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Malaysia's Petronas will pay a $4.7 billion government dividend in 2026 - the lowest amount in nine years
Petroliam Nasional Bhd, the state-owned energy company in Malaysia, is expected to pay a dividend of 20 billion Ringgit ($4.74billion) to the Malaysian government. According to a report released by the government on Friday, next year will be the lowest payout in nine years. Petronas distributed 32 billion ringgit to the government in dividends last year. The lowest payouts in the past 10 years were 16 billion ringgit both in 2016 and 2017. This drop highlighted Malaysia's need for a reduction in its dependence on Petronas. The company is a major contributor to government coffers, but also vulnerable to volatile oil price fluctuations. Petronas reported lower profits and revenue for the first six months of the year in August, which is in line with the falling benchmark prices. Malaysia's nontax revenue will decline by 9.9%, to 72.7 billion Ringgit, as a result of lower dividend payments from Petronas. This was revealed in the fiscal outlook report that accompanied the 2026 budget. In 2026, petroleum-related revenues will fall to 43 billion Ringgit while non-petroleum revenues will increase by 8.1% and reach 300.1 billion Ringgit. According to the government's economic outlook report, Brent crude oil is expected to average between $60 and $65. per barrel in 2019. It said that the natural gas sector is also expected to decrease due to lower production on Peninsular Malaysia and Sabah, as well as a weakening of demand from major importers like Japan, China, and South Korea. The report stated that "Overall natural gas production will be slower despite the planned start of several new projects." A decline in crude oil and condensate production is expected to affect the subsector next year.
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Trustee at Tata's charity arm in India calls internal disputes 'unprecedented.'
The Tata Group charity arm's trustee has called the decision to remove him from the board of its $180 billion business empire "unprecedented". He said it signals a new era in the largest boardroom rift that India Inc. has seen in years. A year after Ratan Tata's death, the discontent at Tata Trusts has fueled fears that a public spat in 2016 between Tata Sons and the charity could repeat itself, damaging the reputation of India’s most respected conglomerate. Tata Trusts owns a 66% stake in Tata Sons. Tata Sons oversees 30 companies in various industries, from consumer goods and airlines to global brands such as Jaguar Land Rover. Tata Consultancy Services, and Tata Motors. Reports have revealed that the disagreements in recent weeks concern the trustees who should sit on the Tata Sons board, the general direction of the business taken by the group, and the management of the planned exit of the minority shareholder Shapoorji Pallonji. In September, the trustees voted to not re-appoint Vijay Singh as Vice Chairman to the Board of Tata Sons, revealing a dispute between senior members of this powerful charity, led by Ratan Tata’s half-brother Noel Tata. Singh, an insider who has traditionally avoided the spotlight at Tata Trusts, told the Indian Express that the idea of voting in any Tata Trusts matter was unprecedented. "Ratan Tata believed that consensus and unanimity were essential to any issue. We may be in a new era. He said that four trustees voted to remove Singh from the Tata Sons Board for reasons which did not seem to be explained. Tata Trusts & Tata Sons did not reply to email seeking comment on Friday. Singh didn't respond to texts. In a rare intervention, two senior Indian Ministers urged Tata Trusts this week to resolve internal boardroom conflicts. Sources with direct knowledge about the problems at Tata trusts have confirmed that two factions exist at the charity's arm, the one headed by Noel Tata, and the other led by Mehli mistry, a trustee. Source spoke under anonymity because the matter was private. It is unclear how the different factions will align on the issue at hand. Mehli Mistry was the cousin of Cyrus Mistry who died in 2022. Their family company Shapoorji Pallonji owns an 18% stake in Tata Sons. (Reporting and editing by Clarence Fernandez; Aditya K. Kalra)
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Dalian Iron Ore gains on stronger steel prices outlook
Iron ore futures prices rose on Friday and posted gains for the week, boosted by expectations of higher steel prices and improving market fundamentals. The January contract for iron ore most traded on China's Dalian Commodity Exchange was up 1.02% to 795 yuan (111.56 dollars) per metric ton. The contract closed the week 1.6% up. As of 0217 GMT the benchmark October iron ore traded on the Singapore Exchange was 0.75% higher at $105.7 per ton. It is expected to gain 1.6% in a week. According to the chief analyst of consultancy Mysteel, after declining steadily for the past two month, Chinese steel prices will rise in October due to improved market fundamentals, and the anticipated implementation by the central government of stronger economic stimuli policies. Hexun Futures, a Chinese broker, says that despite stockpiling ore before the Golden Week holiday period, transportation restrictions prevent steel mills from keeping adequate inventories of raw materials, and could force them reduce production. One of Russia's top steelmakers estimates that the demand for metals has dropped by as much as 15%. Russia will be the fifth largest steel producer in the world by 2024, with a production of 71 million tonnes. The average amount spent by Chinese tourists during the Golden Week holiday has fallen to its lowest level in three years, as the weak economy continues to affect the second largest economy of the world. The U.S. Trade Policy, extreme weather conditions, intense competition on domestic markets and persistent weakness in property are all factors that contribute to the downturn. Coking coal and coke, which are used to make steel, have both gained in value, rising by 1.22% and 1.86 percent, respectively. The benchmarks for steel on the Shanghai Futures Exchange are mixed. The price of wire rod was unchanged, but rebar and hot-rolled coil rose by 0.37%. Stainless steel fell 0.16%.
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ASIA GOLD - Festive buying boosts demand in India, while China's post-holiday trading is muted
The physical gold demand in India remained steady this week, despite the record-breaking price rise, as jewellers, investors, and collectors bought bullion in anticipation of important festivals that will take place later in this month. In China, however, buying was subdued due to higher exchange rates in the post-holiday market. Hong Kong residents sold everything, from gold bars and rings to cash out on the record price rise. Gold prices in the spot market rose to $4,000 an ounce on Wednesday for the first time, due to a combination of geopolitical, economic and rate-cutting expectations. This month, Indians will celebrate Dhanteras (Diwali), a festival during which purchasing gold is considered auspicious. These are also the busiest days for buying bullion in the country. Indian dealers quoted a premium The premium is now up to $15 an ounce, including 6% import duties and 3% sales taxes, compared to the $9 last week. The investment demand is very strong at the moment. Investors paid extra for record-high prices because they expected prices to continue rising. On Friday, domestic gold prices traded at around 121,000 rupees per 10 grams ($1,364.10) after reaching a record high earlier in the week of 123677 rupees. A New Delhi-based jeweller said that retail jewellery demand was still low, but they hoped it would pick up next week, with Diwali just around the corner. After a long holiday the demand in China, the world's largest consumer of gold, was weak. Discounts between $48 and $60 per ounce were offered to lure buyers. Gold bars and coins are popular investments, but the demand for jewellery is low. "People are interested in buying, but are waiting for the prices to drop," said Peter Fung. In Hong Kong, gold In Singapore, the price ranged from a discount up to $1. Gold traded from a discount between $0.5 and a premium of 1.30 dollars. In Japan, bullion The price was equal to or higher than spot prices by $1 per ounce.
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Gold gains for the eighth consecutive week on strong demand for safe-havens
Gold prices held firm below the critical $4,000 per ounce level on Friday. This was set to be an eighth weekly gain. The gains were boosted by geopolitical tensions, economic uncertainty, and expectations for further U.S. interest rate cuts. As of 0637 GMT spot gold was unchanged at $3,974.99 an ounce. However, it has gained 2.2% this week. U.S. Gold Futures for December Delivery rose 0.3% to $3985.8. Silver increased 1.6%, to $49.89 an ounce. It had previously reached a record of $51.22 per ounce. The options markets showed a rise of volatility and downside protection for the gold price during this rally's final stages. It seems like a good time for gold bulls book some profits. "I expect that any pullback will be limited," said City Index senior analyst Matt Simpson. Israel's government approved a ceasefire agreement with Hamas, paving the way for the suspension of hostilities within Gaza in 24 hours, and the release of Israeli hostages within 72 hours. Israeli attacks on the besieged Gaza enclave continue. ANZ analysts stated in a report that a slowing economy, rising inflation, a changing geopolitical environment, and diversification away from U.S. investments and the dollar would keep the investment demand for gold and central bank purchases strong. Renewed rate cuts will also help the metal. On Wednesday, the price of gold surpassed $4,000 an ounce for a first time, hitting a new record high at $4,059.05. This non-yielding investment, which is traditionally used as a hedge in times of geopolitical or economic uncertainty, gained 52% so far this year. The rally was fueled by geopolitical tensions, central bank purchases, increasing exchange-traded fund inflows and expectations of U.S. interest rate cuts. The minutes of the September Federal Reserve meeting were released on Wednesday. They showed that officials believed the risks in the job market justified a rate reduction, but they remained cautious because inflation was persistent. In September, the Fed began its cycle of rate cuts with a reduction of 25 basis points. The traders expect a 25-bp rate cut in both October and December. There is a 95% chance of each. Palladium fell 2%, to $1386.24, while platinum slipped 1.4%, to $1596.0. (Reporting by Ishaan Arora in Bengaluru; Editing by Rashmi Aich, Subhranshu Sahu and Sherry Jacob-Phillips)
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As economic and political uncertainty drags, Japan and China markets dent Asia
Investor confidence was shattered by escalating U.S. China economic tensions, and the uncertainty surrounding political developments in Japan. Commodities also took a break after their recent surge. The broadest MSCI index of Asia-Pacific stocks outside Japan fluctuated in gains and losses. It was down by 0.4% last week as gains made during the previous week were erased when U.S. stock markets ended their session with modest declines. Hong Kong's shares fell the most by 1.8%. The Australian market, however, slipped 0.1%, despite volatile commodity markets. Stocks in South Korea surged by 1.4%, continuing the gains of the region's top-performing index. The Nikkei index fell 1% and the yen gained 0.2% versus the dollar. This is a slight easing after the Nikkei reached a record closing high on Friday. NHK, the public broadcaster in Japan, reported that the Komeito Party will be leaving the coalition of the Liberal Democratic Party led by the LDP. In a recent research report, analysts at Alpine Macro stated that "the political and economic conditions of Japan today are very different from 2012 when Abenomics first began." The lack of a majority in the parliamentary, the absence of an independent BOJ and the anger among voters over higher inflation should stop Takaichi's aggressive reflationary policy. U.S. Stock Futures have reached a bottom in Asia. The earnings season for the 3rd quarter will begin on Wall Street this week. S&P 500 E-minis rose 0.1% while the U.S. Dollar Index, which measures greenback strength against a basket six currencies, edged down 0.1%. It was near a 2-month high of 99.37. The CSI 300 index fell 1.4% on Friday after Beijing tightened its control over rare earths exports ahead of the talks between Donald Trump and Xi Jinping. Financial Times reported that Beijing has also increased enforcement of its chip-import restrictions in order to reduce the dependence of domestic technology companies on U.S. goods such as Nvidia artificial intelligence processors. Could not verify the report immediately. The yield on the benchmark 10 year Treasury bond dropped to 4,1247% from its U.S. closing of 4,148% on Thursday. FedWatch, a tool of the CME Group, shows that traders' expectations remain strong. Fed funds futures are pricing in a 94.6% chance of a rate cut by 25 basis points. The regional markets are on track to have one of the best years they've had in a decade. They outpace their U.S. counterparts, as President Trump’s economic policies and tariffs trigger a surge of order across the region. In a recent research report, HSBC's global head of marketing strategy Murat Ulgen stated that despite the strong performance and improvement in sentiment this year, positioning is still light and flows have just begun to return. TAKAICHI WALKS a Tightrope Japan's TOPIX fell 1.9%, after Finance Minister Katsunobu Kato expressed concern over "one-sided and rapid movements in the foreign exchange markets" which have caused the yen to fall 3.5% against the dollar following Takaichi’s election on the weekend. The data earlier in the morning showed that wholesale prices had risen 2.7% over the past year, indicating a persistent cost pressure. This will cause the markets to be prepared for a rate hike from the Bank of Japan on the 30th of October. After Takaichi stated on Thursday that Japan's central banks is responsible for setting the monetary policy, but any decisions it makes must be in line with the government's goals. However, traders say that her promise to reassert the government's control over the central banks may be tempered by a weakening yen as well as domestic political concerns. In a recent research report, Bank of America analysts wrote that the market expects Japan to adopt fiscal expansionary policies. "However there is considerable uncertainty about the details of the policies under discussion, as well the extent of fiscal expansion." Focus on Commodities Gold fell 0.1% to $3.970.43, continuing the declines that began after a four-day streak of gains on Thursday. This was shortly after the metal had breached the $4,000 barrier for the first and the excitement spilled over into other precious materials. Spot silver rose 1.7% to $49.94. It retested the $50 mark, after crossing the boundary for first time on Friday. Brent crude fell 0.5% on the energy markets to $64.92 a barrel after Israel's government approved a ceasefire Friday with Hamas, clearing the path for the suspension of hostilities in Gaza and the release of Israeli hostages there within 24 hours.
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Boluarte, Peru's vice president, rose to become the embattled leader
Dina Boluarte, the Peruvian president's tenure had been marked by turmoil since the moment she took power. However, the unpopular leader managed to hold on for many years before being removed by Congress early Friday morning. Boluarte is a 63 year old mother of two who was born in a village located in the Apurimac mountains. She was elected vice president in 2021. In late 2022, after former president Pedro Castillo had been arrested for trying to dissolve Congress and was removed from office, Boluarte became Peru's very first woman head of state. Castillo, a leader who wore a cowboy hat and was popular among Peru's rural and indigenous populations, was arrested and there were protests all over the country. The government's heavy-handed response to the unrest led to the deaths of dozens in areas outside of the capital. Boluarte has indigenous roots and defended using force. He has faced investigations regarding the deaths of protesters, but has been shielded later by Peru's Constitutional Court. She was also involved in a number corruption scandals. Her brother was placed under pre-trial custody on corruption charges, and there were investigations into her luxury jewelry and watches. Boluarte was also criticized for the rising crime rate in the country, which has sparked protests around the country and the capital. Boluarte's approval rating was just 2% to 3%, which made her one of the least popular leaders in the entire world. In September, Gen-Z activists protested against Boluarte. This led to clashes with police. Boluarte managed to stay in power despite all odds until Thursday evening, when the Congress convened an emergency session for four motions of impeachment. Boluarte's term, which was initially meant to run until July 2026 was removed by a vote taken just after midnight. (Reporting and editing by Raju Gopikrishnan; Alexander Villegas)
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Queensland, Australia reverses policy and pledges to continue using coal power
The Queensland government in Australia announced on Friday that it will continue to run coal-fired power plants until at least 2040. This reverses a plan to quickly switch to renewables. It also makes national emission reduction targets more difficult to achieve. The Liberal National Party, which is centre-right, won the election last year in Queensland. This huge area of land in Australia’s northeast produces more than 60% electricity from coal-fired power plants owned mostly by the state. David Janetzki is the Queensland Treasurer and Minister for Energy. He announced a five-year plan to address energy issues. He said that Queensland's coal-fired generation fleet was the youngest in Australia. State-owned coal generators would continue to run as long as the system needs them and the market supports their operation. The announcement highlights the differences between Australia's main political parties in climate policy. The Labor Party, which controls the federal government and the majority of states and territories, is a strong advocate for the rapid development and use of renewable energy. Last month, the federal government announced its commitment to reduce national emissions from 2005 levels by 62%-70% by 2035. Queensland's former Labor government stated that 80% of its power would come from renewable sources by 2035, and the state would "no longer rely on coal". Many Liberal Party and National Party figures oppose, however, what they view as an overly rapid rollout of renewable energies that would ruin the landscape and impede the economy. Janetzki stated that consumers would save money by sticking to coal generation in Queensland, a major coal producing state. According to his plan, coal plants will be operated at least until the end of their design life, which is in many cases around 2040. According to the plan, plant lifespans can also be extended if necessary. The roadmap for the next five years also includes the construction of a gas-fired power plant in the State and a commitment to A$1.6 billion ($1.1billion) to maintain coal, gas, and hydroelectric plants in the State, as well as A$400m to encourage private investment in renewables and gas, energy storage, and energy storage. Janetzki stated, "This plan is sensible and pragmatist, based on engineering and economics, not ideology."
Asian stocks are choppy after commodities rally as they catch their breath. The yen is in focus
The Asian stock market limped into the weekend on a weak footing, as Wall Street's declines continued through early trading. Commodity markets also took a break after their recent surge.
The regional markets are on track to have one of the best years they've had in a decade. They outpace their U.S. counterparts, as President Donald Trump’s economic policies and tariffs trigger a surge of order across the region.
Chris Weston of Pepperstone Group Ltd, Melbourne, said that the U.S. session was the moment when a number "well-subscribed and high-momentum" trades, including gold, cryptocurrency, silver, and a large part of the S&P 500, "finally displayed signs of exhaustion."
The MSCI broadest index for Asia-Pacific stocks outside Japan fluctuated in gains and losses. Its gains for the past week were still up for grabs, as U.S. stock markets ended their previous session with modest declines.
Hong Kong's shares fell the most by 1.1%. The Australian market, however, slid only 0.1% in the face of volatile commodities markets. Stocks in South Korea surged by 1.7%, continuing the gains of the region's top-performing index.
The U.S. Stock Futures have reached a bottom, ahead of the Wall Street earnings season which begins next week. S&P 500 E-minis rose 0.2% while the U.S. Dollar Index, which measures greenback strength against a basket six currencies, remained near its two-month-high at 99.37.
The yield on the benchmark 10 year Treasury bond dropped to 4.1384% from its U.S. closing of 4.148% Thursday.
FedWatch, a tool of the CME Group, shows that traders' expectations remain strong. Fed funds futures are pricing in a 94.1% chance of a rate cut by 25 basis points.
TAKAICHI WALKS a Tightrope
The Nikkei index fell 0.7% after a week of sharp gains, including Thursday's record-breaking closing high.
The data earlier in the morning showed that wholesale prices had risen 2.7% over the past year, a sign of cost pressures persisting. This will keep the markets prepared for a rate hike possible by the Bank of Japan at its meeting on October 30.
The dollar fell 0.1% to 152.96 yen, the lowest level since February for the Japanese currency, after Sanae Takaichi, the leader of the ruling party, said that the central bank was responsible for determining monetary policy, but that all decisions made by the central bank must be in line with the government’s goals.
However, traders say that her promise to reassert the government's control over the central banks may be tempered by a weakening yen as well as domestic political considerations.
In a recent research report, Bank of America analysts wrote that the market expects Japan to adopt fiscal expansionary policies. "However there is considerable uncertainty about the details of the policies under discussion, as well the extent of fiscal expansion."
Focus on Commodities
Gold continued to decline, after it snapped a four-day streak of gains on Thursday. This was shortly after the metal broke the $4,000 barrier for the first. The ebullience spread into other precious materials. Gold spot was trading at $3,971.93 an ounce down by 0.1%, while silver rose 1% to $49.62. Silver has now retested the $50 barrier after breaking through it for the first-time on Thursday.
Chinese stocks fell after ETFs that track large-caps in Wall Street declined overnight. Beijing had tightened its control over the rare earths sector on Thursday.
Brent crude rose 0.1% on the energy market to $65.27 a barrel after Israel's government approved a ceasefire Friday with Hamas, paving the way for the suspension of hostilities in Gaza and the release of Israeli hostages there within 24 hours.
(source: Reuters)