CitigroupC $50.91 Buy
JPMorganJPM133.52 $Buy
Starbucks CorporationSBUX$81.00 Buy
SynopsysSNPS$316.60Buy
Juniper NetworksJNPR35,27 $
Promising new IPOs in Saudi Arabia and the UAE. In the USA, they are gradually tightening the screws on, with regard to share buybacks. Synopsys and Juniper create new venture.
Disclaimer: when we talk about, that something has grown, we mean a comparison with the same quarter a year earlier. Since all issuers are from the USA, then all results in dollars. When creating the material, sources were used, inaccessible to users from the Russian Federation. We hope, Do you know, what to do.
«Arabian Night, magical east": new IPOs in the Gulf monarchies
Саудовская нефтеперерабатывающая компания Saudi Aramco Base Oil, also known as Luberef, plans to arrange an IPO. Here are the deal details:
- IPO, in fact, will consist of the sale of a 30% stake in the Saudi investment fund Jadwa Investment;
- Luberef plans to raise nearly $1 billion in IPO;
- the company is a division of the Saudi state oil company Saudi Aramco. Its IPO in 2019 was the largest in history: the company raised nearly $25.6 billion.
In the neighboring Arab Emirates, the main Dubai electricity and water supplier Dubai Electricity & Water Authority (DEWA) also plans to arrange an IPO. Here are its details:
- the company plans to raise 5.7 billion;
- volumes of the planned IPO were several times higher, than originally planned;
- this IPO is part of the plan of the UAE authorities to list 10 largest companies in Dubai. In their opinion, this should inspire the country's big private companies to also make an IPO;
- the company's capitalization can reach almost 34 billion - potentially DEWA can become one of the largest housing and communal services companies on the stock exchange in the world.
This news can be viewed from several angles.. Firstly, despite, that these IPOs will only take place on the exchanges of these countries, it's still a big positive for U.S. banks., who participate in these events as underwriters.
DEWA is underwritten by Citigroup (NYSE: C), Luberef has no IPO terms yet, but, probably, Americans will also have something to lose.. In conditions, when IPO activity in the world fell sharply, it will support their investment business. And if the DEWA example inspires other companies, then, may be, we can see an IPO renaissance this year.
For American investment banks, this will be useful in the light of recent events in Eastern Europe.. J. P. Morgan (NYSE: JPM), for example, risks losing a billion dollars on investments in Russia.
Secondly, there is a clear trend towards the transition of the Gulf monarchies to a more complex economy in comparison with the simple export of oil. The money they received, probably, reinvest in projects, far from traditional energy. Even if not today, but in the future 10-15 years, and it could make them less dependent on high oil prices.
So,, CEOs of Russian oil companies need to be mentally prepared for, that dialogue with the most important OPEC countries in the future will be significantly hampered by the fact, that the economies of these countries will not need expensive oil so much.
I forbid you to redeem: New Starbucks and Washington Policy on Share Buybacks
New Starbucks CoffeeHouses Guide (NASDAQ: SBUX) terminated the share buyback campaign, in order to invest extra money in the development of the coffee shops themselves and improve the service. Or rather, old manual: Howard Schultz returned to the director's chair, who has already been the director of the network twice - in the periods 1986-2000 and 2008-2017.
Last October, the company pledged to spend nearly $20 billion on dividends and share buybacks.. But now those plans have been put on hold indefinitely..
In parallel, the Biden administration plans to complicate the lives of companies, who spend too much money on share repurchases. In particular, it is planned to prohibit directors of the company from selling their shares during the first three years after the announcement of the start of the buyback program. Directors will also be required to hold company shares for several years after receiving.
Supposed, that a set of these measures will stimulate the company's management to spend more on business development and R&D.
All these events take place against the backdrop of, how US companies are approaching record highs in share repurchases. Is it so, we can see in the next few years if, if this law is passed.
I doubt it, that such measures would reduce share repurchases. Predatory would be more effective tax in the region of 50-70% of the purchase volume, but the likelihood of taking such measures, certainly, vanishingly small.
"I think, it's the beginning of a wonderful friendship.": Synopsys and Juniper create new venture
Synopsys Computer Aided Design Developer (NASDAQ: SNPS) and manufacturer of software and hardware for the work of Juniper Networks (NYSE: JNPR) announced a joint venture. Here's what this deal is all about.:
- Synopsys will be the majority shareholder;
- the unit itself is an electronic platform, where laser photonics can be practiced. In short, then this is a very important part of the high-tech industry - these solutions are needed in the most complex and high-margin areas of production: Semiconductors, II;
- the division will be created on the basis of Juniper and its 200 patents in this area;
- earlier, the technology of this division was successfully tested in the work of the Israeli chip manufacturer Tower Semiconductor. It has recently become known that, that Tower will be bought by Intel.
For both companies this project, it seems to me, can bring great benefit. For Juniper, this is a step aside and forward - into the field of high-tech production, away from the highly competitive market for networking solutions. Synopsys, this will allow to develop and strengthen its position in the software market in the field of high-tech production.
Well, in the future, may be, the new division will be listed as an independent issuer - which would be a great joy for Synopsys shareholders, after all, they would have received most of the shares of the new issuer..
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