WEBVTT - Rio Tinto Talks, BNP, L'Oreal

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News.

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<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

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<v Speaker 2>in the stock market, harnessing the power of Bloomberg Data.

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<v Speaker 1>Well, let's take a look at some stocks on the

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<v Speaker 1>move today in Europe. I'm Stephen Carroll and I'm joined

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<v Speaker 1>by Bloomberg reporter Chloe Malei Choch. Good morning. Let's start

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<v Speaker 1>with two companies that could form the world's biggest miner.

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<v Speaker 3>Yeah, Saria Tinto and Glencore are in talks to create

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<v Speaker 3>the world's largest mining company. This is coming a little

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<v Speaker 3>over a year after initial talks had actually failed between

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<v Speaker 3>those two companies, and it also comes at a really

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<v Speaker 3>interesting time in the mining industry where companies are wanting

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<v Speaker 3>to do more and more deals because they want to

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<v Speaker 3>gain more and more access to copper. So copper is

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<v Speaker 3>metal that's really really in demand at the moment because

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<v Speaker 3>it's really really essential to the energy transition to the

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<v Speaker 3>AI boom as well, and it has been hitting a

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<v Speaker 3>new record highs lately because they are growing concerns about

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<v Speaker 3>whether or not there will be enough supply. So this

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<v Speaker 3>potential deal between glen Core and Reintindo would mean creating

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<v Speaker 3>this kind of copper mining giant. But they are big

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<v Speaker 3>hurdles to consider as well, and that might be explaining

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<v Speaker 3>why we had some weakness in Rio's shares actually this morning,

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<v Speaker 3>even though glen Core shares arose quite impressively. So the

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<v Speaker 3>three kind of big challenges to think about are the

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<v Speaker 3>core of business from glen Core, so that's the business

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<v Speaker 3>that's really important for glen Corbert Reatinto has actually exited

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<v Speaker 3>its coal business to refocus on iron ore and copper,

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<v Speaker 3>so there's a little bit of a difference there. There's

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<v Speaker 3>also the need to get regulatory clearance across more than

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<v Speaker 3>eight jurisdictions, and then there's also the problem of Rio

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<v Speaker 3>having a dual listed company structure, which is really complicating

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<v Speaker 3>at the potential for an all share transaction. So there's

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<v Speaker 3>a few things to consider here, some details to be

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<v Speaker 3>ironed out, and analysts have said that also the ultimate

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<v Speaker 3>size of the deal be a little bit smaller than

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<v Speaker 3>expected because this all asset combination that's being talked about

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<v Speaker 3>appears a little bit more unlikely because of those challenges.

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<v Speaker 3>So there's a lot more developments to keep an eye on.

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<v Speaker 1>Yeah, indeed, and the share price movement of interest to

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<v Speaker 1>gancre oup a eight point six percent, Riotento down one

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<v Speaker 1>and a half percent in London. Let's turn next to

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<v Speaker 1>some interesting upgrades that have come from BMP.

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<v Speaker 3>Yeah, so BNP a Paraba has been kind of been

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<v Speaker 3>investors in analysts good graces lately, so JP Morgan upgraded

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<v Speaker 3>the company today, saying it is likely to see improved

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<v Speaker 3>profitability and saying also that there are fewer concerns now

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<v Speaker 3>about the capital level at the French bank and that's

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<v Speaker 3>company that needs that capital to cover some litigation risks.

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<v Speaker 3>And JP Morgan analyst said that this is all thanks

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<v Speaker 3>to recent management initiatives and that it's really time to

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<v Speaker 3>kind of get in on what they called the cheapest

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<v Speaker 3>bank in Europe. And this is also be bnp second upgrade

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<v Speaker 3>this week. We also had UBS upgrading the stock just

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<v Speaker 3>a couple of days ago, saying that the evaluation was

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<v Speaker 3>really cheap at the moment and also noted the same

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<v Speaker 3>as JP Morgan analysts that the capital situation was improving

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<v Speaker 3>for BNP. So those two upgrades come a quite interesting

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<v Speaker 3>time for the bank, given that it has just lost

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<v Speaker 3>a bid to throw out a verdict against it which

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<v Speaker 3>essentially accused it of funding a regime in Sedan that

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<v Speaker 3>committed human rights abuses, and that means that now BNP

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<v Speaker 3>is actually more likely to have to pay a big settlements,

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<v Speaker 3>which is where that stronger capital comes in. But it

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<v Speaker 3>seems that from analyst perspective, those litigation risks are not

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<v Speaker 3>they're not they're not going to be too bad for BNP,

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<v Speaker 3>and that that profitability is going to be much better

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<v Speaker 3>and therefore we've got those upgrades.

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<v Speaker 1>Okay, Well, staying in France, let's turn to Loreal. Let's

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<v Speaker 1>shairs are five percent higher this morning, investors deciding they're

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<v Speaker 1>worth it.

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<v Speaker 3>Yes, absolutely, and that's because Ubs upgraded Loreal this morning,

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<v Speaker 3>saying that the sales are expected to grow quite strongly

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<v Speaker 3>going forward. And this is a company that has seen

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<v Speaker 3>quite a lot of ups and downs over the last

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<v Speaker 3>year over twenty twenty five. It's part of the cosmetics industry,

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<v Speaker 3>of course, which obviously had to deal with a few

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<v Speaker 3>challenges last year, including tariffs, but also really quite muted

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<v Speaker 3>consumer confidence. But analysts seem a lot more optimistic about

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<v Speaker 3>Loreal's prospects for this year, and Bloomberg Intelligence as well,

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<v Speaker 3>for example, said that the company's expansion in emerging markets

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<v Speaker 3>and a lot of product innovation as well would be

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<v Speaker 3>a big boost for twenty twenty six, and also saying

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<v Speaker 3>that there's going to be a renewed focus on affordability

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<v Speaker 3>going forward because of course the consumer confidence a problem

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<v Speaker 3>hasn't really gone away and will continue for this year.

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<v Speaker 3>But it seems that analysts and investors are quite optimistic

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<v Speaker 3>that Loreal will be able to stand out in this

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<v Speaker 3>industry this year.

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