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The ECB's VP has warned that market volatility can amplify the shocks in the euro zone economy.
ECB Vice-President Luis de Guindos stated on Wednesday that financial market volatility could amplify shocks to the economy. The European Central Bank is expected to consider various scenarios of 'growth and inflation' when determining its policy next week. The fallout of the war in Iran has likely pushed inflation higher, and increased pressure on the ECB to step in and curb price pressures. De Guindos acknowledged that the forecasting process has become "more complex" and the volatility of the markets could have a greater impact on the real economy. He told a Madrid conference that "an amplification of the shock effect of an Energy Shock can occur, and may lead to an even more intense impact on Economic Activity." De Guindos stated that the ECB needs to consider different scenarios as it did in 2004, when Russia invaded Ukraine, and accept uncertainty and difficult forecasting. The financial?markets expect the ECB?to raise interest rates in the fall on the premise of higher oil prices?feeding through to the price and that the ECB would be less tolerant if an?inflation?overshoot based on its experience 2021/22. The bank had to raise rates in record time to stop the price increase, which was soaring into double-digit territory. De Guindos warned of the downside risks to the economy from the war. (Reporting and writing by Jesus Aguado, Paolo Laudani and Balazs Koranyi. Editing and reviewing by Andrew Heavens and Clarence Fernandez.
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Malaysia has enough fuel to maintain the subsidised price of transport fuel, says PM
Malaysia can continue to provide subsidies for a widely used fuel, according to Prime Minister Anwar Ibrahim, amid the surge in oil prices worldwide due the Middle East conflict. The government has decided to 'keep the price for RON95 fuel at 1.99 ringgit per litre ($0.51) despite a spike in prices. Checks with the state energy company Petronas have confirmed this. Anwar, in a televised statement, said that the?reserves of oil will last until May. Anwar stated that the government was able to protect the people against the full impact of the rising prices for oil and other essentials. He added that?government officials were ordered to limit their overseas travel and that all government agencies, as well as government-linked businesses, would not be organizing celebrations for the upcoming Eid al-Fitr holidays. Anwar stated that the cabinet would hold a special meeting to review the fiscal situation of the country on Friday. He added that the government would closely monitor the developments in the Middle East.
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Shanghai Aluminium holds the top spot with Mideast Supply disruption in focus
Aluminum prices in Shanghai recovered on Wednesday, as the focus shifted to the loss in global supply due to conflict in the Middle East. This followed a brief sell-off that was triggered by Donald Trump's remarks about the Iran War. The Shanghai Futures Exchange's most traded aluminium contract closed the daytime trading up 2.6% to 25,215 Yuan ($3,672.23) a metric ton. The contract fell 1.41% Tuesday, as Trump's remarks suggesting that the Iran War would soon be over temporarily eased supply concerns. Benchmark three-month aluminum on the London Metal Exchange eased 0.19% per ton to $3,399.5 by 0802 GMT. It reached a nearly four-year high of $3,544 per ton on Monday. The Middle East war, which is responsible for?around 9 percent of the global supply of aluminium, has caused shockwaves in the 'global aluminum market, by?freezing the shipments through the Strait of Hormuz. In response, the Qatari smelter Qatalum has begun to shut down production, and Aluminium Bahrain, one of the largest smelters in the world, declared force majeure for shipments. Jing Xiao is a senior analyst at broker SDIC Futures. She said that the structure of backwardation reflects the tight supply in near-term. A market structure called backwardation occurs when immediate deliveries are valued higher than later deliveries. SDIC's Xiao said that once the production had been shut down, it would be at least a half-year before operations could resume. This indicates a 'prolonged lack of supply in Middle East. Investors are also awaiting the release of a number of?U.S. This week, the Federal Reserve will be releasing economic data including the consumer price indices to gauge its policy outlook. Copper was unchanged, while nickel dropped?0.69%. Lead fell 0.06%. Tin lost a hefty?0.71%. Zinc slipped?0.08%. Other LME metals saw a decline of 1.07%. Nickel fell 0.45%, while lead remained flat. Tin dropped 0.34% and zinc dropped 0.75%. Reporting by Amy Lv, Lewis Jackson and Ronojoy Mazumdar; Editing by Ronojoy Mazumdar.
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Harmony announces a double dividend following the gold price rally and lower copper production
South Africa's Harmony Gold reported a 13% increase in its half-year profits on Wednesday as higher gold prices offset lower production and grades. This allowed the miner more than double their dividend. Harmony's headline earning per share, a measure of profit, was 14.31 rand ($0.8827) for the six-month period ending December 31. It had previously been 12.70 rand. The largest gold producer in South Africa announced an interim dividend at 5.30 rands per share. This is up from the previous?2.27, which made a record payment. Gold prices are expected to rise by?60% by 2025 due to geopolitical uncertainty and economic instability, as well as expectations of U.S. rate cuts and an increase in purchases by central banks, amid a trend of global dedollarisation. Gold prices have risen by almost 30% this year, reaching a record-high of $5,600 per ounce near the end January. Harmony's production of gold fell 9%, to 724.099 ounces. This was due to earthquake-related disruptions in Hidden Valley, Papua New Guinea, and a shortage of sodium cyanide in South Africa in the second quarter. The company expects to produce between 17,500 and 18,500 metric tonne of copper from its newly acquired CSA Mine in Australia during the current financial period, which ends June. CEO Beyers Nel stated that the "lower annualised rate of production" (about 28,000 metric tonnes) compared to the 40,000 tons historical production rate, was mainly due safety stoppages, and shaft rehabilitation. Harmony acquired CSA in October 2025. This mine will expand its copper portfolio, which includes the Eva Copper Project in Australia and?the Wafi Golpu project, owned jointly with Newmont, in Papua New Guinea. Within the next three years, the company hopes to produce 100,000 metric tonnes of copper annually. Harmony has diversified into copper, a critical metal for electric vehicles and grid infrastructure. This is to capitalize on the growing demand of this metal as the world shifts to cleaner energy.
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AI stocks lift Japanese shares, as oil concerns ease
Japanese shares extended their rally on Wednesday for a second day, as investors purchased beaten-down stock and concerns about global oil supplies eased amid the Middle East conflict. The Nikkei closed at 55,025.37 after rising as high as 2.8% earlier, and the Topix edged 0.9% higher to 3,698.85. Naoki Fukuwara, Shinkin Asset Management's senior fund manager, said that investors were buying dips in areas with the highest levels of selling, where there are signs of a resurgence. The price action was also strong. Artificial intelligence-related shares, which were hit hard on Monday due to pessimism about the U.S./Israeli war against?Iran and other factors, were some of the top performers on the Nikkei index. Resonac, a chemical and advanced materials company, saw its shares soar 10.4%. It was the index's largest percentage gainer. SoftBank Group shares rose 7.1%, after rising nearly 10% in the previous session. This was due to strong earnings from Oracle (a partner in Stargate AI infrastructure) which helped boost their share price. Fujikura, a cable and optical fibre manufacturer, also saw a 6.6% gain. The Nikkei Index saw 161 advancing companies and 63 declining ones. Oil market remains a major concern after recent sharp swings. The Wall Street Journal reported that the International Energy Agency had proposed the largest release in history of oil reserves?to lower crude prices. Brent crude futures LCOc1 fluctuated between gains and losses in volatile trading, with the last rise of 0.3% at $88.08 a barrel. U.S. crude was up by 0.9% to $84.16 per barrel. They were still lower than Monday's near $120 per barrel mark. Fujiwara stated that if crude oil continues to remain at current levels then stocks are likely a good opportunity for investors. He said that if oil prices rise above $100 again, "stocks are likely to come under pressure and the market (for stocks) will need to look for a bottom." (Reporting and editing by Rashmi aich, Harikrishnan Nair, and Satoshi sugiyama)
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Carlyle sells SierraCol, a Colombian oil company, to Prime Infrastructure Philippines
Carlyle, a private equity firm in the United States, announced on Wednesday that it had agreed to sell its Colombian oil producer SierraCol, to Prime Infrastructure Capital, an infrastructure division of Filipino businessman, Enrique K.?Jr. Sources told 2025 that Carlyle had asked for $1.5 billion to buy the Colombian company, SierraCol, after it bought assets from Occidental Petroleum in 2020. In the oil and natural gas sector, Carlyle reached an initial, non-binding agreement in January to purchase most of the international assets of sanctioned Russian firm Lukoil, and merge Moeve, its European refining company, with Galp, a Portuguese energy firm's downstream business. "This is an area where we have a strong track record and I plan to continue this." Bob Maguire, co-head of Carlyle International Energy Partners CIEP, said that we?have a playbook to execute complex carve outs and strengthen?these businesses. He said CIEP has no set views on the amount of investment that should be allocated to upstream or downstream acquisitions. Parminder Singh, CIEP's managing director, said that the market is a difficult one to operate in because major oil and gas companies are keen to increase their reserves of oil and natural gas while reducing spending on low-carbon projects. Carlyle has said that it has invested $1 billion in SierraCol, mostly on existing assets. This is to stabilize the net production of around 45,000 barrels per day. SierraCol's daily production of 77,000 barrels equivalent to oil is around 10% of Colombia's total production. According to SierraCol's website, the company had a net debt of 618 million dollars and a free cashflow of $205 million for the twelve months ending October 2025. Prime Infrastructure manages energy, water and waste infrastructure. (Reporting and editing by Tomasz Janovowski; Shadia Nasralla is the reporter)
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Mike Dolan: The dangers of US oil-driven redistribution
U.S. indexes of the stock market have so far weathered the oil shock this month well because investors are expecting only a slight GDP impact from higher energy prices. This'resilience' masks the fact that income is shifting from households to 'Big Energy, and this could be a very dangerous trend in an election year. As uncertainty continues to rage about the length and extent of the Iran War, the sharp and volatile rises in energy costs have caused oil and natural gas prices to look structurally higher for the coming year. Fertilizer shipments are also being held up in the Middle East Gulf region, which is causing concern about food costs. The chances of a U.S. rate cut this year are reduced or delayed as inflation has risen again. It's not good news for either the U.S. consumer or economy, until you consider that America is now a net energy exporter. This is a huge windfall for the domestic producers and exporters who are supplying all of that oil and gas in the United States. There's also no threat to their security or any blockage of their product getting to market, unlike their competitors from the Middle East and elsewhere. Carlyle's Jason Thomas, a strategist, points out that in the past 12 months the U.S. had an annualized energy surplus of almost $100 billion. The surge in oil prices is only going to increase this amount. He wrote that "higher gasoline prices could still be thought of as a tax" on U.S. customers, but this is offset by an increase in revenues at home that did not exist in 2007-08 when the energy shock shaved more than 1% off the U.S. GDP. The U.S. is now a net oil exporter for the first since the 1950s. Assumptions of a GDP drop of 2007-08 - one that could halve U.S. economic growth if the price of oil rose today by the same amount - are now out of date. GLANCING BLOW The "ready reckoner", a rule-of thumb guide created by Apollo Global Chief economist Torsten Slok, shows that even if crude oil remains above $100 per barrel until 2027 the shock will fade over time. He showed that while the net effect on headline inflation can be as high at 0.7 percentage points, the effect on real Gdp, unemployment, and core inflation is only 0.1 percentage points. The U.S. has been a net exporter of oil and its energy efficiency has increased significantly in recent years. This means that the economy consumes less oil for every unit of GDP than it did previously (and) this helps to dampen the negative impact of price increases. Some people do not think it will be so easy if the shock continues. Morgan Stanley estimates that, if an oil price jump of 25% caused by a supply shock lasted for four quarters, the real GDP would have been about 1.5% less, with the majority of the damage being in the first three. The issue is, the GDP can still hold up quite well, even though it seems that everyone agrees that rising energy prices and inflation in general act as a tax to households. PRESSURES FOR THE ELECTION YEAR If a sustained oil crisis had the minimal impact on GDP that some claim, then the money from households already in a tight spot is simply being redistributed by the energy companies to the domestic market. The government could step in and subsidizeand cushion household, but this would simply shift the burden to an already stretched Treasury. Since the COVID-19 pandemic, the political toxicity of high U.S.?inflation headlines has been well documented. Wall Street is convinced that the conflict in Washington will not be as severe and should therefore buy the dip, since GDP will continue to grow regardless. A raid on the wallets of households that ends up in the coffers of domestic oil and gas companies might not go over well with voters, especially if they believe the oil'surge' was first triggered by U.S. armed forces. The opinions expressed are those of the columnist, author. This column is a great read! Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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Uniper pays first dividend in four-years as the government's exit is near
The state-owned utility Uniper announced on Wednesday that it would pay a dividend – for the first time in four years – as the group prepares to return to the stock market following an anticipated ownership exit from Berlin. "The ability to pay dividends again is a sign that Uniper has financial stability, and it's a critical component of its viability on the capital markets," said CEO Michael Lewis. Uniper, which had been bailed out in 2022 by the German government during Europe's energy crises, has proposed a dividend per share of 0.72 euro ($0.84) for 2025. The last dividend it paid was in 2021. Uniper forecasts a core profit adjusted of 1 billion to 1.3 billion euro for 2026 compared to 1.1 billion euros in 2025. In 2026, adjusted net income will be between 350 million and 600 million euros. This compares to 544 million in 2018. In the course of reprivatising, Uniper lost its dividend-paying rights as part of the nationalisation of Uniper, which led to Berlin owning 99.12%. Berlin has plans to either sell or list its stake. This is because the EU requires that it be reduced to 25% plus 1 share by 2028. $1 = 0.8595 Euros (Reporting and Editing by Linda Pasquini, with Christoph Steitz)
China's NIO aims to sell thousands of cars overseas this year
Qin Lihong, the president of Chinese 'electric vehicle manufacturer NIO, said that he hoped to sell thousands of his 'cars overseas this year as part of an expansion plan for the next two or three years. Qin Lihong made the comments after NIO announced its first quarterly net profit and forecast that it would break even by 2026.
Qin stated that while it is expecting the domestic passenger vehicle market to experience a decline in sales, NIO wants to "build a reputation" among overseas users by having top executives personally review consumer complaints.
According to the 11-year old Chinese automaker, the European market is becoming more challenging as government EV incentives decrease and electricity costs rise.
The 'European Commission' is offering tariff waivers to Chinese automakers in exchange for a minimum price and sales quota.
The 'European Union' introduced tariffs against China-based EV manufacturers in 2024. However, it has recently launched a scheme where carmakers are able to negotiate?tariff exclusions for individual electric models imported by China. (Reporting and editing by Clarence Fernandez, Andrei Khalip and Zhang Yan)
(source: Reuters)