Trending tickers: Rolls-Royce | Rio Tinto | ASML | Nvidia
Rolls-Royce's share price has been revving up as its new CEO delivers on a turnaround plan.
Rolls-Royce saw shares jump after it announced a new chief financial officer (CFO). New Rolls-Royce boss Tufan Erginbilgic hired Helen McCabe from his alma mater BP (BP.L) as CFO.
Erginbilgic said she has a “track record of promoting rigorous financial discipline” and her experience would be “invaluable as we move, at pace, to transform Rolls-Royce”.
“I have experienced her abilities first-hand and her skillset will complement the existing capabilities of the executive team, contributing to Rolls-Royce delivering on its significant potential.” he added. “I would also like to extend my thanks to Panos for his dedication to Rolls-Royce and support to me since my arrival.”
Erginbilgic, who took the helm of Rolls-Royce in January, has called the company a “burning platform” and launched a transformation programme to improve the profitability of the maker of engines for Airbus A350 and Boeing 787 planes.
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“While it appears the worst might be over for Rolls, the group still faces some short-term challenges. Improving the balance sheet health will be key to restoring investor confidence,” Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said.
“Navigating a potential economic downturn won’t be an easy task either. The group’s already been through several cost cutting rounds, so we don’t think there’s much fat left to trim on this front. Further improvements to the bottom line will likely have to come from other avenues.”
Rio Tinto (RIO.L)
The FTSE 100 inched up on Friday as Anglo-Australian miner Rio Tinto rose after signing a joint venture (JV) with Canada's First Quantum Minerals (FM.TO) to develop the La Granja copper project in Peru, but then came down from early morning gains.
First Quantum will acquire a 55% stake in the project for $105m (£84m) and commit to further invest as much as $546m into the JV, funding capital and operational costs to take the project through a feasibility study and toward development.
La Granja is a complex orebody located at high altitude in Cajamara, northern Peru, that has the potential to be a large, long-life operation, with a published, indicated, and inferred mineral resource totalling 4.32 billion tonnes, Rio said.
As majority owner, First Quantum will operate the La Granja project with initial work focused on completing the feasibility study.
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“Miners have adopted a more cautious approach to spending big money on projects since the last commodities boom ended so badly with companies drowning in debt. Sharing the costs via a joint venture is one way to spread the risks," AJ Bell investment director Russ Mould, said.
“The market seems to like the deal, but as with everything in mining, it will be a long and expensive journey before any copper is extracted from the deposit on a commercial scale."
La Granja currently ranks as the fourth largest copper project in the world, and Peru is the world’s second biggest copper producer.
Rio Tinto Copper chief executive Bold Baatar said La Granja cooperation makes the duo well-placed to meet rising demand for the metal amid the energy transition.
“La Granja is an exciting but complex project that has the potential to be a significant new source of the copper that is needed for the energy transition.
“This partnership underscores not only La Granja’s potential to be a significant copper producer, but Peru’s position as one of the world’s most important mining investment destinations,” Baatar said.
The world’s supplier to the semiconductor industry is Europe’s biggest tech company and has gained renewed interest from investors amid an AI boom.
The Dutch outfit is likely to benefit heavily from the rapid adoption of generative AI and machine learning technologies.
“We expect AI to be a powerful driver of leading-edge logic wafer capacity growth through greater GPU, CPU, and connectivity chip volumes and rising die sizes,” Jefferies Group said in a research note.
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ASML is the sole provider of extreme ultraviolet lithography machines needed for the production of cutting-edge chips.
However, markets have also been cautious as ASML currently finds itself caught in rivalry between the US and China.
This week, China’s commerce minister sought to assure the boss of ASML that it remains a reliable business partner as the Dutch government imposes new restrictions on exports of advanced semiconductor technology.
Investors are celebrating the surge in tech stocks in 2023 as though last year — the worst year for risk markets in decades — never happened.
Chipmaker Nvidia is approaching a 90% return this quarter — its best in over two decades.
However, for a stock that’s rallied in 11 of the last 12 weeks investors are waiting for the dip to begin.
“Nvidia stock has been a monstrous performer, but now traders have to be a little more cautious. Meaning that stocks can’t surge higher at this pace forever and at some point, Nvidia will need a larger correction and/or some consolidation,” Brent Kenwell from TheStreet, said.
Watch: Stocks to Watch in Europe: UBS, Next, Chipmakers
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