© Reuters. Jeffrey Smith
Investing.com — European industrials rose again on Wednesday as wholesale energy prices continued to fall on the back of unseasonably warm weather.
BASF (ETR:) shares rose 3.2% to a two-month high, while Covestro (ETR:) shares rose 3.1% to a seven-month high. This was due to a further 7% decline in European benchmark prices for the main raw material, natural gas. The previous month, which serves as a reference price for Northwest Europe, fell by 7.9% to €66.60 at 1 MWh by 09:00 ET (14:00 GMT).
Meanwhile, in France, energy-intensive glass producer Saint-Gobain (EPA:) rose 3.6% to a seven-month high, while Swiss-based cement maker Holcim (SIX:) rose 1.1% to a one-year high.
TTF futures are now down on all but two of the last 13 trading days, down 80% from their peak last spring when European gas buyers were scrambling to recapture lost Russian supplies. Falling over.
Energy-intensive cyclical stocks have regained support in recent weeks, despite continued concerns about the global economy after a hit last year, said Kristalina Georgieva, managing director of the International Monetary Fund. said over the weekend that a third of the global economy could be in crisis). 2023 recession).
BASF and Covestro are now trading at dividend yields well above their historical average of around 2%. Both may come under pressure to conserve cash after a tough year, but BASF has not suggested changing its policy of raising its annual dividend each year. In 2022, it will pay €3.40 per share (€1 = $1.0615), implying a yield of 6.7% at current prices. The company expects him to post a pre-interest and pre-tax profit of around €7 billion in 2022. Covestro is also expected to keep its dividend at €3.40 per share, which means a yield of 8.3% at current prices.
