COMPANY NEWS IN BRIEF

Chevron to buy Noble

Chevron Corp said it would buy oil and gas producer Noble Energy Inc for about $5 billion in stock, the first big energy deal since the coronavirus crisis crushed global fuel demand and sent crude prices to historic lows.

The oil price crash has decimated shares of many energy companies, making them attractive targets for those that have weathered the downturn and have the resources to buy. Chevron ended the first quarter with a cash pile of US$8.5 billion after withdrawing a US$33 billion bid for Anadarko last year.

The purchase boosts Chevron's investments in US shale, and gives it Noble's flagship Leviathan field off the shore of Israel, the largest natural gas field in the eastern Mediterranean.

The deal makes Chevron the first oil major to enter Israel. Chief executive officer Mike Wirth told Reuters "We certainly are mindful of the fact that there are political differences and tensions" between Israel and neighbours where Chevron also has business including Saudi Arabia, Kuwait, Qatar and the Kurdish region of Iraq.

He said Chevron was "apolitical" and "a commercial actor" in the region. "We engage with all of our different stakeholders as we go through something like this," Wirth said, declining to detail the timing of discussions with partner governments. – Nampa/Reuters

IBM earnings beat estimates

International Business Machines Corp posted second-quarter revenue and profit that beat analysts' estimates on Monday, riding on the strength of its high-margin cloud computing business, sending its shares up 6%.

IBM has jettisoned some of its legacy business to focus on cloud computing, an area that has seen a lot of action in recent years as companies ramp up their digital shift to control costs and boost efficiency.

Revenue from the cloud business, previously headed by IBM's new boss Arvind Krishna, rose 30% to US$6.3 billion. Krishna took over as chief executive officer from Ginni Rometty in April, while appointing former Bank of America Corp's top technology executive Howard Boville as the new head of IBM's cloud business.

"As we got into the latter half of the second quarter, we saw a marked inflection in clients' acceleration to digital transformation and cloud. And you saw that play out in our cloud performance, which was up very nicely," chief financial officer James Kavanaugh told Reuters. – Nampa/Reuters

SoftBank pulls investment

SoftBank has pulled a more than US$500 million investment from Credit Suisse's supply chain finance funds after the Swiss bank reviewed the funds including the Japanese conglomerate's role.

The Swiss bank launched the review after the Financial Times reported last month that SoftBank had put US$500 million into some Credit Suisse funds, which in turn invested in assets selected by SoftBank-backed lender Greensill Capital.

Some of the funds' investments were in notes backed by loans Greensill made to other companies backed by SoftBank's Vision Fund.

In a memo to the funds' investors on Monday, the Swiss bank said it would change investment guidelines for its supply chain finance funds and said it had terminated an agreement with an investor in April for three of its four supply chain funds to exclusively source all of their notes through Greensill.

A source with direct knowledge of the matter confirmed that the investor which had terminated the agreement was SoftBank, and that the Japanese group had pulled its full investment from the funds. – Nampa/Reuters

Chevron sees choppy economic activity

The chief executive of US oil giant Chevron Corp said the uncertainty of the Covid-19 pandemic has it planning for "choppy" oil prices and economic activity globally.

Chevron said on Monday it would buy oil and gas producer Noble Energy Inc for about US$5 billion in stock, the first big energy deal since the coronavirus crisis started.

"The crystal ball is cloudy right now," Mike Wirth said in an interview. "There is so much uncertainty on the trajectory of the pandemic, the rate of development of effective vaccines and government policy interventions to try to manage risk between here and there.

The deal boosts the company's natural gas portfolio with Noble's flagship Leviathan field in Israel, the largest natural gas field in the eastern Mediterranean.

Noble's holdings also include shale properties in Colorado and in the Permian Basin, the top US shale field, where Noble's 37 230 hectares is a "a nice but undersized Permian position" that compliments Chevron's existing land, Wirth said. – Nampa/Reuters

AstraZeneca supported by vaccine hopes

The British blue-chip index ended down with energy stocks tracking a decline in oil prices, while AstraZeneca marked its strongest close ever on optimism over its Covid-19 vaccine.

The commodity-heavy FTSE 100 index was down 0.5% on the day, with BP Plc and Royal Dutch Shell Plc among the biggest drags as oil prices fell in anticipation of weaker demand.

Heavyweight drug maker AstraZeneca helped cap some losses, rising 1.5% after data showed its experimental Covid-19 vaccine was safe and produced an immune response in early-stage clinical trials in healthy volunteers.

Still, the stock ended largely off an intra-day record high hit in anticipation of its announcement. The mid-cap FTSE 250 closed 0.2% higher, propped up by Future PLC. The media firm surged more than 15% after it forecast annual performance to be at the top end of market expectations.

"Following the (steep rise) from March lows, markets need another dose of positive news to keep the rally going, but given the many uncertainties ahead, the risks seem tilted to the downside," said Hussein Sayed, market strategist at FXTM. – Nampa/Reuters