WEBVTT - Shell Sticks With Payouts, BASF'S Warning, Natwest Outperforms 

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, The Stock Movers podcast,

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<v Speaker 1>your roundup of companies making moves in the stock market,

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<v Speaker 1>harnessing the power of Bloomberg data.

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<v Speaker 2>Let's take a look at some stocks on the move

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<v Speaker 2>today in Europe. We're joined now by Bloomberg. Sam Unstead Morning.

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<v Speaker 2>Sam Shell's earnings out this morning. Lots of headwinds.

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<v Speaker 3>How do they do?

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<v Speaker 2>Yeah, lots of headwinds for the oil industry generally. I've

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<v Speaker 2>had quite a lot of reporting. Excellent mobils out later

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<v Speaker 2>on today for those of you who can keeping an eye.

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<v Speaker 2>Shell overall pretty good. So the really key thing with

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<v Speaker 2>the oil industry and oil companies in particular is buybacks.

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<v Speaker 2>They kept the pace of their buybacks up three and

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<v Speaker 2>a half billion dollars a quarter. That was sort of

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<v Speaker 2>broadly expected but still welcome from investors. But the really

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<v Speaker 2>key thing is that their cash flow was pretty good.

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<v Speaker 2>So although they've had to take on a bit more

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<v Speaker 2>debt because the oil market has weakened a little bit

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<v Speaker 2>and the macro picture is weakened, they are still keeping

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<v Speaker 2>up the backpace and the cash flow is coming through,

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<v Speaker 2>so there's a sort of confidence that they may well

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<v Speaker 2>be able to navigate this a little bit better than

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<v Speaker 2>some of their peers.

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<v Speaker 3>Yeah, and it's interesting also the kind of oil market

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<v Speaker 3>moves that we've been tracking after the kind of big

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<v Speaker 3>leg lower on the worries around the US recession. Actually

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<v Speaker 3>they have come up a little bit because of the

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<v Speaker 3>possibility of US China trade talks and maybe even fresh

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<v Speaker 3>sanctions or at least a threat of that against Iranian

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<v Speaker 3>oil flows. So you've also seen a bigger move in

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<v Speaker 3>terms of the oil market as the backdrop. Moving though

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<v Speaker 3>to the chemicals, BASF they say in their earnings that

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<v Speaker 3>they're still waiting to see a reaction.

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<v Speaker 2>Yes, So this has been kind of a trend across

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<v Speaker 2>the earning season of companies saying that right now things

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<v Speaker 2>are so uncertain that it's really difficult for us to

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<v Speaker 2>give a very strong guidance. Very few companies completely pulling

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<v Speaker 2>their guidance, but definitely putting a lot of uncertainty over

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<v Speaker 2>all of it. And I think BASF is often a

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<v Speaker 2>very good company to look at in these things, and

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<v Speaker 2>chemicals companies in general, because they play such a key

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<v Speaker 2>role in the supply chain that isn't often sort of

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<v Speaker 2>noticed quite so clearly. So BASF saying that, you know,

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<v Speaker 2>prices have come under pressure in the first quarter, but

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<v Speaker 2>now they have to wait and see as exactly what

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<v Speaker 2>kind of effect tarraphs are going to have over the

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<v Speaker 2>course of the rest of the year. So really in

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<v Speaker 2>line with a lot of their industrial peers, you know,

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<v Speaker 2>over the course of this earning season, uncertainty overshadowing basically everything.

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<v Speaker 3>Yeah, uncertainty, uncertainty, ncerty.

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<v Speaker 2>But that West, they say their earnings point them in

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<v Speaker 2>a good direction. Almost no uncertainty from that West actually.

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<v Speaker 2>So in Thatwest again we've had all the UK banks

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<v Speaker 2>reporting over the course of this week that West pretty

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<v Speaker 2>strong results again, big boots from mortgage lending. We've seen that,

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<v Speaker 2>you know, the run up to the stamp duty threshold

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<v Speaker 2>there was a huge rise in mortgage lending, saw that mployees.

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<v Speaker 2>We've seen that in that West as well. For that West,

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<v Speaker 2>you know, in comparison to the ones that have come

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<v Speaker 2>earlier in the week, they have a much lower in

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<v Speaker 2>fact almost no international exposure in the way the Barclays does.

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<v Speaker 2>They also have a much smaller motor finance business, you know,

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<v Speaker 2>compared to Lloyd's which is the largest lender in that space,

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<v Speaker 2>and there's an ongoing probe there, so their results much cleaner. Really.

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<v Speaker 2>The only drawback that analysts have said, and you know

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<v Speaker 2>shares are up this morning, is that actually it could

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<v Speaker 2>have been slightly better on the guidance. So the guidance

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<v Speaker 2>has been at the top end of expectations, analysts saying

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<v Speaker 2>that it is very possible over the course of the

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<v Speaker 2>rest of the year they're actually top that that guidance.

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<v Speaker 3>Yeah, you've got four more Bank of England quarter point

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<v Speaker 3>ratecar are so priced in for this year. So yes,

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<v Speaker 3>it's interesting, isn't it. And also those high street lenders

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<v Speaker 3>seem to be entering a phase of a bit of

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<v Speaker 3>a battle in terms of the mortgage market at least,

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<v Speaker 3>which is quite they.

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<v Speaker 2>Do, they do. But there's something that's quite interesting within

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<v Speaker 2>the UK banks, and this has been talked about by

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<v Speaker 2>analysts for quite a bit, is the structural hedges right

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<v Speaker 2>that they have in place. These are these fixed income

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<v Speaker 2>portfolios that help to smooth out fluctuations in lending rates.

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<v Speaker 2>The UK banks have looked at as being as having

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<v Speaker 2>much better structural hedges in place than a lot of

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<v Speaker 2>the European banks. So although the rate cut bets have

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<v Speaker 2>ramped up for the UK banks, they should be able

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<v Speaker 2>to navigate that at least through to twenty twenty six,

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<v Speaker 2>fairly speaking.

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