The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
0544 GMT - Sime Darby warns that its future earnings will be significantly affected by Malaysia's new policy of taxing foreign-sourced income starting next year, given that it derives most of its revenue from overseas. The group's 1Q FY 2022 quarterly report shows that nearly 90% of revenue came from countries like China and Australia via a variety of businesses including sales of luxury vehicles and of industrial equipment for mining and construction. The group says the full impact of the policy remains unclear pending further details. Shares are 0.9% lower at MYR2.21, taking year-to-date losses to 4.3%. (chester.tay@wsj.com)
0521 GMT - Estun Automation is likely to gain from growing demand for automation, Daiwa Capital says. The Japanese bank initiates coverage on the stock with an outperform rating and a CNY32 target price. Continued market-share gains in industrial robots, margin growth and easing raw material costs could help drive Estun's adjusted net profit growth in 2022, Daiwa says. The company's industrial-robot segment could grow at a 38% CAGR in revenue over 2020-23, as it is one of the few companies globally with strong core technology needed to produce industrial robots, Daiwa adds. Shares are 1.1% lower at NY28.13. (justina.lee@wsj.com)
0517 GMT - Australia's S&P/ASX 200 closed 0.5% lower at 7239.7, paring early losses as futures pointed to U.S. equities bouncing back from Friday's Omicron-driven selloff. The benchmark was down 1.4% in early trade before partially recovering amid hopes that the latest Covid-19 variant may not be as deadly as initially feared. Qantas, Webjet and Corporate Travel Management still lost between 2.0% and 2.8%. Banking stocks continued their recent retreat, with Westpac, Commonwealth, NAB and ANZ falling between 0.8% and 1.7%. The financial sector has fallen 8.0% in November amid concern over squeezed lending margins. The materials and tech sectors rose by 0.7% and 0.6%, respectively. (stuart.condie@wsj.com; @StuartLCondie)
0511 GMT - Reliance Industries' telecom unit should be able to keep its subscriber growth momentum intact after its planned price increases, Jefferies says, as it raises its target price to INR2,950 from INR2,880. Reliance's telecom unit, Jio, announced price increases of about 20% for its mobile plans on Sunday, which remain at a discount to rival Bharti Airtel's prices. Jefferies raises its EPS estimates for Reliance by 3%-4% for fiscal years 2023 and 2024 and boosts Jio's valuation to $96 billion. Meanwhile, Jefferies says the emergence of a new Covid variant could affect Reliance's energy and retail businesses if restrictions are imposed. It maintains its buy rating. Shares are 2.2% higher at INR2,464.35. (kosaku.narioka@wsj.com; @kosakunarioka)
0502 GMT - Shinhan Financial Group's near-term earnings may be weighed on by regulatory pressure on its nonbank business, as the South Korean government ramps up curbs on household debt, Daiwa Capital says. Shinhan may also have around KRW200 billion additional costs in 4Q, following its misselling of hedge-fund investment products, which would weigh on earnings, Daiwa says. However, the bank says policy-rate increases by the Bank of Korea in 2H could help to support Shinhan's net interest margin growth in 4Q. Daiwa cuts its target price on the stock to KRW40,000 from KRW43,000 after adjusting its PBR valuation and maintains a hold rating. Shares are 0.4% lower at KRW36,550. (justina.lee@wsj.com)
