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European shares fall as AI slowdown calls hits tech and oil surge weighs
European shares dropped on Monday, as technology stocks fell after leaders of top AI firms urged a'slower pace of development.' Meanwhile, another surge in oil prices dampened risk appetite. As of 0840 GMT the pan-European STOXX 600 index was down 0.3%, at 637.5, in choppy trade, with many major regional bourses trading downward. Technology shares were among the worst performers, with a 2% decline in line with their Asian and U.S. counterparts. Dario Amodei, CEO of Anthropic, called on AI companies on Saturday to slow down?the pace at which they advance their model capabilities because of fears about misuse. Benjamin Picton is a senior market strategist with Rabobank. He said: "That's an opinion that many of his tech peers?apparently hold. This puts founders in a unique position, not only agreeing but also favoring tighter regulations for their own businesses. Future growth will be throttled." Soitec, a French semiconductor company, was the biggest decliner in the STOXX with a 12.6% drop. Infineon, a German company, fell 7.6%. ASML, a Dutch firm, and ASMI, based in the Netherlands, both lost 5.2%. European miners declined 2.1% as they followed the weakness in commodity prices. London-listed Antofagasta fell 4%, while Germany's Aurubis dropped 3.2%. Healthcare stocks rose 2.2%, bucking the trend. GSK jumped 3.6% following the positive results of two lung cancer drugs. This added to the momentum in this sector. Oil stocks were not affected by the latest Houthi attacks in Saudi Arabia or Iranian attacks against ships in the Gulf, which compounded concerns about supply arising from a closed Saudi pipeline. Recent oil price spikes have brought inflation concerns to the forefront, further confirming expectations that central bankers?worldwide may increase interest rates in this year. The European economies are especially vulnerable to rising oil prices, as they rely heavily upon imports. The U.S. Federal Reserve will likely raise its main lending rate this week by at least 25 basis point -- a marked change from the split chance of a hike or a pause that was seen a week earlier. Last week, the European Central Bank raised rates. LSEG data shows that traders expect at least 25 bps more by year's end. The 10-year bond -- the benchmark for the region -- is at its highest level since August 2009. The centre-left opposition in Sweden looked to be on track to form the new government after preliminary results showed that it had a three-seat advantage over the ruling right-wing parties, with the majority of votes counted following Sunday's election.
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Nigerian billionaire Dangote launches Africa's largest share sale, the IPO of an oil refinery.
Aliko Dangote, a Nigerian billionaire, launched the largest ever share sale in Africa on Monday with his initial public offering (IPO) of oil refinery. This opened up ownership to retail investors while raising funds for the expansion of the refinery. The sale of 4.1 billion ordinary share at 525 Naira each began at 8am local time (0700 GMT), and will close on October 13th. The offer would raise 2,15 trillion naira (about $1.6 billion) if it were fully subscribed. However, this could rise to approximately $2.1 billion if oversubscribed. Chris Chijioke is a businessman based in Lagos, the commercial capital of Nigeria. He said that he will buy 2,000 shares because?the size and track record of Dangote as a successful businessman makes a strong argument. He expressed concern about the price of the shares, however. He said that the price offered would not be justified if the plans to double refinery capacity were delayed. "I personally believe it is overvalued," said he. The war in Iran has benefited refineries The refinery, built on the outskirts Lagos at a cost around $20 billion, has changed the fuel market in Nigeria since it began operations in 2024. The company supplies the majority of Nigeria's gasoline. It has also benefited from supply disruptions caused by the Iran War, which led to an increase in demand for Dangote jet fuel throughout Africa and Europe. Africa's richest person has advertised?the offer? to ordinary Nigerians who can take part by purchasing as little as 10 shares via fintech and digital investment platforms. Ibrahim Abubakar is a journalist who said he would buy approximately 2,850 shares, because he thought the refinery was "too large to fail". The plant currently processes 700,000 crude barrels per day. It hopes to reach 1.4 million barrels by 2029. According to calculations, the offer values the facility at $47 billion. Dangote has said he anticipates the IPO will be 3.7 times more popular than a July private placement that was 3.7-times oversubscribed.
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India approves the export of electricity to Nepal following deadly flood
India has approved the export of electricity to Nepal for 18 hours per day until December 31 after a devastating flood in the Himalayan nation last month destroyed about a 10th of its capacity. The deluge, caused by the collapsed glacier in Nepal and Tibet, killed more than 1,400 people and destroyed over 12 hydroelectric plants?in Nepal. More than?5,300 missing people include 900 workers from power stations. The ministry announced that it had approved the export of up to 654 Megawatts. It added that the amount of power exported from January will be reviewed in December. The approval would help Nepal meet its energy requirements during this difficult time and strengthen the long-standing and close energy cooperation between India & Nepal, it stated. The export of Nepalese hydropower, which provides?almost the entire electricity in Nepal, has been growing rapidly. The 'country' halted its power exports after the floods ravaged the Bagmati Province, which is the main hydropower producing region. It said that it would purchase electricity from India in the coming months to cover any domestic shortages. Last week, Nepali officials announced that they will ask wealthy countries and international agencies for financial assistance. They argued that they should contribute the $5 billion needed to begin the initial reconstruction.
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Kazimir, ECB's Kazimir, shifts his focus on gas prices and sees inflation risks rising
Peter Kazimir, a policymaker at the European Central Bank, said that euro zone inflation could be higher than projected and the growth of power and natural gas prices is a growing concern. The ECB increased interest rates on Thursday for a second time this year and also raised its inflation forecasts. This has fueled market speculation that there could be up to three rate increases in the next year. Kazimir is a policy hawk who has been outspoken in his calls for higher interest rates. However, unlike other colleagues, he did not call for a rate increase. He said policymakers should be open to new ideas and that the bank would act decisively when the evidence warranted it. Kazimir, Slovakia’s central bank head, said in a recent blog that his attention was now focused less on fuel and oil prices and more on the prices of gas and electricity. Food inflation, which is so important to perceptions and expectations of the future, is also expected to increase. Gas prices have reached a record high of four years, as European nations waited to fill their gas storages in the summer months hoping that the conflict with Iran would end. Gas storage is now being rushed to fill the gap left by historic levels. Prices are soaring, which will likely increase heating and electricity prices and cause inflation. The growth in food prices is unexpectedly low, but a "perfect storm" of factors including the European drought, El Nino weather phenomenon, and the soaring prices for diesel and fertiliser, which are key inputs to agriculture, will likely push prices up in the next few months. Kazimir stated that "the inflation risks are clearly skewed to the upside." The 'energy shock' has already lasted much longer than expected. But its full effects haven't yet filtered through to the economy. Financial markets expect a rate increase by the end the year, but the ECB's next meeting is on October 29.
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Solar Industries of India to purchase Omnia from South Africa for $1.36 Billion
India's?Solar Industries announced on Monday that its unit would acquire South Africa's?Omnia Holdings for?about $1.36billion in a?all cash?deal. The explosives and ammunition manufacturer is looking to expand their global mining business. Solar SA Investments is an indirect wholly owned subsidiary of Solar Industries. It will acquire all the outstanding shares of Johannesburg listed Omnia. This acquisition is subject to regulatory approvals and Omnia shareholders' approvals. African countries are stepping up their efforts to increase output and attract?investment in critical minerals. Zambia, a country rich in copper, is aiming to triple its production at a time when metal prices are rising. Solar expects that the expansion of its footprint will increase Africa's mining revenues by multiples from fiscal 2028. Solar Industries, based in Western India, manufactures industrial explosives, initiating systems, and other products for mining, construction, defence, and space industries. It operates more than?40 production facilities worldwide. Omnia is a company that provides services and products to the mining and agriculture industries. It operates in 23 countries, and has customers in over 40 other countries. The company reported revenue of $1.41 billion for the year ending March 31.
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European shares tempered as oil surge, tech slide weighs
On Monday,?European stocks were?subdued? as?technology shares fell? after executives from leading AI companies called on a slowdown in development? while another rise in oil prices? dampened the broader risk appetite? As of 0810 GMT the pan-European STOXX 600 was little changed, at 638.95, in choppy trading, with most major regional exchanges trading lower. Anthropic CEO Dario Amedei called for 'AI companies to slow down the rate at which model capabilities are advanced due to concerns of misuse. Shares in technology firms fell 1.4% in line with weakness among Asian peers. Infineon, a German company, lost 5.8% of its value, while ASML, a Dutch firm, and ASMI, based in the Netherlands, each suffered losses of 4.4% and 5%. Oil prices were up more than 2% as a result of the Houthi attacks on Saudi Arabia, and Iranian attacks against ships in the Gulf. This exacerbated supply concerns after the closure of an important Saudi oil pipeline. With a 0.4% increase, the European energy sector was one of the brightest spots. The focus now shifts to the U.S. Federal Reserve and its upcoming?policies decision. Traders are increasingly betting on a rate increase of 25 basis points. Last week, the European Central Bank raised interest rates.
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What role does Aliko Dangote’s oil refinery play in his conglomerate business?
Nigeria's Dangote Group sells a 3,3% stake in the 700,000 barrels per day?oil refining plant to the public in what will be the largest such transaction on the continent. Answers and questions regarding the business conglomerate owned by Africa’s richest man, Aliko?Dangote. What is the size of Dangotes' business group? The 69-year-old entrepreneur is the owner of Dangote Industries Limited. This industrial group, which produces cement, sugar, and salt, is one of Africa's biggest. The company is also involved in the refining of crude oil, as well as other activities such as the production and distribution of petrochemicals, fertilisers, and power. Dangote Industries is his primary holding vehicle for the majority of operating companies which are privately owned. This changes with the listing the "refinery complex" located near Lagos. Which parts of the group are most important? Dangote Cement, Africa's leading cement manufacturer, has a capacity of 51.8 millions metric tons per year. Nigeria is responsible for 35.3 millions tons of this capacity. The company is also active in Cameroon and other countries such as the Congo Republic, Ivory Coast (Ivory Coast), Ethiopia, Ghana Senegal Sierra Leone South Africa Tanzania Zambia. It aims to increase total?capacity by 2030 to 80 million tons. The group's most ambitious expansion is in its refining division, the newest business. The refinery started processing crude oil in 2024. It produces petrol, jet fuel and liquefied petroleum gases, as well as by-products of chemicals such polypropylene. An adjacent plant, which produces fertiliser, has a capacity of 3,000,000 tons per year of urea and ammonia. It supplies Nigeria as well as export markets such Brazil, India Mexico and the United States. Sugar, salt seasonings, and other food items are among the group's consumer products. These activities are supported by the Dangote Group's storage facilities, pipelines, power plants and marine terminals. How did Dangote build the group? Dangote’s strategy is based on the import substitution, which means offering locally produced goods for Nigerians to replace those they have traditionally purchased from overseas. Cement was Nigeria's first big success. The investments in plants, quarries, and logistics have helped Nigeria to become a regional supplier. Dangote then applied the same strategy in his latest ventures in?refining, petrochemicals and fertilisers to reduce reliance on imports and serve the domestic and international markets. The group's investments are aimed at controlling costs and ensuring supplies. However, these investments come with a large capital expenditure and risks, such as construction delays and significant debt costs.
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Nigerian billionaire Dangote launches Africa's largest share sale, the IPO of an oil refinery.
Aliko Dangote, the Nigerian billionaire who owns the oil refinery in question, launched the 'public offering' of the company on Monday. The sale opened up the plant to retail investors and raised money for the expansion. The offer to buy 4.1 billion ordinary shares for 525 Naira each began at 8am local time (0700 GMT), and will end on October 13th. The offer would have raised 2.15 trillion Naira ($1.6 billion) if fully subscribed. However, this could increase to $2.1 billion should the offer be?oversubscribed' and the company choose to use the greenshoe option in order to issue additional?shares. The refinery, built at a cost around $20 billion in the suburbs of Lagos has changed the fuel market of Nigeria since its start-up operations in 2024. Dangote supplies the majority of Nigeria's gasoline. The Iran War has also benefited Dangote financially, as it increased demand for Dangote jet fuel in Africa and Europe. Africa's richest person has made the offer to Nigerians who can buy as little as 10 shares via fintech and digital investment platforms. There is no restriction on who can buy these shares. "We want everyone... to own a share," Dangote stated at a signing event last week. The refinery currently processes 700,000 barrels of crude oil per day. It hopes to increase that to 1.4 millions barrels by the year 2029. Calculations show that the offer values this plant at $47 billion. Dangote said he expected interest in the IPO?to mirror a July private placement that was 3.7-times oversubscribed.
Asia markets rise as Fed comments and jobs data indicate rate cuts
Asian stocks rose in the early hours of trading on Thursday, as Federal Reserve officials' dovish remarks soothed investor nerves during a period when global growth concerns and bond market sell-offs were at an all-time high.
The Nikkei rose by 1.2%, and Australian shares gained 0.8% after their largest one-day drop since April.
MSCI's broadest Asia-Pacific share index outside Japan, which includes Japan and Australia, lost early gains before falling 0.2% in the last few days. Losses in China were a major factor. Bloomberg News reported that financial regulators were preparing cooling measures to cool the market. The Shanghai Composite dropped 1.6%, and was headed for a third consecutive day of declines.
The financial markets started September with a gloomy mood. A sell-off of longer-dated debts has dampened investor confidence in advance of Friday's crucial non-farm payrolls in the United States. A 30-year auction of Japanese government bonds will be held later today to test the appetite of global debt markets for super-long fixed income.
The bond market sold-off overnight, but the concern about the fiscal health in major economies, from Japan to Britain and United States, kept borrowing costs for long-term loans near their multi-year-highs.
Investors received a boost in confidence after Federal Reserve officials including Governor Christopher Waller expressed their support for rate reductions in the months to come.
Stephen Miran said that he would also work to maintain the independence of the Federal Reserve Board. He was selected by President Donald Trump to fill a vacant seat.
U.S. Stock Futures rose 0.1%, as investors reacted positively to the Fed's dovish remarks and bought beaten-down stocks.
Tony Sycamore is a market analyst with IG, Sydney. He said: "We had one or two weak days but dip-buyers stepped in." Many people see this September weakness as a good opportunity to buy, with the economy still growing strongly. "This is an excellent backdrop for equity markets."
The latest "JOLTS", or Job Openings Report, released on Wednesday showed that job openings were lower than expected. This boosted market bets for a rate reduction at the Fed meeting scheduled later in the month.
The Federal Reserve "Beige Book", which was released in September, painted a mixed image of the U.S. economy. This appeared to confirm the concerns of monetary policymakers. Analysts from ING described the report's tone as "bleak," and said that it "was littered with tariff warnings about prices."
According to CME Group’s FedWatch tool, traders are pricing in a 96% probability that the Fed will cut interest rates during its September meeting.
The yield on the benchmark 10-year Treasury note rose to 4,2226% from its U.S. closing of 4.211% Wednesday. The two-year rate, which increases with traders' expectation of higher Fed Funds rates, reached 3.6187%, compared to a U.S. closing of 3.612%.
The dollar was unchanged against the yen, at 148.13. It remained within the trading range that it has been in since August began.
The euro currency fell 0.1% to $1.1652, whereas the dollar index (which tracks the greenback's value against other major trading partners) rose 0.1% to 98.217.
Brent crude fell 0.5% on the commodities market to $67.29 per barrel.
Gold spot prices fell 0.8% to $3529.94 an ounce, after reaching a record high on Wednesday.
(source: Reuters)