Utilities Sector

• UST yields were largely stable on Friday, after long-dated yields erased 3-4 bps of increases during the day.
• The UST curve flattened marginally, with the yield on the 2Y UST rising 1 bp to 3.92%, while the yield on the 10Y UST declined 1 bp to 4.39%.
• The S&P 500 rose for the fifth straight day, and was up 0.4% at 6,389. 

• NextEra Energy, Inc.’s second quarter 2025 earnings presented a mixed picture of the company’s current financial performance and strategic positioning.
• From a financial perspective, the company delivered robust results, with adjusted earnings per share (EPS) increasing by 9.4% year-over-year for the quarter and 9.1% for the first half of 2025.
• This growth was mainly driven by strong performances at Florida Power & Light Company (FPL) and NextEra Energy Resources, as well as strategic infrastructure investment, which appears to be paying dividends.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: China Water Affairs, Rakuten Group, Nickel Industries
• UST yields declined for a third straight day, albeit there were few macro catalysts. The yield on the 2Y and 10Y UST declined 3 bps each to 3.83% and 4.35%, respectively. Equities were mixed, as tech stocks retreated ahead of their earnings releases next week.
• The S&P 500 rose 0.1% to 6,310, while the Nasdaq declined 0.4% to 20,893.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Adani Energy Solutions, Vedanta Resources, JSW Steel
• UST yields declined on Friday, led by the front end, after Fed Governor Christopher Waller reiterated his case for a July rate cut and given lower-than-expected inflation projections in the University of Michigan survey.
• The yield on the 2Y UST and 10Y UST fell 4 bps to 3.87% and 4.42%, respectively. Equities were steady at record high levels, with the S&P 500 and Nasdaq flat at 6,297 and 20,896, respectively.

• I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: Mayne Pharma (MYX AU), ENN Energy (2688 HK), Yichang HEC Changjiang Pharma (1558 HK), Insignia Financial (IFL AU), Santos Ltd (STO AU), Smart Share Global (EM US).
• Lowest spreads: Bright Smart Securities (1428 HK), Humm Group (HUM AU), New World Resources (NWC AU), Hainan Meilan International Airport (357 HK), Avjennings Ltd (AVJ AU), ZEEKR (ZK US). 

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Adani Green Energy, Yanlord Land, China Vanke
• The UST curve bear-steepened marginally yesterday, in line with a steepening in the JGB curve and amid an absence of macro news. The yield on the 2Y UST rose 1 bp to 3.90%, while the yield on the 10Y UST was up 2 bps at 4.44%.
• Equities shrugged off earlier losses to end the day marginally higher, after US President Donald Trump told reporters there could be trade talks, including with Europe. The S&P 500 rose 0.1% to 6,269, while the Nasdaq was up 0.3% at 20,640. The market focus today is on the US CPI for June.

• AES Corp., a major player in renewable and utility power with deep ties to Big Tech, is now exploring strategic options including a potential sale, according to reports.
• The Arlington, Virginia-based company has caught the eye of infrastructure giants such as Brookfield Asset Management and BlackRock’s Global Infrastructure Partners (GIP) after its stock plummeted nearly 50% over the past two years.
• The stock rebounded sharply—up nearly 20% in a day—amid reports of the takeover interest, bringing its market cap to around $9.4 billion, though its enterprise value still hovers around $40 billion due to high leverage.

• ENG is a large utility company with a history dating back 150 years, formed from Gaz de France, Suez, and international influences
• The company plans to focus on developing renewable energy production and infrastructure, with a goal of 95 gigawatts from renewables and batteries by 2030
• The CEO faced challenges during a gas supply cut-off from Russia, highlighting the importance of security, financial exposure, and affordability for customers

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Adds 600 MW operational capacity in Maharashtra, acquired via CIRP at ₹6.67 crore/MW.
• Supports Adani’s goal to reach 30,670 MW by FY2030 through scale-driven, base-load expansion.
• Stock trades at ~12x forward P/E—undervalued given 70% capacity growth and strong operating leverage.

• CEWL plans a CAPEX of HKD1.7 billion to HKD2.0 billion in 2025 for project construction and growth.
• CEWL maintained cash and cash equivalents of HK$1.85 billion as of 31 December 2024, ensuring strong liquidity.
• CEWL’s EBITDA fell by 11% to HK$2.20 billion in FY2024 due to one-time events and exchange rate fluctuations.

• AH premia flat among liquid names but “beautiful skew” of wide premia converging more than narrow premia continues bigly. It has paid well to be long wide H discounts.
• Last week I said, “It has paid to be long the H on those H/A pairs with the biggest H discounts. I would continue to ride that trend.” Ride on.
• The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers. Technical issue delayed this week’s Monitor.

• Acciona SA now owns 90.03% of Acciona Energías Renovables, enabling a squeeze-out and delisting. A likely offer in the €22.60–24.50 range creates a near-term arbitrage opportunity.
• At 9.0x EV/NTM EBITDA, ANE trades below peer valuations. A delisting would be strategically accretive for Acciona, unlocking group simplification, full cash flow control, and rerating potential.
• Acciona trades at a 7.6% discount to its SOTP. I recommend BUY on both Acciona SA and ANE, with the latter offering 2–10% upside in a low-risk setup.