Latest News
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
-
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.
The UK's net-zero mission is hampered by high electricity prices
The only British aluminium coil factory has invested millions to reduce its carbon footprint, save energy and protect itself from some the highest electricity prices in the world.
When Bridgnorth Aluminium falls below the threshold for government subsidies that help businesses pay their bills, they ramp up everything to make sure they don't miss out.
Our finance guy told us at the end the year that it was okay to keep the lights on more. "It's kind of strange and counterproductive," Adrian Musgrave said, head of sales for Bridgnorth Aluminium.
The paradoxical situation is caused by the high electricity prices in Britain and the fragmented support that successive governments have provided to large industrial power consumers.
According to the International Energy Agency (IEA), large energy-intensive companies in Britain spent four times as much on electricity in 2013 than businesses in the U.S., and double what their competitors in France or Germany paid.
According to over 25 industry experts, including business owners, energy managers, and policy analysts, the high power prices are not only a barrier to Britain's move towards cleaner energy, but also to its goal to reach net zero energy by 2050.
High power costs, they said, have prevented companies from investing in more efficient equipment, stopped them from switching to low-carbon electricity, and prevented others from competing with their foreign competitors to build the wind farms and pylons needed for a future of net zero.
Rachel Solomon Williams, the head of Aldersgate Group which helps companies and governments decarbonise, said that this was the biggest barrier in the UK to achieve net zero. It will be a major obstacle to net zero if the electricity costs are not addressed.
The new Labour centre-left government in Britain sees energy transition as an opportunity to boost the economy, by creating highly-skilled manufacturing jobs and innovative firms that can export their knowledge.
ROLLERCOASTERS RUNNING ON FOSSIL FUEL
Gas is the most expensive fuel in Britain, even though Britain generated more than half of its electricity last year through renewable sources such as wind and sun.
The wholesale electricity price is set every 30 minutes based on the cost of last energy used to meet demand. Even if wind and solar provide 99% of power, gas-fired plant is needed to reach 100%.
The average electricity bill is made up of about 40% levies.
In Europe, other countries use the same pricing structure based on marginal costs in wholesale electricity markets. However, in France for example, the majority of the country's power is nuclear, meaning that gas prices are set less often.
The British government wants to bring the cost of energy more in line with the big European markets. To do this, it has proposed that grid charges be removed from the most intense users.
Bridgnorth has trained its staff to reduce energy consumption. The lights are dimmed when the factory isn't in use. And the furnace fans have been redesigned with smaller motors that consume less energy.
It receives a portion of its power from an nearby anaerobic digester that produces clean energy out of food waste. The company would like to install a solar panel on the site and make other improvements to its electricity, but this would put it below government assistance threshold.
It would like to recycle scrap in order to create a circular economic system, but the high cost of energy has limited its investment.
Musgrave explained that the monthly energy expenditure was 1 million pounds ($1.35 millions), and you can see how important it is to factor energy into strategic planning.
Bridgnorth participates in the British Industry Supercharger Scheme, which exempts companies that spend more than 20 percent of their output on electricity and those who make core products like steel, glass, and chemicals.
Bridgnorth makes large sheets of aluminium rolled and carefully monitors its production and energy costs to ensure it doesn't fall below the 20% threshold and lose 3 million pounds in support each year.
A spokesperson for the British government said that the UK was investing in order to "get off the rollercoaster" of the fossil fuel markets.
After a decade of inaction, they announced that "we are cutting the electricity costs of thousands of businesses up to 25%. This will make them more competitive, and unlock growth."
This is just a bunch of nonsense
Bridgnorth Aluminum is not the only company struggling to remain competitive and navigate a shift to net-zero emissions while facing such high electricity costs.
Grainger & Worrall is just over a half-mile away. They are pioneers in "gigacasting", a method used by electric car makers like Tesla to produce large lightweight structural parts all at once.
To eliminate waste it recycles the sand, but this takes a lot of energy.
Duncan Eldridge, Chief Executive, said: "It makes us less competitive. It's bizarre, but the right thing to be doing." "We are spending more on electricity and less on capital investments," said Duncan Eldridge, Chief Executive.
Jonathan Duck, the Chief Executive of Amtico in Coventry, also located in Britain's historic industrial heartland said that energy costs had become so high, the company crunched numbers to determine if there were any alternatives to the grid.
Conclusion? The conclusion?
He said, "I am scratching my head, thinking, 'Well, this is just bonkers.' The structure of the market encourages me to build my own gas-fired electricity station, but that is not the future."
Amtico decided not to build the factory because it didn't feel "morally correct".
7 Steel UK in Cardiff, the Welsh capital, uses an electric-arc furnace to produce the low carbon steel used for wind farms and electricity poles. This is a very radical approach.
It shuts down its furnace when wholesale prices are too high. Production can sometimes be halted for several days. Due to high costs and low demand, the furnace operated at only 70% of its capacity last year.
Gabriella Nizam is the head of sustainability at 7 Steel. She said, "Decarbonisation in the UK relies on steel. Yet we don't appear to grasp that concept."
'IN SURVIVAL MODE'
In January 2023, to prevent non-fossil fuel generators from making excessive profits due to high electricity prices the government introduced an windfall tax. The tax is set to expire in March 2028.
The governments of the past have also considered ways to break the connection between electricity and gas prices. One way is to offer renewable energy to consumers directly in the form of a green power pool, rather than via the wholesale market.
Michael Grubb is an expert in energy policy at University College London. He said that while the government acknowledged that this could work, they had not tried it and thought it too radical.
He said that "their priority was to maximize investment."
Green energy advocates, as well as many policy experts, say that Britain is currently in an expensive investment phase for its energy transition. Prices will drop when more renewables are brought on line and less gas is used to meet demand.
It is a problem for the moment, but it will eventually be resolved.
Britain has been a leader in reducing emissions. It built one of the largest offshore wind sectors in the world to phase out coal. Ember data shows that the UK aims to generate 95% of domestic electricity by 2030 from low-carbon resources, and 65% came from non-fossil fuel sources in 2017.
High electricity prices are a barrier to the UK's goal of net zero.
Nissan, the Japanese automaker, says that its British facility has the highest electric costs in its global facilities. This is threatening to its ability of making EVs at this plant.
IHG, the largest hotel company in the world, has said that its British hotels are unable to adopt hot water heat pumps in order to reduce emissions like those in Europe and Southeast Asia, due to the prohibitive costs.
Many companies, especially in heavy industries, are concerned about how long they will be able to compete with their international competitors if high electricity prices prevent them from making investments.
Nizam, 7 Steel's Nizam, said: "We are always in survival mode." "We'll eventually get there but what will the sector look like by then?" ($1 = 0.7402 pounds)
(source: Reuters)