Oil Prices Hit as Trump Signals Increasing Support for More Drilling

KUALA LUMPUR (Nov 13): Malaysia’s cross-border renewable energy (RE) auction for Singapore’s energy importer, under the Energy Exchange Malaysia (Enegem), will begin by year end, Deputy Prime Minister Datuk Seri Fadillah Yusof said.

He explained that through efforts to integrate regional power grids, the country aims to strengthen energy security across Asean member states.

“Further to the regional integrated grid, it can also serve as an economic catalyst in fostering regional cooperation through cross-border RE trade.

“By sharing excess energy, the country can reduce reliance on fossil fuels while building an integrated Asean energy infrastructure,” he said in his opening address at the 2nd Sustainability Environment Asia 2024.

Fadillah, who is also the energy transition and water transformation minister, confirmed that coal-fired generation will be gradually phased out, with no new coal power plants to be established.

He cited the International Energy Agency’s clear stance that reducing coal dependency is crucial to limiting global warming, and stressed Malaysia’s commitment to this objective.

“We will continue to enhance grid flexibility by investing in and developing smart grids, digitising the power system, and expanding energy storage systems.

“By 2035, we aim to increase grid flexibility by 20%, enabling greater integration of RE sources,” he added.

Under the National Energy Transition Roadmap, the government aims to raise RE’s contribution to Malaysia’s installed power capacity to 70% by 2050, up from the current 28%.

Meanwhile, Fadillah outlined plans to restructure Malaysia’s water services over the next decade, in collaboration with the National Water Services Commission (Span) and the Malaysian Water Association.

“As of 2023, 97.1% of urban and rural areas had access to water supply, while sewerage services covered 86.9% of major cities.

“Malaysia aims for 98% rural clean water coverage and a 31% non-revenue water rate by 2025 through integrated water resource management,” he said.

Malaysia remains committed to fostering a healthy environment, driving economic prosperity, and improving the quality of life for its people and future generations, he added.

As the country strives towards its net zero carbon goal by 2050, it is vital to capitalise on every opportunity to navigate a sustainable transformation and embrace a circular economy, said the deputy prime minister.

“I invite businesses to partner with the government and explore all options for collaboration,” he added.

Source: Theedgemarkets

Source: AP

Is Shopify stock a buy?

The e-commerce platform has had six straight quarters of 25% year-over-year revenue growth.

Shopify (NYSE: SHOP) stock was the biggest movers on Tuesday, skyrocketing more than 25% on the day to about $113 per share.

The e-commerce platform generated $2.16 billion in revenue in the quarter, up 26% year-over-year and ahead of analysts’ estimates of $2.11 billion. It was the sixth straight quarter with greater than 25% revenue growth.

Net income rose 15% to $828 million, but the preferred non-GAAP adjusted earnings spiked 99% to $344 million, or 64 cents per share. That crushed estimates of 27 cents per share. The adjusted earnings exclude the impact of equity investments in third parties, which are not relevant to the fundamentals of the business or indicative of operating earnings.

With today’s meteoric rise, Shopify stock is up about 53% year-to-date to around $113 per share.

GMV jumps 24%

The strong Q3 earnings were driven by robust activity on its shopping platform, combined with sound expense management.

Specifically, Shopify saw a 24% rise in gross merchandise volume, or GMV, to $69.7 billion, which beat estimates of $67.5 billion. The GMV represents the dollar value of orders facilitated through the Shopify platform. Further, its monthly recurring revenue (MRR), which is the number of merchants multiplied by the average monthly subscription plan fee, jumped 28% year-over-year to $175 million.

Overall, Shopify’s subscription solutions revenue climbed 25% to $610 million in the quarter while its merchant solutions arm saw revenue increase 26% to $1.55 billion, which beat estimates of $1.52 billion.

In addition, Shopify was able to keep expenses in check, as they rose just 7% compared to the third quarter of 2023, with general and administrative expenses actually falling 17% to $114 million.

This enabled Shopify to boost its free cash flow by 52% to $421 million, as it gained in each of the first three quarters this year. The free cash flow margin rose to 19%, from 16% in the same quarter a year ago. This is an important measure as it allows to invest in both operations and future growth.

“Q3 was outstanding, further establishing Shopify as a leader in powering commerce anywhere, anytime. Our unified commerce platform is becoming the go-to choice for merchants of all sizes,” Harley Finkelstein, president of Shopify, said. “As the busiest shopping season of the year for our merchants’ approaches, they trust Shopify to provide the tools, unmatched speed, and reliability to maximize their success.”

Is Shopify stock a good buy?

Investors were not only impressed by the strong growth; they were also heartened by Shopify’s Q4 outlook.

The firm anticipates another quarter of robust revenue growth, targeting a mid-to-high-twenties percentage rate spike in revenue in Q4.

Gross profit, which climbed 24% to $1.12 billion last quarter, is expected to see a similar growth rate in Q4 while operating expenses, as a percentage of revenue, are targeted at 32% to 33%. This would be lower than the approximately 38% rate last quarter.

Shopify earned some price target upgrades after Q3 results, including Evercore, which boosted it by $45 to $125 per share. In addition, Roth MKM boosted the target to $135 per share. That would represent a 13% to 22% increase in the share price.

But prior to the Q3 earnings release, Shopify had a median target of $80 per share, which would suggest a 29% drop.

The concern is the P/E ratio, which shot up to 98, with a forward P/E of 68. While it has enjoyed robust and sustained growth, that seems a bit too high and should be monitored. 

Source: FXSTREET

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(Nov 13): Billionaire Elon Musk and entrepreneur Vivek Ramaswamy will lead a new Department of Government Efficiency tasked to “dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure federal agencies”, US President-elect Donald Trump announced on Tuesday.

On the campaign trail, Trump said the government efficiency effort would develop a plan to eliminate “fraud and improper payments”, conducting a “complete financial and performance audit” of the federal government. On Tuesday, Trump said the panel would partner with the White House’s Office of Management and Budget and said their work will conclude no later than July 4, 2026 — the nation’s 250th anniversary.

The structure may allow Musk to avoid resigning from his companies including Tesla Inc, the world’s largest electric vehicle manufacturer, and SpaceX, which dominates the worldwide rocket launch market — and federal conflict-of-interest rules that could have mandated divestiture. 

But it’s not clear what the size or structure will be, or how Musk and Ramaswamy will drive the dramatic overhaul of the government they have promised. The effort, which abbreviates to 'Doge', is a play on one of Musk’s favorite internet memes, and Musk has been an advocate of a the digital token Dogecoin. In a post to his social media network X, Musk suggested the government efficiency panel would offer merch.

Musk predicted he could cut at least US$2 trillion (RM8.90 trillion) from the US federal budget at Trump’s rally last month at Madison Square Garden, though that would exceed the amount Congress spends annually on government agency operations, including defense. It would likely require making significant cuts to popular entitlement programs such as Social Security, Medicare, Medicaid and veterans’ benefits.

Last fiscal year, the government spent more than US$6.75 trillion, with more than US$5.3 trillion of that coming from Social Security, healthcare, defence and veterans’ benefits — all of which are politically fraught and notoriously difficult to convince Congress to cut — as well as interest on the debt.

“This will send shockwaves through the system, and anyone involved in Government waste, which is a lot of people,” Musk said on Tuesday in a statement provided by the Trump transition effort.

Musk, 53, saw his net worth top US$300 billion shortly after the election — the first time he’d surpassed that mark in almost three years. He is the only person to ever have a fortune in excess of US$300 billion, according to Bloomberg’s wealth index. Tesla shares, which were trading about 1.5% lower in the after-hours session before Trump’s announcement, pared losses slightly after the news.

Musk is likely to serve as a special government employee, the formal designation for individuals outside of government brought in for short periods to lend their expertise.Ramaswamy, an Ohio businessman, mounted a bid for the GOP nomination himself but largely echoed and amplified Trump’s position.

Prominent allies

During his run, Ramaswamy, 39, was loathe to criticise Trump, praising the Republican standard-bearer and endorsing many of the policies the incoming president has espoused, including scaling back the size of the federal government and pulling back from foreign alliances.

Ramaswamy also backed ending US aid to Ukraine, called at one point for a wall along the US-Canada border to halt the spread of fentanyl and has been an advocate for the cryptocurrency industry, calling for rolling back regulations and implementing drastic cuts to the Securities and Exchange Commission.

His staunch support for Trump, fuelled by some breakout moments in primary debates that saw him attack some of the president-elect’s top rivals for the nomination, helped him build his standing among conservative voters. Ramaswamy would go on to be a fervent surrogate for the president-elect, earning Trump’s praise. 

While Trump ruled him out as a running mate, he weighed him as a possible Cabinet pick as early as March, according to people familiar with the matter at the time.

On the trail, Trump praised Ramaswamy as “smart”, and expressed hope that he would be part of a second-term administration. 

“We can put him in charge of one of these big monsters, and he will do a better job than anybody you can think of,” Trump said at a campaign rally in October.

Source: Theedgemarkets