnings for its vertically integrated utilities division were $349.9 millions, up from $300.3 million the year before. Transmission and Distribution utilities reported an operating profit of $192.3 millions, up from $150.3 million. AEP provides service to 5.6 million customers across 11 states, including Texas and Ohio. It has the largest transmission system of electric power in the U.S. The utility has reaffirmed their annual adjusted earnings per share forecast between $5.75 and $5.95. According to data compiled and analyzed by LSEG, the Colombus-based Ohio company reported an adjusted profit per share of $1.54 for the three-month period ended March 31. This was higher than analysts' estimates of $1.40.
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Argentex's collapse on untested currency swings: from rebound to rescue
Argentex’s chief executive Jim Ormonde, and its chief financial officer Guy Rudolph bought shares of the London-listed forex broker in early April as the stock recovered from a March plunge. Ormonde was appointed 18 months ago amid a sagging stock performance. In a statement on April 2, Ormonde said that Argentex "reset" its 2024 goals and is now "well-positioned to return to profitable expansion." The company's shares have risen more than 50% in the past year. The company's liquidity position plummeted in a flash, and the financial markets reacted with a dramatic shift. Argentex became one of the most visible corporate victims in a matter of weeks as a result of the market volatility caused by the global war on trade. IFX Payments bought Argentex for a fraction of its value, and both the CEO and CFO are gone. Argentex declined comment. IFX, a UK-based company, did not respond to requests for comments. The 2nd of April was also known as "Liberation Day" when U.S. president Donald Trump announced sweeping tariffs in return against a number of countries. This triggered increased volatility among trading firms, with currency markets moving widely. The Swiss franc, the safe haven currency, surged by 7% against U.S. dollars in April. Meanwhile, Deutsche Bank's currencies volatilty index, which measures currency fluctuations, rose up to 28% and reached its highest level for two years. Argentex has navigated past big market crashes such as the decline of the pound against the dollar, Brexit and COVID-19. According to two people who are familiar with the firm, despite having done stress tests and scenario modelling, the company had not planned for the rapid devaluation of the dollar against many major currencies. The information they shared was confidential, so the company asked that their names not be used. One person said that Argentex is most vulnerable to sudden increases in the value of the Swiss franc, the euro, and the pound against the dollar. ZERO-ZERO LINES Argentex stated in its annual report for 2024 that it "performs regular stress tests to ensure the group is able to meet its current and future obligations if there were a significant change to the market." According to this person, Argentex, when the market moved in its favor, was exposed to cash calls by its liquidity providers. It also found itself unable to ask for margins from many of its customers due to its zero-zero line. Barclays and Citigroup declined to comment. They are two of Argentex's liquidity suppliers. According to an ex-forex broker, this business model is used by smaller FX brokers in London. It does not require the customer to pay initial margin or additional funds to cover intra-day volatility. Smaller brokers instead include margin costs into the price they charge for trading. The person stated that Argentex has paid out more than 20 million pounds (26.65 millions) in the 12 days following April 3. Argentex's full-year financial statements show that at the end December of last year, it had 18.4 millions pounds in cash. In its financial statements, the company stated that its cash flow position fluctuates significantly from month to month as a result of margin calls and working-capital movements. One Argentex employee, speaking under condition of anonymity as they were not authorized for public comment, said that "zero-zero contract aren't necessarily the devil." They said that the issue was "ensuring the business is healthy enough to accept those contracts". One of the two individuals said that the reasons for Argentex’s liquidity crisis were complex. It lacked a hefty financial balance sheet like its larger rivals, and was unable adequately to hedge its positions. The company was attempting to simplify its relationships with liquidity providers and implement a Treasury function to manage their positions when the markets were thrown into chaos by Trump's Tariffs. They also said that they were trying to boost its cash position through new products. In April, the company announced that it would launch its digital account and payment businesses this summer. Argentex, which was founded in 2012, received its authorization as an electronic-money institution (EMI) by the UK Financial Conduct Authority in 2018. According to Argentex's website, a quarter are from the financial industry. According to company filings from 2024, the family office of John Beckwith - one of Britain's richest financiers - backed the company in 2013. Beckwith's Pacific Investments Management held a 17% stake in the company before the deal was announced with IFX, according to LSEG. Pacific Investments refused to comment. EMIs have flooded London in the past decade. They offer payment services and enjoy a lower regulatory burden than banks. FCA regulations require EMIs keep counterparty and liquid risks in check, including the risk that a party may not fulfill its obligations. In a February letter to all CEOs and directors of payment firms, including EMIs (Electronic Money Institutions), the FCA stated that it was still concerned about risks for consumers and integrity of the financial system. The FCA gave EMIs a deadline of March 2025 for them to test their operational resilience in the event of a shock. When contacted for this article, the FCA declined comment. Argentex's other regulators in Australia, Dubai, and the Netherlands declined to comment on this matter or didn't respond to any requests for comments. FIELDING OF BIDS The company requested that trading be suspended on April 22. It revealed that its near-term liquidity was being affected by margin calls related to its foreign currency forward and options book after the rapid devaluation of the U.S. Dollar in response to U.S. Tariffs and Government Spending Cuts. The company announced that it would need "an immediate injection of cash to ensure the Company’s continued solvency." The board had rejected two of the three takeover offers, including one from IFX Payments. The board sought a bridging deal with IFX Payments to meet its liquidity needs. Argentex had announced on April 25 that it had reached a deal to buy IFX for approximately 3 million pounds. CEO Ormonde was leaving immediately. Argentex shares began trading again this week and fell 91%. The company announced that it had received a loan of 20 million pounds from IFX, and that Rudolph, the finance chief along with other board members had resigned. ($1 = 0.7505 pounds)
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Attenborough's new film shows both destruction and hope for the oceans of our planet
In a new documentary premiering on Tuesday, British naturalist David Attenborough said there was hope for the future health of our oceans. The film shows the extent of human-caused damage and the oceans’ capacity to recover. Attenborough's latest work, "Ocean", charts the challenges that the seas have faced over the course of his career, from industrial fishing practices and coral bleaching to destructive industrial fishing. In a trailer for the film, he says, "I now understand that the most important place on Earth, is not on land but at sea." The release of the film in its entirety coincides with Attenborough’s 99th Birthday. The premiere will take place in London on Tuesday, with a red carpet and celebrities walking the blue one. Attenborough stated that despite depicting the current bleak state of ocean health, discoveries made during the filming provide hope. He said, "The ocean is capable of recovering faster than we ever thought possible. It can bounce back to its life." "If we can save the ocean, we will save our planet." "After a lifetime spent filming our planet, I'm certain that nothing is more vital." The release of the film comes before the United Nations Ocean Conference in Nice, France in June, where it is hoped that more countries will ratify an agreement for 2023 to protect ocean biodiversity. Only 21 countries have signed the agreement, far short of the required 60. (Reporting by Susanna Twidale, Editing by Hugh Lawson).
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Copper boosted by weaker dollar and focus on tariff tensions
The dollar eased on Tuesday, but the impact of a slowdown in global demand and growth due to U.S. tariffs on imports and the trade war between China & the United States weighed on sentiment. At 1053 GMT, the benchmark copper price on London Metal Exchange was up by 0.7% to $9,436 per metric tonne. Tom Price, Panmure Liberum's analyst, said: "We are neutral for now and bearish in the second half of the calendar year due to seasonality and policy changes." Tariffs will hurt this year's trade once they have a full impact. The focus is now on whether the trade tensions will reduce after China announced last week that it was evaluating a proposal to hold discussions over U.S. president Donald Trump's tariffs of 145%. China's Commerce Ministry stated that Beijing was open to discussions, signaling a possible de-escalation of the trade war. China is the largest consumer of industrial metals, such as copper. Copper is used in power and construction industries. Copper stocks monitored by the Shanghai Futures Exchange, or ShFE, in warehouses was a positive for traders. Around 89,000 tonnes have fallen nearly 70% from late February, and are now at their lowest level since mid-January. Traders said that the expectations of a copper market surplus are worrying. According to a survey released last week, the copper market will have a surplus of over 60,000 tons in this year. This will be followed by a deficit in 2026. Edward Meir of Marex, the consultant, said that he believes these estimates will come down in time, particularly if supply issues continue. He was referring to the shortages in concentrates used to produce copper metal. Technically, copper has strong support around $9,310 to $9,315 at the convergence of the 100-day and 200-day moving averges. Around $9,475, or the 50-day average, is where resistance on the upside lies. The lower dollar price of metals, which is cheaper for holders other currencies, would increase demand. Aluminium dropped 0.5%, to $2.419 per ton. Zinc increased by 0.7%, to $2.626, while lead rose 0.3%, to $1.939; tin rose 3.5%, to $31,775; and nickel increased 0.8%, to $15.610 per ton. Reporting by Pratima Deai. Mark Potter edited the article.
Sources say ADNOC is set to receive unconditional EU antitrust approval for Covestro.
Two people with direct knowledge said that the Abu Dhabi state oil company ADNOC will receive unconditional EU antitrust approval in its $16.6 billion acquisition of German chemicals firm Covestro for 14.7 billion euros.
The largest deal ever signed by ADNOC demonstrates the Middle East's plans to diversify investments and reduce their dependence on oil as global energy transitions move towards cleaner sources of energy.
According to the source, the European Commission is not concerned about competition because the companies are not overlapping.
The EU Competition watchdog declined to comment. ADNOC could not be reached immediately for comment. The company expects the deal to close in the second half this year.
Covestro, who earlier Tuesday reduced its core profit expectation for 2025, has said that it does not speculate on regulatory proceedings.
"XRG and Covestro work constructively with the relevant authorities to file FSR, FDI, and merger control filings. The company stated in an email that it was confident all approvals would be received by the long-stop deadline (02.12.2025).
XRG, the international investment arm within ADNOC, will be the majority shareholder of Covestro. Covestro manufactures plastics and chemicals used in the automotive, engineering, construction and construction sectors.
The South African and Indian Competition Watchdogs have cleared the deal already without demanding any remedies.
The EU Foreign Subsidies Regulation, FSR, also applies to this acquisition. It focuses on unfair foreign aid. The rules are designed to curb unfair competition by non-EU companies that receive government subsidies.
ADNOC is still awaiting FSR approval for this deal. Last year, it received unconditional EU approval under the FSR to acquire Fertiglobe.
(source: Reuters)