E.ON (EOAN.XE) shares swing briefly into positive territory in an
overall negative market. E.ON's move follows approval by the European
Parliament of backloading CO2 emission permits, which should benefit the German
company, a trader says. Backloading [delayed auctioning of emission rights] is
expected to reduce supply and increase prices of CO2 allowances, which in turn
is meant to incentivize investment in "cleaner" power generation
technologies.
E.ON has heavy exposure to gas-fired power generation, which
emits less CO2 than coal plants. Utility shares are generally oversold,
hovering at around all-time-lows, the trader says, with low power prices
weighing earnings prospects. E.ON shares dipping back now, down 0.9% at EUR12.07.