Tesla to join S&P 500
Tesla Inc is set to join the S&P 500 in December, a major win for Chief Executive Elon Musk that boosted the electric car maker's shares 14% on Monday in anticipation of a US$51 billion trade by index funds adjusting their holdings.
S&P Dow Jones Indices announced that the company would join the S&P 500 index prior to the opening of trading on Dec. 21, potentially in two tranches making it easier for investment funds to digest.
"Tesla will be one of the largest weight additions to the S&P 500 in the last decade, and consequently will generate one of the largest funding trades in S&P 500 history," S&P Dow Jones Indices said.
With a stock market value over US$400 billion, Tesla will be among the most valuable companies ever added to the widely followed stock market index, larger than 95% of the S&P 500's existing components.
Its inclusion means investment funds indexed to the S&P 500 will have to sell about US$51 billion worth of shares of companies already in the S&P 500 and use that money to buy shares of Tesla, so that their portfolios correctly reflect the index, according to S&P Dow Jones Indices. -Nampa/Reuters
Volkswagen accelerates shift to electric era
Volkswagen is paring back the variety of combustion-engined cars and retooling more factories to build electric vehicles in an effort to keep up with rival Tesla, the chief executive of the world's largest carmaker said.
German factories in Emden and Hanover will be converted to build electric cars as part of a 73 billion euros (US$86 billion) investment plan to ramp up development of zero-emission and self-driving cars, the company said on Monday.
"Our business so far has been running valuable brands. To increase brand value, driving margins," Herbert Diess explained in a call with investors and analysts on Monday.
On top of focussing on achieving economies of scale in electric and combustion engine components, Volkswagen is seeking to also gain expertise in software programming, so it can build and develop intelligent self-driving vehicles.
"They are also ramping up fast. We have more different body styles, and when it comes to an established dealership network, we should have an advantage over Tesla," Diess said. - Nampa/Reuters
Prosus expects up to 22.7% earnings growth
Prosus NV, the giant investor in online classifieds, food delivery, and payments, expects to report 16.9% to 22.7% growth in earnings per share for the six months to the end of September, it said on Monday.
The company's forecast comes a week before it is due to report earnings on Nov. 23. The company said it faced challenges due to the coronavirus pandemic particularly in countries where government lockdown regulations were wide ranging and long lasting.
"However, we have seen a sharp recovery in all of our impacted businesses once lockdown regulations began easing," the company said in a statement.
It forecast an increase of US$0.26 to US$0.35 over the US$1.54 in earnings per share it registered in the same six months of 2019.
Shares in Amsterdam were down 0.5% at 88.34 euros (US$104.56) at 1607 GMT. Prosus is controlled by Naspers of South Africa and owns a 31% stake in Chinese software giant Tencent. -Nampa/Reuters
Vodacom reinstates medium-term targets
South African mobile operator Vodacom Group reinstated its medium-term targets on Monday on expectations of an improving economic outlook but nudged its operating profit forecast lower with customer finances likely to remain strained.
The firm, which is majority owned by Britain's Vodafone, postponed issuing medium-term forecasts in May due to the uncertain outlook as the effects of the coronavirus pandemic unfolded. Echoing comments from its parent company, it said demand for its services had been relatively resilient in the first half of its financial year.
Vodacom benefited from strong demand for voice, data and financial services during the coronavirus lockdown as people were forced to work, school and entertain themselves from home.
It forecast a mid-single digit operating profit growth, anticipating the work-from-home trend would normalise and the economic fallout from the pandemic would continue to cap disposable income.
"Our medium-term target for operating profit is lower than the mid-high single digit growth that we set at our interim results last year," group chief financial officer Raisibe Morathi told analysts. - Nampa/Reuters
Endeavour Mining to buy Teranga
West Africa-focused Endeavour Mining has agreed to buy Teranga Gold in an all-share deal to create a top 10 gold producer with an aim to list in London, the companies said on Monday, a week after they announced they were in talks.
The agreement is a breakthrough for the fragmented gold sector and for Endeavour, whose previous attempt at a major merger failed. A London listing would plug a gap left by Randgold's departure following its merger with Barrick completed at the start of 2019.
With investors jittery about pricey takeover deals after a surge in gold prices, Endeavour's shares fell after the two said they were in talks.
Endeavour shareholders will get 66% of the combined entity, with Teranga shareholders holding the remaining 34%. Teranga will get three seats on the board to Endeavour's seven.
Endeavour will pay 0.470 of its own shares for each Teranga share, a 5.1% premium based on Friday's closing prices valuing Teranga, whose shares are up 97% this year, at 2.6 billion Canadian dollars (US$1.99 billion). - Nampa/Reuters