Welcome Snackers, today’s snack will cover the market developments of FirstFarms A/S and DFDS.
Today’s Market Movements
Denmark:
OMX:C25 (-3.24%)
Sweden:
OMX:S30 (-1.45%)
Norway:
OBX:OSL (-0.63%)
S&P 500 (-0.13%)
Nasdaq (-0.88%)
Markets today
Markets the world over suffered losses today, with Europe enduring the greatest losses as its winter spike in Covid-19 worsens. The situation, in Europe, was amplified today as gas prices rose following the US sanctioning the Russian Nord Stream 2 gas pipeline project, in a move the Kremlin says is “illegal”. Whilst analysts believe the sanctions will likely be of no consequence to the completion of the project, they may threaten Russian supplies to Europe, just as an arctic blast brings snow. The negative mood in Europe has fuelled a risk-off sentiment and sell-offs in high-risk assets.
Also, in Europe, the Turkish Lira crashed 15% today after President Erdogan vowed victory in ‘economic war’ and defended the recent interest rate cuts in the country despite rising prices. The currency extends its losing streak to 11 days and has now fallen almost 40% against the US dollar ytd.
In America, President Biden aspired to bring stability to oil prices as he announced the release of 50 million barrels of Brent crude from the countries strategic reserves. China, India, Japan, South Korea and the UK will join the effort. However, the news had already been priced into the market and Brent crude subsequently rose 2.3% today (at time of writing 16:45 GMT).
Today’s snacks
FirstFarms A/S gained 1.5% today, in contrast to a C25 decline of -3.25%. The company prepares to report its Q3 2021 earnings report tomorrow and has not adjusted its guidance today following the sale of the company’s agriculture in Northwest Romania today for DKK 104m (DKK 19.7m of which is recognised as income). Prices have fluctuated in the agriculture sector with swine prices at record lows, while some agricultural commodities are experiencing rapid price increases. It will be interesting to understand how price fluctuations have impacted FirstFarms
DFDS fell -2.6% today, in line with the Danish market. DFDS conducts significant business in Turkey, which saw its currency (TRY) fall significantly today. However, DFDS settles its Turkish business in EUR, negating this impact. A depreciating currency could encourage exports stimulating business for DFDS in the Mediterranean. However, a 40% drop in the Lira ytd against the US dollar suggests hyperinflation is also a risk in the region, which would weigh negatively. Some months ago, we did a deep dive on DFDS’s Mediterranean business – you can see the recording here (in Danish):
https://lnkd.in/eah3_V7
Disclaimer: HC Andersen Capital receives payment from the companies for a #DigitalIR agreement.
Author: Philip Coombes
