Latest news with #geopoliticaltensions
Bloomberg
6 days ago
- Business
- Bloomberg
Brazil Engine Maker Says Tariffs Are Hitting Long-Term Projects
Brazil's WEG SA, a provider of industrial machinery for global oil and power companies, said its clients are delaying long-term investments due to rising geopolitical tensions and new tariffs. Chief Financial Officer Andre Luis Rodrigues said the company is preparing actions to mitigate potential US tariffs of 50% on Brazil that are scheduled to take effect on Aug. 1.
Yahoo
6 days ago
- Business
- Yahoo
EU, China mark 50 years of diplomatic ties
EU, China mark diplomatic milestone amid trade and geopolitical tensions European Commission President Ursula von der Leyen and European Council President António Costa are meeting Chinese President Xi Jinping and Premier Li Qiang in Beijing China is a 'critical partner' to Europe, Xinhua says Here are the latest updates from the EU-China summit on Thursday, July 24: EU-China relations deteriorate before Beijing summit Ties between the European Union and China hit rock bottom prior to the summit. Both sides have significant disagreements over trade, with the EU complaining over uneven access to the Chinese market for EU firms, China's chokehold on rare earth minerals, as well as industrial policies and huge subsidies favoring Chinese companies. After Chinese President Xi Jinping declined an invitation to attend, the talks were moved from Brussels to Beijing, and then reduced to one day from two. Read the full story about the current state of ties between China and the European Union. China is a 'critical partner' to Europe, Xinhua says China is a "critical partner" to the European Union with a range of shared interests, state news agency Xinhua said in a commentary piece on Thursday. It comes hours before a key EU-China summit to mark the 50th anniversary of the diplomatic partnership. "As the international landscape grows increasingly fraught, the anniversary offers a timely reminder: China is a critical partner to Europe, not a systemic rival," Xinhua wrote. "Like all major economic players, China and the EU do not agree on everything. But disagreement does not equal confrontation," Xinhua said, adding that the relationship needs more trust. EU, China mark diplomatic milestone The European Union and China are celebrating the 50th anniversary of the establishment of bilateral diplomatic relations. European Commission President Ursula von der Leyen and European Council President Antonio Costa are in Beijing Thursday for the occasion and will meet with Chinese President Xi Jinping, Premier Li Qiang and other top leaders. China and the EU are each other's second most important trading partners, but both sides quarrel over market access, industrial policies and Russia's war in Ukraine, among other issues. Brussels has pitched Thursday's talks as "a clear opportunity for detailed, frank, substantive actions around all aspects of our relationship." Beijing said this week ties with the bloc were at a "pivotal juncture" as both China and the EU contend with an aggressive US trade strategy under President Donald Trump. Welcome to our coverage Welcome to DW's coverage of the EU-China summit. The summit will mark the 50th anniversary of diplomatic relations between the EU and China. It comes as both Beijing and Brussels grapple with heightened geopolitical and economic tensions. Relations between the two sides have also been under stress due to trade frictions. Stay tuned for the latest updates from the summit.
Irish Times
7 days ago
- Business
- Irish Times
McKinsey bars China practice from generative AI work amid geopolitical tensions
McKinsey has stopped its China business from undertaking consultancy work related to generative artificial intelligence amid geopolitical tensions, excluding it from one of the most potentially lucrative markets for consultants in the country. The US firm instructed its mainland Chinese operation to refrain from projects deploying generative AI in recent months, according to two people with knowledge of the matter. One of the people said the move was prompted by Washington's growing scrutiny of US companies operating in sensitive sectors such as AI and quantum computing in China. The ban extends to projects in the mainland offices of multinational clients, but does not stop McKinsey's China business from working with companies that have more established forms of AI in their products. One person with knowledge of the matter said the policy could constrain McKinsey's ability to secure new business, given the central role generative AI now plays in corporate strategy and IT systems through products such as chatbots. READ MORE McKinsey has previously come under fire from US lawmakers for working with Chinese state-owned enterprises and local governments while also holding contracts with the US defence department. Bob Sternfels, McKinsey's global managing partner, was questioned by Congress last year over the consulting firm's alleged ties to the Chinese government. Although the US government has not imposed any explicit ban on consultancies advising on AI in China, it has sought to curtail the development of China's AI industry by tightening export controls on advanced chips and limiting American investment in Chinese tech groups. McKinsey's stance is more cautious than that of some of its competitors. A consultant at a rival US firm said they avoided Chinese clients that had been blacklisted by Washington, but continued to undertake AI-related work for others using mainland-based teams. McKinsey's move comes as foreign professional services firms, including law firms, consultancies and investment banks, retrench in China amid geopolitical tensions and a slowing economy. Chinese companies are increasingly turning to cheaper local rivals, while many multinationals are withdrawing from China or greatly reducing their investment in the country. McKinsey has reduced its headcount in mainland China, Hong Kong and Taiwan to about 1,000 from 1,500 in 2023, according to figures on its website. Despite the pullback, McKinsey continues to position itself globally as a leader in AI transformation. The firm has rolled out internal tools, including an AI chatbot, to help consultants automate tasks such as drafting proposals and building presentations. Its AI-focused unit, QuantumBlack, builds and deploys systems based on large language models. Asked about the ban, McKinsey said in a statement: 'Last year, we further strengthened our client service policies in China, where today our work focuses on multinational and Chinese private sector firms.' The firm added: 'We follow the most rigorous client selection policy in our profession, and we continue to evolve and strengthen our approach.' --Copyright The Financial Times Limited 2025
Yahoo
22-07-2025
- Business
- Yahoo
3 Oil Service Stocks to Ride Out the Global Energy Storm: Piper Sandler
In recent years, oil markets have been anything but stable. Geopolitical tensions – most notably the wars in Ukraine and the Middle East – have combined with shifting production strategies from the OPEC+ alliance to drive significant price swings. On top of that, Trump's tariff policies have thrown another wrench into global trade and pricing trends. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. All of this adds up to a mixed outlook for the oil industry, especially in the US. Taking the measure of the situation, and assessing how to invest in the segment, Piper Sandler analyst Derek Podhaizer writes, 'With the macro and oil prices still weighed down by a combination of tariffs and OPEC+ production hikes, we stay disciplined leaning into our oil price shock playbook and OFS Investment Prism to form our ideas.' Having launched coverage of stocks spanning various segments across the North America, International, and Offshore markets, Podhaizer is making concrete recommendations on three oilfield services stocks to buy. According to the TipRanks database, all three of his picks have earned Strong Buy consensus ratings from the Street – and are showing solid upside potential. Let's give these stocks a closer look, and find out just what makes them compelling choices in today's energy industry environment. National Energy Services Reunited (NESR) We'll start with National Energy Services Reunited, an international oilfield services operator whose activities extend across North Africa and the Middle East and into India and the Indonesian archipelago. The company employs over 6,000 people, who provide 20 service lines working with more than 25 exploration and production (E&P) firms in 16 countries. National Energy Services' market cap of $579 million plants it solidly in the small-cap category. National provides a long list of services, vital to the industry's ability to extract fuels from unconventional plays. These include filtration, hydraulic fracturing, nitrogen services, pumping, and well completions, as well as essential drilling services such as directional drilling, fishing tools, and testing services. In addition to these, National also provides tools and equipment needed to drill and maintain active rigs. In short, National makes it possible for its customers and partners to initiate drilling activities, complete wells, and provide steady flows of hydrocarbon fuel production. By providing these specialized sets of engineering and technical skills, the company allows E&P firms to focus on their own essential activities, locating and tapping fresh oil and gas reservoirs. National generated $1.3 billion in full-year revenue last year, for a year-over-year gain of nearly 14%. Nevertheless, shares in NESR are down significantly this year, with strong losses coming after the company released its 1Q25 results. The company missed expectations at both the top and bottom lines in the quarter, and its revenue was down sharply from 4Q24. The company attributed the slowdown to a lower work tempo in the Mid East during the Ramadan holiday month, as well as the general uncertainty in the global energy industry. When we take a close look at the Q1 results, we see that National had a top line of $303.1 million, up 2% year-over-year and $5.2 million below the forecast. The company's 14-cent non-GAAP EPS missed expectations by 6 cents. For Piper Sandler's Podhaizer, this company shows plenty of potential to generate gains in its core geographical area of operations. He writes, 'NESR is the only US listed pure-play Middle East service company, providing investors a way to gain exposure to growth regions across the Middle East, including Kuwait, unconventional Saudi Arabia, Oman, UAE, and Libya. NESR has positioned itself to be a platform to deploy US Shale technology across the Middle East… In combination with its Roya directional drilling platform, NESR is well positioned to scale unconventional activity in the Middle East, particularly the Jafurah basin in Saudi Arabia.' Podhaizer goes on to put an Overweight (i.e., Buy) rating on this stock, along with an $11 price target that points toward a one-year upside of 83%. (To watch Podhaizer's track record, click here) While there are only 3 recent analyst reviews on file for NESR, all are positive – giving the stock a unanimous Strong Buy consensus rating. The shares are priced at $6, and the $12 average target price implies an upside of 100% for the coming year. (See NESR stock forecast) Select Water Solutions (WTTR) The second of Piper Sandler's picks that we're looking at here is Select Water Solutions, which was previously known as Select Energy Services. The name change, effected two years ago, was made to reflect the company's true focus on providing sustainable water and chemical solutions in the energy industry. The energy industry depends on water and impacts water in myriad ways. Drilling operations frequently penetrate water tables as they target hydrocarbon layers, and unconventional extraction methods rely on mixtures of water, sands, and chemicals to enhance hydrocarbon well production. Select's services revolve around water – the company supports critical water infrastructure assets, provides manufacturing and recycling capabilities for both water and chemicals, and makes technology available to promote sustainable water use, minimizing or preventing environmental damage through the full cycle of the target well. Select can meet the full range of challenges affecting the energy industry's use of water and other essential chemicals. These include fluid analysis, production enhancement, operational efficiency, automated water balancing, water reuse, disposal systems, and efficiency issues in both transport and storage. The company's chemical technologies, including HYRC fluids, fluidmatch, and polymer chemistry, are designed to promote the safe and environmentally responsible admixture of needed chemicals into the hydrocarbon extraction processes. Shares in WTTR have been sliding this year; the stock is down 27% for the year to date. The company has faced headwinds in the form of lower oil prices and tariff concerns, like much of the oil industry. But, in its last quarterly report, the company beat expectations at both the top and bottom lines. Select's revenue came to $374.4 million, reflecting 2% year-over-year growth and beating the forecast by $13.6 million. On earnings, the company's non-GAAP EPS of 13 cents was 7 cents better than had been anticipated. The company burned cash during Q1, with its free cash flow reported as a negative $51.5 million. In his coverage of this stock for Piper Sandler, analyst Podhaizer notes that water services, particularly infrastructure, is an expanding niche within oilfield services. He says of WTTR, 'A unique idiosyncratic catalyst for WTTR is the meaningful growth in Water Infrastructure, which comes with extended contract terms at elevated gross margins (>50%) providing for multi-year earnings visibility. Specifically for its most recent Water Infrastructure announcement in Colorado, which management described as an opportunity 'to put really high gross margin related revenue through the company with contracts that could be up to 50 years in length,' with escalators that 'juice' the returns over the life of the contract. Management expects to grow Water Infrastructure to 50% of gross profit by the end of 2025, up from 25% in 2023.' Describing the outlook for the stock, and why it is positive for investors, the analyst adds, 'Given WTTR's earnings mix has been primarily Water Services and Chemical Technologies, two segments levered to the O&G cycle, valuation has been weighed down similar to its US Land peers. As Water Infrastructure becomes a larger part of the earnings mix, investors could shift their view more towards a SOTP approach with ARIS, TPL, and LB being the peer group.' What this comes down to for Podhaizer is an Overweight (i.e., Buy) rating, which he complements with a $15 price target that suggests an upside of 58.5% on the one-year horizon. WTTR is another stock with a unanimously positive analyst consensus, this one based on 4 recent reviews. The shares are currently trading for $9.46, and their $14 price target implies a share appreciation of 48% by this time next year. (See WTTR stock forecast) Precision Drilling Corporation (PDS) Last on our list is Precision Drilling. Precision, based out of Calgary in Canada's oil-rich province of Alberta, was founded in 1951 and is known for delivering high-performance drilling technology to the oil and gas industry. The company works onshore, and has 106 total rigs in operations, with a breakdown of 64 in Canada, 35 in the US, and 7 internationally. The company's international footprint includes operations in Kuwait and Saudi Arabia. Precision gives its customers access to the latest technology and expertise in fields such as gas-liquids and heavy oil drilling, well completion and production, high-pressure and high-temperature drilling, and custom rig configurations. On that last, Precision can also offer custom rig manufacturing. In North America, Precision offers a varied fleet of drilling rigs, capable of pad walking and mechanized pipe handling, and featuring hydraulically raised masts. The company supports its drilling operations from rig construction through repair and maintenance, and offers a resilient, efficient supply chain during operations. While oil drilling is an old occupation – the first true oil well was drilled in 1859 – Precision brings modern technology to bear on it. The company can provide apps to optimize drilling processes, and data analytics to provide the right insights at the right times – and all of this is supported by automation technologies which provide digital control for well operations. Like the other stocks on this list, Precision has seen its share price fall this year – the stock is down 16% year-to-date. Most of that price drop came during the first quarter, and the shares have been ticking upwards since bottoming out in early April. In its 1Q25 report, Precision showed a top line of C$496 million, down 6% year-over-year. In US dollar terms, this came to $357.4 million, and missed the forecast by $3.8 million. The company's earnings came to C$2.20, equivalent to US$1.58. The US earnings figure was 7 cents less than had been expected. Checking in one last time with the Piper Sandler view, we find Podhaizer writing of Precision's leading role in the Canadian oil patch. He says of the stock, 'PDS is the most active driller in Canada with 34% market share. Importantly, with improving fundamentals, including LNG Canada and TMX expansion, its Super Triple and Single rigs are near full utilization, which is expected to support further daily margin improvement. Its Super Triple fleet utilization in the Montney/LNG play currently sits at 90-95%. Despite a deflationary US Land market and soft outlook, PDS has greater relative exposure to the Haynesville, which is an expected area of growth with the buildout of LNG takeaway capacity… we expect PDS to experience greater torque compared to its peers with each additional rig that returns to work.' These comments back up the analyst's Overweight (i.e., Buy) rating, while his $72 price target suggests that the stock will see a gain of 41% heading into next year. There are 8 recent analyst reviews on record for this stock, and their breakdown of 6 Buys to 2 Holds gives the stock its Strong Buy consensus rating. The shares are currently priced at $51.15, and their $68.26 average price target points toward a one-year upside potential of 33.5%. (See PDS stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment. Disclaimer & DisclosureReport an Issue Inicia sesión para acceder a tu cartera de valores
Khaleej Times
22-07-2025
- Business
- Khaleej Times
Middle East sovereign investors recalibrate strategies amid geopolitical uncertainty and market shifts
Political and policy decisions have become core drivers of investment strategy, prompting sovereign investors to fundamentally reassess portfolio construction and risk management, a study showed. According to Invesco's annual Global Sovereign Asset Management Study, geopolitical tensions (84 per cent) remain the dominant short-term risks for sovereign wealth funds (SWFs) and central banks in the region, followed by a fallout from the Middle East conflict (68 per cent). An overwhelming majority (96 per cent) of respondents believe that geopolitical rivalry will be a key driver of volatility, while 91 per cent expect protectionist policies to entrench persistent inflation across developed economies. Most notably, 52 per cent of Middle East SWFs now see deglobalisation as a material threat to investment returns, underscoring a marked shift in the market narrative. Invesco's study, a leading indicator on sovereign investor behaviour, draws on the insights from 141 senior investment professionals, including chief investment officers, heads of asset classes, and portfolio strategists, from 83 SWFs and 58 central banks across the world, collectively managing $27 trillion in assets.* Active strategies gain traction alongside foundational passive exposure One of the key shifts in portfolio construction identified in the study is the greater use of active strategies by respondents. On average, Middle East SWFs maintain 78 per cent of their equities portfolio and 77 per cent of their fixed income portfolio in active strategies. The survey shows that 33 per cent of SWFs in the region are planning to increase active equity exposures over the next two years, with 50 per cent doing the same with fixed income. While passive strategies continue to provide efficiency and scale benefits, particularly in highly liquid public markets, active approaches are being used to address index concentration risks, navigate regional dispersion, and enhance scenario resilience in an increasingly fragmented landscape. At the same time, portfolio construction decisions such as asset class, geographic, and factor tilts are increasingly viewed as core expressions of active management. Fixed income redefined and reprioritised Due to a combination of geopolitical shifts and interest rate normalisation, traditional portfolio construction models are being rethought, with many SWFs turning to more dynamic portfolio approaches that includes more fluid asset allocations, enhanced liquidity management, and greater use of alternatives. Within this landscape, fixed income has assumed a new importance within SWF portfolios, becoming the second-most favoured asset class behind infrastructure. On a net basis, 30 per cent of Middle East SWFs plan to increase their fixed income exposure over the next 12 months. 'Amid geopolitical uncertainty and market shifts, investors across the Middle East are recalibrating their strategies,' says Josette Rizk, Head of Middle East and Africa at Invesco. 'Active asset management is growing in prominence due to its adaptability to a rapidly evolving economic environment. While private credit holds on to its popularity, fixed income has rebounded as the region's SWFs diversify exposures.' Private credit takes centre stage as a new diversification tool Private credit continues to gain momentum among SWFs in the Middle East, with 63 per cent accessing the asset class through funds and 50 per cent making direct investments or co-investments. The survey indicates that 50 per cent of SWFs worldwide, including 40 per cent of those based in the Middle East, plan to increase allocations to private credit over the next year. This growing interest reflects a broader rethinking of diversification as traditional stock-bond correlations erode in a higher-rate, higher-inflation environment. Sovereign investors are turning to private credit for floating-rate exposure, customised deal structuring, and return profiles that are less correlated with public markets. Once considered a niche asset class, private credit is now viewed as a strategic pillar of long-term portfolio construction. China remains a high priority in a fragmented emerging market landscape SWFs are taking a more selective approach to emerging markets. Asia (excluding China) is a high priority for 43 per cent of respondents worldwide and 25 per cent in the Middle East. Meanwhile, China is once again an important focus for 28 per cent SWFs globally and 33 per cent in the Middle East, with 60 per cent of the region's SWFs expecting to increase China allocations over the next five years. SWFs are increasingly orientating their China strategies around specific technology sectors, such as AI, semiconductors, EVs, and renewables, with 80 per cent of respondents in the region believing the country's technology and innovation capabilities will become globally competitive in the future. 'Middle East SWFs are focusing a large proportion of their portfolios on Asian economies,' adds Rizk. 'Based on the outcomes of our study, we anticipate rising investment flows between the Middle East and China, with higher growth potential in selected sectors.' Active management is viewed as essential in this environment. Just 25 per cent of Middle East SWFs rely on passive emerging market (EM) strategies, while 73 per cent access EMs through specialist managers, citing the need for local insight and tactical flexibility. Digital assets, continued exploration Digital assets are no longer seen as an outsider topic among institutional investors. This year's study shows a small but notable increase in the number of SWFs that have made direct investments in digital assets – 11 per cent, compared to 7 per cent in 2022. Allocations are most common in the Middle East (22 per cent), Asia Pacific (18 per cent), and North America (16 per cent), in contrast with Europe, Latin America, and Africa, where they remain at 0 per cent. For Middle East SWFs, the biggest barriers to investing in digital assets include regulatory challenges (100 per cent) and volatility (86 per cent). 'Investors are increasingly open to exploring the value digital assets may add to their portfolios,' says Rizk. 'In the Middle East, allocations are growing cautiously as investors balance new opportunities with regulatory challenges and market volatility.' Globally, central banks are simultaneously advancing their own digital currency initiatives, balancing innovation potential against systemic stability considerations. While no central bank respondents in the Middle East have launched a digital currency yet, 33 per cent are considering it, viewing efficiency in payments (100 per cent) and enhanced financial inclusion (44 per cent) as the biggest benefits of central bank digital currencies (CBDCs). Central bank resilience and gold's defensive role Central banks are reinforcing their reserve management frameworks in response to mounting geopolitical instability and fiscal uncertainty. In the Middle East, 67 per cent plan to increase their reserve holdings over the next two years, while 27 per cent intend to diversify their portfolios. Gold continues to play a critical role in this effort, with 63 per cent of central banks in the region expecting to expand their gold allocations over the next three years. Seen as a politically neutral store of value, gold is increasingly viewed as a strategic hedge against risks such as rising U.S. debt levels, reserve weaponisation, and global fragmentation. At the same time, central banks are modernising how they manage gold exposures. In addition to physical holdings, an increasing number are turning to more dynamic tools, such as exchange-traded funds (ETFs), swaps, and derivatives, to fine-tune allocations, improve liquidity management, and enhance overall portfolio flexibility without sacrificing defensive protection. This is expected to continue, with 21 per cent of central banks globally and 25 per cent in the Middle East saying they plan to hold investments in gold ETFs in the next five years, while 19 per cent worldwide and 25 per cent in the region intend to hold gold derivatives.
