25/06/2025

BIZ & FINANCE WEDNESDAY | JUNE 25, 2025

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LNG freight rates surge to highest since October 2024

VIRGIN AUSTRALIA SOARS IN RETURN TO STOCK MARKET SYDNEY: Virgin Australia climbed sharply as it re-entered the local share market yesterday, a dra matic comeback from near bank ruptcy more than four years ago. A 30% chunk of Virgin Australia, one of the few domestic rivals to Qantas, was sold in an initial public offering this month at A$2.90 a share to raise A$685 million (RM1.89 billion). The price values the entire airline at A$2.3 billion. The stock, which listed on the Australian Securities Ex change at noon, climbed 8.6% from the offer price in the first five minutes of trade. The stock closed its debut session at A$3.23. US private equity giant Bain Capital came to the airline’s rescue in late 2020 after the Australian government refused to bail it out as the Covid-19 pandemic brought international travel to a standstill. Bain now holds about 40% of the airline. Qatar Airways bought a 25% share in the carrier this year. Shares of Qantas, the main rival to Virgin Australia, closed 2.4% higher yesterday following a drop in global oil prices, after Iran took no action to disrupt oil and gas tanker traffic through the Strait of Hormuz.– AFP, Reuters HIGHER US TARIFFS ON HOUSEHOLD APPLIANCES IN EFFECT WASHINGTON: Higher US tariffs affecting several home ap pliances that contain steel took effect on Monday, according to a recent government notice, in a move that could add to the costs of consumer goods. US President Donald Trump this month moved to double levies on steel and aluminium imports to 50% and since then, the Department of Commerce added eight “steel derivative products” that will also be hit by the duties. These include refrigerators, dryers, washing machines, dishwashers, cooking stoves and ovens, as well as food waste disposals, said a notice dated mid-June. The tariff imposed will be assessed based on the value of steel content in each product, the notice added. This addition took effect on Monday. – AFP GERMAN BUSINESS SENTIMENT RISES IN JUNE: IFO SURVEY BERLIN: German business morale improved more than expected in June, a survey showed yesterday, with a particular improvement in companies’ future prospects. The Ifo institute said its business climate index rose to 88.4 in June from 87.5 in May. Analysts polled by Reuters had forecast a rise in the reading to 88.2. “The German economy is slowly gaining confi dence,” Ifo president Clemens Fuest said. A separate Purchasing Managers’ Index survey on Monday showed that business activity in Germany returned to growth in June, driven by a recovering manufacturing sector that saw its strongest increase in new orders in over three years. Germany, the only G7 nation that has recorded no economic growth for two consecutive years, faces another potential contraction in 2025 due to US tariffs. – Reuters

BR I E F S

source, who declined to be identified as he was not authorised to speak to the media. Insurance costs for LNG tankers going through the Strait of Hormuz have also increased, said three trade sources, with one adding that the war risk premium has surged by up to five times since the start of the Israel-Iran conflict. Around 20% of global oil and gas demand flows through the Strait of Hormuz, situated between Iran and Oman. Qatar, one of the world’s top LNG exporters, sends almost all of its supplies via the strait. In a new development, US President Donald Trump late on Monday announced a complete ceasefire between Israel and Iran, potentially ending the 12-day war that saw millions flee Tehran and prompted fears of further escalation in the war-torn region. – Reuters

fell to five-year lows as the global fleet expanded and higher delivered prices in Europe incentivised US cargoes to remain in the Atlantic versus travelling to Asia. The shorter average journey times increased tanker availability. In the past two weeks however, it has become equally profitable to deliver LNG to both Europe and Asia, so spot cargoes are now incentivised to travel to Asia via the Cape of Good Hope, increasing average voyage times and reducing vessels available for charter, Afghan said. The Israel-Iran conflict, in which both countries have been firing missiles at each other, has raised fears Tehran may close the Strait of Hormuz in further retaliation. As a result, shipowners are holding off chartering vessels, which is reducing tanker availability and pushing up prices, said a trade

metres of LNG, the most common type in the market, was assessed at US$51,750 (RM219,885) per day on Monday, its highest level since Oct 3, according to pricing agency Spark Commodities. The Pacific freight rate for the same class of ship also surged, with Spark assessing it at US$36,750/day on Monday, the highest level since Oct 25. “This rise in global LNG freight rates has been largely due to tight vessel availability, which in turn has been caused by a shift in pricing signals for US cargoes,” said Spark Commodities analyst Qasim Afghan. “This has been further exacer bated by market sentiment around the developing situation in the Middle East,” he said. A recent tender by Egypt to buy up to 160 LNG cargoes through 2026 also drove up demand for vessels. In February, LNG shipping rates

Shares rally, oil slumps on Iran-Israel ceasefire SYDNEY: Oil tumbled as much as 4%, global shares surged and the dollar dropped yesterday as US President Donald Trump said a ceasefire between Israel and Iran was in place, a dramatic turnaround after the US bombed Iran’s nuclear sites over the weekend. Brent futures had already slid 7% on Monday and US shares jumped after Iran made a token retaliation against a US base and signalled it was done for now. Brent crude futures were down US$2.48, or 3.5%, at US$69 (RM293.18) a barrel by 0927 GMT. US West Texas Intermediate crude fell US$2.37, also 3.5%, to US$66.14. “With markets now viewing the escalation risk as over, market attention is likely to shift towards the looming tariff deadline in two weeks’ time,” said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities. “Our sense is that the quicker than expected resolution to the Middle East conflict leads to expectations for a swifter resolution on tariffs and trade deals.” But for now, equity markets were basking in the eased geopolitical tensions. Risk assets rallied, with S&P 500 futures up 1% and Nasdaq futures 1.3% higher. Europe’s Stoxx 600 gained 1.3% in early trade, with travel stocks, such as airlines surging 4% while oil and gas names shed 3%. Earlier in the day MSCI’s broadest index of Asia-Pacific shares outside Japan jumped 2.2% while Japan’s Nikkei rallied 1.1%. News of the ceasefire saw the dollar extend an overnight retreat and slip 0.7% to ¥145.43, having come off a six-week high of 148 yen overnight. The risk-on mood saw gold prices ease 1% to US$3,333 an ounce. – Reute SINGAPORE/LONDON: Shipping costs for liquefied natural gas (LNG) cargoes have rallied to their highest in about eight months with vessel availability tightened by a shift in more ships heading to Asia at the same time as conflict has escalated in the Middle East. The Atlantic freight rate for vessels with two-stroke engines capable of carrying 174,000 cubic o Atlantic, Pacific shipping costs rise as vessel availability tightens amid escalated tensions in Middle East

Nissan shareholders assail management TOKYO: Nissan Motor shareholders vented their frustrations over the automaker’s poor performance at its annual general meeting yesterday, with some demanding greater management accountability for the deepening crisis at Japan’s third largest car company. estimated a first-quarter loss of ¥200 billion (RM5.85 billion). All the same, shareholders voted down a number of proposals that the company had opposed, in cluding an activist-shareholder proposal that would have forced Nissan to take action on listed subsidiary Nissan Shatai. about the cut to the dividend. Tokyo-based activist shareholder Strategic Capital had pressed Nissan to take action on its listed subsidiary as part of its overhaul. Protesters handing out leaflets against Nissan Motor’s turnaround plan in front of the company’s global headquarters while its annual shareholder meeting was being held in Yokohama yesterday. – REUTERSPIC

Nissan owns 50% of Nissan Shatai, which manufactures cars for the automaker. Strategic Capital owns 3.5% of Nissan Shatai. It has also acquired a small stake in Nissan, allowing it to submit proposals to the general meeting. It has proposed that Nissan change its articles of incorporation so that it would be required to annually examine its relationship with listed subsidiaries and disclose what action, if any, it planned to take. Nissan’s board has opposed that and said changing its articles of incorporation would hinder its flexibility. – Reuters

The meeting was the first for new boss Ivan Espinosa since he replaced Makoto Uchida as CEO in April. It remains to be seen whether Espinosa, a company veteran, will be able to halt the sharp decline at Nissan. Shares have fallen some 36% over the last year and dividend payments have been suspended. Nissan reported a US$4.5 billion (RM19.1 billion) net loss in the last financial year and there is no guarantee it will return to profit this year – so far, it has declined to give a full-year earnings forecast, and has

Espinosa has laid out plans for big cuts, including closing seven plants and shedding a total of 20,000 jobs, or around 15% of Nissan’s workforce. One shareholder accused the board of trying to “shift its responsibility to frontline workers” by cutting jobs while retaining their own positions. The board should likewise face a shake-up or risk losing the trust of shareholders and company em ployees, the shareholder said. Another shareholder complained