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    NG.   GB00BDR05C01

NATIONAL GRID PLC

(NG.)
  Report
Delayed London Stock Exchange  -  11:35:27 2023-01-30 am EST
1032.50 GBX   +0.44%
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Take Five: The tightrope trick

05/09/2022 | 02:48am EST
FILE PHOTO: The Federal Reserve building is seen in Washington, DC

(Updates story first published on Friday, adding China data to theme three and Russia story link to theme five.) How to dampen inflation without slamming the brakes on growth? That's the tricky job central banks face. But as others grapple with soaring prices, we will see how hard China's COVID lockdowns are snarling up trade and slowing its economy.

And another complication -- M&A deals worth over $400 billion are waiting for financing, but costs are rising fast.

Here is your week ahead in markets from Lewis Krauskopf in New York, Tom Westbrook in Singapore, Andres Gonzalez in Madrid; Dhara Ranasinghe and Karin Strohecker in London.

1/NAME OF THE GAME

Red-hot inflation is infusing central bankers with a sense of urgency. The Fed delivered its biggest rate rise in 22 years, Australia hiked by more than expected and India weighed in with an out-of-meeting move.

But the policy tightening rush is adding to the storm clouds gathering over the world economy, hit by soaring food and energy prices, war in Ukraine and China's COVID curbs. The Bank of England while raising rates, also flagged recession risks .

Germany's ZEW sentiment index and preliminary Q1 UK GDP data will highlight the tightrope central banks are walking. And in emerging markets, Mexico, Peru, Malaysia and Romania are likely to confirm the rate hike cycle continues.

2/INFLATION STATIONS

Is U.S. inflation peaking after the fastest surge in over 40 years? The April consumer price index, due on Wednesday, will show.

March CPI came in at 8.5% on an annualized basis, as gasoline costs hit record highs. On a monthly basis, CPI jumped 1.2%, the biggest gain since September 2005.

Early forecasts are for a 0.2% monthly rise.

The March inflation surge probably sealed the Fed's 50 basis-point rate rise on May 4. The upcoming inflation print could sway expectations for how monetary policy will be adjusted going forward.

3/SPRING BREAKDOWN

China's anti-COVID lockdowns give every indication of stretching through the spring. Alongside the strain on tens of millions of people, damage to the economic outlook - in China and globally - is immense.

And markets' patience with limited policy support is wearing thin. Data on Monday shows China's exports growth hit a two-year low in April, highlighting that the world's second biggest economy is struggling under lockdowns.

Iron ore, oil and copper prices are already wavering. In the teeth of a steep U.S. hiking cycle, the slowdown also bodes ill for the wobbling Chinese yuan and in turn, for the foreigners who have placed their money in local markets.

4/ OIL AND PRIDE

Banning Russian oil imports seems to be a question of when, not if, for the European Union. The bloc is close to agreeing its sixth and fiercest package of sanctions against Moscow for invading Ukraine, according to the bloc's top diplomat.

The centerpiece of the package is a phased embargo on Russian oil, which makes up over a quarter of EU imports. The move will push European refineries into a race to find new crude suppliers and leave drivers with bigger bills at the pump at a time when the cost of living crisis is squeezing consumers globally.

Meanwhile Russia will hold the annual May 9 Victory Day in Moscow to mark the anniversary of the Soviet Union's triumph over Nazi Germany. The Kremlin dismissed speculation that President Vladimir Putin planned to declare war against Ukraine and a national mobilization on the highly symbolic day.

5/WAITING FOR MONEY

Global dealmaking is recovering after a first-quarter slump caused by Russia's invasion of Ukraine.

April M&A rose 30% from March to $387 billion, and included mega deals such as Elon Musk's $44 billion buyout of Twitter and a 58 billion-euro ($61.04 billion) bid by a consortium for Italian airport and motorway operator Atlantia.

Now the M&A market faces another challenge - funding.

Globally, more than $400 billion worth of deals have been announced since January but not completed, Refinitiv data shows.

M&A deals typically include 'staple financing', a pre-arranged package offered to potential purchasers to finance the acquisition. Once the deal is agreed, the buyer can syndicate the financing, inviting other banks to join. Or it can tap bond or equity markets.

But funding costs have spiraled since the deals were agreed. Average global corporate debt yields have soared 100 basis points since the Feb. 24 invasion, and by 150 bps on junk-rated U.S. companies, ICE BofA indexes show.

That's left some enormous deals hanging. They include Microsoft's purchase of Activision Blizzard, Musk's Twitter acquisition and an investment by Macquarie and the British Columbia Investment Management into Britain's National Grid. ($1 = 0.9502 euros)

(Compiled by Sujata Rao; editing by Tomasz Janowski)


ę Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
ACTIVISION BLIZZARD, INC. 0.09% 76.6818 Delayed Quote.0.08%
ATLANTIA SPA 0.00% 22.99 End-of-day quote.0.00%
AUSTRALIAN DOLLAR / CHINESE YUAN RENMINBI (AUD/CNY) -0.80% 4.777584 Delayed Quote.2.52%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) -0.47% 0.70755 Delayed Quote.4.32%
BRITISH POUND / CHINESE YUAN RENMINBI (GBP/CNY) -0.62% 8.35334 Delayed Quote.0.81%
BRITISH POUND / US DOLLAR (GBP/USD) -0.21% 1.2375 Delayed Quote.2.50%
CANADIAN DOLLAR / CHINESE YUAN RENMINBI (CAD/CNY) -0.73% 5.0564 Delayed Quote.0.02%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.32% 0.7486 Delayed Quote.1.72%
EURO / CHINESE YUAN RENMINBI (EUR/CNY) -0.51% 7.3347 Delayed Quote.-0.17%
EURO / US DOLLAR (EUR/USD) -0.03% 1.08671 Delayed Quote.1.57%
INDIAN RUPEE / CHINESE YUAN RENMINBI (INR/CNY) -0.47% 0.082832 Delayed Quote.-0.21%
INDIAN RUPEE / US DOLLAR (INR/USD) 0.04% 0.012276 Delayed Quote.1.48%
MACQUARIE GROUP LIMITED -0.26% 186.97 Delayed Quote.12.28%
MEXICO IPC -0.90% 54694.2 Real-time Quote.12.75%
MICROSOFT CORPORATION -1.86% 243.6094 Delayed Quote.3.48%
MSCI SINGAPORE (GDTR) 0.71% 5944.87 Real-time Quote.6.90%
NATIONAL GRID PLC 0.44% 1032.5 Delayed Quote.3.07%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.11% 0.64847 Delayed Quote.2.27%
S&P GSCI COPPER INDEX 2 -0.77% 651.6288 Real-time Quote.10.58%
S&P GSCI PETROLEUM INDEX -1.87% 306.4676 Real-time Quote.0.19%
S&P GSCI SILVER INDEX 0.58% 1160.4 Real-time Quote.-1.74%
TESLA, INC. -2.57% 173.7633 Delayed Quote.44.42%
UNITED STATES DOLLAR (B) / CHINESE YUAN IN HONG KONG (USD/CNH) -0.16% 6.74494 Delayed Quote.-2.38%
US DOLLAR / CHINESE YUAN RENMINBI (USD/CNY) -0.50% 6.748 Delayed Quote.-1.66%
US DOLLAR / RUSSIAN ROUBLE (USD/RUB) 1.73% 69.9126 Delayed Quote.-1.91%
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Analyst Recommendations on NATIONAL GRID PLC
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Financials
Sales 2023 18 981 M 23 501 M 23 501 M
Net income 2023 2 503 M 3 099 M 3 099 M
Net Debt 2023 42 141 M 52 177 M 52 177 M
P/E ratio 2023 15,1x
Yield 2023 5,37%
Capitalization 37 793 M 46 793 M 46 793 M
EV / Sales 2023 4,21x
EV / Sales 2024 4,17x
Nbr of Employees 29 292
Free-Float 93,0%
Chart NATIONAL GRID PLC
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Technical analysis trends NATIONAL GRID PLC
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Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 14
Last Close Price 1 028,00 GBX
Average target price 1 097,10 GBX
Spread / Average Target 6,72%
EPS Revisions
Managers and Directors
John Mark Pettigrew Chief Operating Officer-UK Gas Distribution
Andrew Jonathan Agg Chief Financial Officer & Executive Director
Paula Rosput Reynolds Chairman
Adriana Karaboutis Group Chief Information & Digital Officer
Lisa M. Lambert Chief Technology & Innovation Officer
Sector and Competitors
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ENGIE-2.93%34 174
PUBLIC SERVICE ENTERPRISE GROUP, INC.-1.04%30 251