Investor Relations Week: Positive outlook for small caps, Shell consolidates in UK and largest IPO in India collapses

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– Small caps should perform well in 2022 given their attractive valuations – especially relative to large caps – and strong fundamentals, according to a Barron’s article. “Small caps were cheap relative to large caps before trading sideways for seven months,” Keith Lerner, co-chief investment officer at Truist Advisory Services, said in the article. “They have become even cheaper, as their forward earnings estimates have risen more sharply than the S&P 500.”

The Wall Street Journal (paying) reported that Royal Dutch Shell was planning to consolidate its dual UK and Dutch structure and move its headquarters to London, which it said would help facilitate returns to shareholders and simplify the overhaul of its asset portfolio. The company said the end of its complex structure should also make it easier for investors to value the company at a time when it is committed to shifting to low-carbon energy. According to his plan, the company’s headquarters will be in the UK rather than The Hague, and the meetings of its CEO and board of directors will be moved to the UK.

– Ryanair has announced that it will withdraw from the London Stock Exchange (LSE) due to EU rules on airline ownership, reported the Financial Time (paying). The company has been listed on the LSE for 20 years, but EU rules state that airlines must be “owned and controlled” by nationals of the EU, Switzerland, Norway, Iceland or of Liechtenstein. The change became necessary after the UK left the EU.

– Duke Energy said it would add two directors backed by Elliott Management to its board as part of a deal, after the activist investment firm urged the utility to conduct a strategic review , Reuters reported. Elliott went public earlier this year demanding that Duke split into three companies. In response, Duke said there was no strategic logic to separate the company. He argued that such a move would impose additional costs on each entity that would negatively impact services and threaten Duke’s ability to pay dividends to its shareholders.

– The share price of India’s largest-ever IPO fell sharply on its first trading day, the BBC noted. Paytm, a digital payments platform, saw its share drop 27% after raising $ 2.5 billion in Mumbai. The company has backers including Ant and Softbank, but some investors have “expressed concerns about Paytm’s loss-making business model,” the article notes.

– Reuters reported that regulators have said banks around the world should put climate change financial risk controls at the heart of their boards and assess whether their capital cushions could cope with floods, fires and sudden drops in asset prices. The Basel Committee of Regulators of the G20 and Other Economies has proposed its first set of principles for dealing with climate-related risks as the debate continues over how far and how quickly regulators should go.

– The WSJ reported that, according to people familiar with the matter, the SEC is investigating allegations that Cassava Sciences, the sixth best-performing U.S. stock this year, manipulated research results for its investigational Alzheimer’s drug. Cassava revealed in a securities filing Monday that he was cooperating with government investigations, without naming an agency. Cassava said an investigation is not a sign that wrongdoing has taken place. An SEC spokesperson declined to comment.

– Reuters reported that Willis Towers Watson, which has come under pressure from activist investor Elliott Management, has appointed four new directors. Inga Beale, the former CEO of Lloyd’s of London, is one of the newly appointed directors, the insurance broker said, adding that Fumbi Chima, Michael Hammond and Michelle Swanback will also join the board. Willis further announced that the chairman of the board, Victor Ganzi, will not stand for re-election at the company’s AGM in 2022 after his current term expires.


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