![]() But make no mistake, the corporate landscape is changing, and the majors are changing with it. “Demand might still grow from here, and many companies are still chasing a share of that growth. Today, companies are building strategies around these ideas,” he said. ![]() “Just a few years ago, few within the oil and gas industry would even countenance ideas of climate risk, peak demand, stranded assets, liquidation business models and so on. Parker sees this as part of a wider trend. “Within this write down, Shell is giving us a message about stranded assets, just like BP did a few weeks ago.” Wider trend "It’s about fundamental change hitting the entire oil and gas sector. Luke Parker, vice president, corporate analysis, added: “The impairment Shell has announced is about more than an accounting technicality, or an adjustment to near-term price assumptions. Rodger added that the price crash and pandemic has already wiped US$1.6 trillion off WoodMac’s valuation of the global upstream sector. ![]() ‘’This process has further to run, and we expect further large impairments to occur across the sector.” That’s what will trigger an impairment charge. Cutting long-term price assumptions will generally result in a lower valuation for certain assets to below the accounting value held on the balance sheet. “BP and Shell are just two of the companies that have announced recent changes. ![]() Peer Entain (ENT.L)dropped 4.1% as its online sales fell for a second straight quarter.Speaking after Shell announced impairments of up to US$22 billion to its portfolio, Angus Rodger, a director with Wood Mackenzie’s upstream research team, said: “The major oil companies are going through a process of reassessing long-term oil price assumptions and investment hurdle rates as a result of the oil price crash and the coronavirus. assets, allowing a smaller equity raise to fund the deal. If we do see a turndown in consumer confidence, that will impact housing and if actually consumer demand remains quite robust and allows the BoE to carry on raising rates, that's also going to be negative for house prices," said Park.Ĩ88 Holdings (888.L) surged 16.8% after the gambling firm and U.S.-based Caesars Entertainment (CZR.O) cut the deal value of William Hill's non-U.S. "We've got a fairly conservative view towards the housing sector. Overall, the sectoral index (.FTNMX402020) fell 3.5% after mortgage lender Halifax said British house prices grew strongly in March but the cost-of-living crisis clouded the outlook. Shares of the housebuilder tumbled 14.6% after it warned of lower annual profit following a business review of its operations. The domestically focused FTSE 250 midcap index (.FTMC) slipped 0.3%, dragged down by Countryside Partnerships (CSPC.L). Aug 8 (Reuters) - Warren Buffett’s Berkshire Hathaway Inc said on Saturday its quarterly operating profit fell 10, and it took a big writedown for its Precision Castparts Corp unit, which has. "The Fed minutes confirmed the feeling in markets, which was that 50 bp rate hikes were on the table and that quantitative tightening will begin in May even though the market believes economic growth will be impacted," said Edward Park, chief investment officer at Brooks Macdonald Asset Management.Ī Bank of England survey showed that British companies' expectations for output price inflation in the coming 12 months had hit a new high of 5.9% last month, while 48.5% of companies thought the Russia-Ukraine conflict would lower sales. Federal Reserve and amid the war in Ukraine that has elevated inflation. read moreīroadly, economy-linked sectors such as oil and gas, miners, banks and insurers fell on concerns over slower economic growth following hawkish signals from the U.S. The blue-chip index (.FTSE) closed 0.5% lower, with Shell (SHEL.L) falling 2.1% as it raised its Russia writedown to as much as $5 billion, more than previously disclosed. April 7 (Reuters) - Britain's FTSE 100 slid on Thursday, weighed down by oil major Shell after it flagged a bigger writedown following its decision to exit Russia, while a jump in shares of gambling firm 888 Holdings helped limit some losses on the midcap index.
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