Proactive Investors -
- Blue chips down six points to 7,939
- Retail sales enjoy Easter bump
- Aviva closes AIGLife purchase
BP anticipates higher production but warns on gas prices
BP (LON:BP) anticipates higher upstream production in the first quarter compared to the previous quarter, per a trading update released on Tuesday.
The oil production and operations segment is expected to be particularly strong, with a slight rise in the gas and low carbon energy segment.
However, BP warned of adverse financial impacts in both segments due to declines in natural gas marker prices, the devaluation of the Egyptian pound and price lags in BP’s production areas.
A combined financial impact of between US$500 million and US$1 billion is predicted for both segments.
The customers and products segment is predicted to benefit from improved refining margins, expected to contribute an additional US$100-200 million.
However, this is offset by a significant reduction in turnaround activity compared to the previous quarter, and impacts from a power outage at the Whiting refinery.
Oil trading results are anticipated to be strong, recovering from weaker performance in the last quarter of 2023, although fuel margins are expected to be weaker.
BP shares added 1.3 in early exchanges In response to the mixed trading update.
The FTSE 100 was last seen six points lower at 7,939.
HSBC exits volatile Argentina market
HSBC (LON:HSBA) is exiting the Argentina market through a US$550 million (£435 million) sale of its subsidiary to Grupo Financiero Galicia.
Galicia is the largest private financial group in Latin America’s second-largest country.
HSBS boss Noel Quinn said: This transaction is another important step in the execution of our strategy and enables us to focus our resources on higher value opportunities across our international network.
“HSBC Argentina is largely a domestically focused business, with limited connectivity to the rest of our international network.
“Furthermore, given its size, it also generates substantial earnings volatility for the group when its results are translated into US dollars. Galicia is better placed to invest in and grow the business.”
Aviva completes AIG acquisition
Aviva PLC (LON:AV) has formally completed the £453 million acquisition of AIG (NYSE:AIG) Life Limited from Corebridge Financial.
The deal was first announced in September, with Aviva touting “significant capital and expense synergies”.
“It strengthens our prospects in the highly attractive UK protection market and continues our progress in repositioning the group towards capital-light growth,” chief executive Amanda Blanc said at the time.
Blanc was appointed to Aviva’s top position on a mandate to turn the FTSE 100 insurance giant’s fortunes around; acquisitions have played a star role in Blanc’s strategy, including last month’s acquisition of Probitas, which saw Aviva enter the Lloyd’s market.
Aviva itself has been a rumoured takeover target, with the likes of Allianz (ETR:ALVG) of Germany, Intact Financial of Canada and the Scandinavian group Tryg reportedly eyeing up a bid.
Aviva’s shares are currently 18% higher year to date.