How Saudi Arabia Is Diversifying Away From Oil — And Betting Big On AI

Justin

Forex

Political

Economic

Summary:

Think of Saudi Arabia and the first thing that comes to mind might be its massive, oil-derived wealth.

President and CEO of Saudi's Aramco, Amin H. Nasser, speaks during the Future Investment Initiative (FII) in Riyadh, Saudi Arabia October 29, 2024.

Think of Saudi Arabia and the first thing that comes to mind might be its massive, oil-derived wealth.While oil continues to drive Saudi Arabia's economy, the kingdom is now expanding into areas such as artificial intelligence, tourism and sports to diversify its growth avenues.According to Saudi Arabia's Minister for Investment Khalid Al Falih, more than half — 50.6% — of the Saudi economy is now "completely decoupled" from oil."This percentage is growing," Al Failh told CNBC's Dan Murphy, adding that government revenue used to be almost completely derived from oil money, but now, 40% of its revenue comes from sectors and sources that "have nothing to do with oil."

"We're seeing great results, but we're not satisfied. We want to do more. We want to accelerate the kingdom's diversification and growth story," he said.Saudi Arabia is doubling down on fast-growing sectors such as artificial intelligence, naming it one of its new growth areas, with Al Failh saying the kingdom will be a "key investor" in developing AI applications and large language models. Saudi Arabia would also build data centers "at a scale and at a competitive cost not achieved anywhere else.""AI has emerged [in] the last three, four years, and it's definitely going to define how the future economy of every nation. Those who invest will lead, and those who lag behind, unfortunately, will lose," he pointed out.

On Monday, AI chip company Groq's CEO, Jonathan Ross, told CNBC that for AI infrastructure thanks to its energy surplus. The country could see more than $135 billion in gains by 2030 thanks to AI, according to PwC.Saudi Arabia's quarterly budget performance report revealed that total government revenue for the first half of 2025 came in at 565.21 billion Saudi riyals ($150.73 billion), with oil making up 53.4% of the country's overall revenue, down from 67.97% in the same period in 2019.In 2024, the country reported a 1.3% rise in full-year GDP, mainly driven by a 4.3% increase in non-oil segments. Oil activity, on the other hand, fell 4.5% year on year.

The country's sovereign wealth fund — the Public Investment Fund — has acquired stakes in tech giants, video game publishers and football clubs as it uses oil revenues to diversify into other sectors.PIF has acquired stakes in video-game heavyweight Electronic Arts, establishing the SoftBank Vision Fund with Masayoshi Son's SoftBank Group Corp in 2017, and a takeover of English Premier League club Newcastle United in 2021.

When asked if declining oil prices were piling pressure on Saudi Arabia's economy and government revenue, Al Falih said that the country was not scaling back budgets and there were no cuts to public spending.Oil prices have fallen in 2025, with Brent crude spot prices down 13.4% so far this year, according to FactSet. Saudi Arabia's oil revenue slid 24% in the first half of 2025 from a year earlier.The government will continue to address all activities that require government spending, Al Falih said, noting that the PIF has grown sixfold since its creation and that the country was approaching nearly $1 trillion in capital deployed across sectors of strategic interest.

Tourism has also been a key growth area for Saudi Arabia. Ahmed Al-Khateeb, the country's tourism minister, told CNBC that the sector's share in GDP had grown to 5% in 2024 from 3% in 2019."We are [opening] resorts, new airlines, new airports, and the numbers are growing, and we are focusing on countries and visitors that are coming from outside to experience our great culture," Al-Khateeb highlighted.

The tourism minister also expressed confidence that the sector could contribute 10% of GDP by 2030, aiming to raise it to 20% eventually."This 20% will help Saudi Arabia to diversify the economy and make it more sustainable," he added.

Source: CNBC

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Adam

Stocks

U.S. stock futures are subdued as a busy week filled with big-name earnings reports, central bank interest rate decisions, and high-level trade negotiations picks up the pace. President Donald Trump is in Japan in the latest leg of an Asian tour, with hopes high that the visit will culminate with a trade deal with China following a summit with the country’s leader in South Korea on Thursday. UnitedHealth’s turnaround push will likely be in focus when the health insurer unveils its quarterly results, while Amazon is reportedly planning to axe tens of thousands of corporate jobs and gold extends its recent retreat.

Futures muted

U.S. stock futures traded around the flatline on Tuesday, as investors geared up for a bevy of corporate earnings and eyed the chances of a trade deal between the United States and China.

By 03:50 ET (08:50 GMT), the Dow futures contract and Nasdaq 100 futures were both unchanged, while S&P 500 futures slipped by 4 points, or 0.1%.

The main averages on Wall Street notched an all-time high record close for the second consecutive session on Monday, with hopes rising that the planned meeting of Presidents Donald Trump and Xi Jinping this week will yield a sustainable cooling in tariff-fueled U.S.-China tensions.

Markets cheered expectations that an agreement would avert triple-digit U.S. import tariffs and yield a pause in Chinese export controls on crucial rare earth materials, with the so-called VIX "fear gauge" slumping to about a one-month low.

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In individual stocks, shares of Qualcomm spiked by 11% after the chipmaker said it will release two AI processors for data centers starting next year.

Trump in Japan

Before the anticipated summit with Xi, Trump has been on a whirlwind, multi-day trip through a clutch of Asian countries.

On Tuesday, the president has been in Japan, where he has met with the nation’s newly-elected Prime Minister Sanae Takaichi, a protegee of former premier and Trump’s late friend, Shinzo Abe.

Trump and Takaichi inked a framework agreemet for securing rare earth supplies, in a bid to bring down international reliance on China for minerals vital in industries ranging from electric vehicles to semiconductors. However, no explicit mention of China, the dominant player in the worldwide rare earth sector, was made by either leader.

There were few details around Japan’s intentions for a pledged $550 billion investment in the U.S., which was part of a broader bilateral trade package earlier this year. According to Reuters, under the deal, Japan was expected to offer the White House investments in shipbuilding and vow to purchase U.S. soybeans, gas and pickup trucks.

UnitedHealth headlines earnings slate

Attention now turns to a host of corporate results, as a stream of returns due out this week intensifies.

UnitedHealth Group has lifted its annual adjusted income per share forecast, citing quarterly earnings which topped Wall Street expectations, as CEO Stephen Hemsley aims to reposition the health insurer for "durable and accelerating growth" next year.

In individual stocks, shares of Qualcomm spiked by 11% after the chipmaker said it will release two AI processors for data centers starting next year.

Trump in Japan

Before the anticipated summit with Xi, Trump has been on a whirlwind, multi-day trip through a clutch of Asian countries.

On Tuesday, the president has been in Japan, where he has met with the nation’s newly-elected Prime Minister Sanae Takaichi, a protegee of former premier and Trump’s late friend, Shinzo Abe.

UnitedHealth headlines earnings slate

Attention now turns to a host of corporate results, as a stream of returns due out this week intensifies.

The firm, which has been grappling with increased costs, posted a medical care ratio of 89.9%, below Bloomberg consensus projections of 90.7%. The metric gauges the percentage of an insurer’s premium revenue spent on medical claims and quality improvement activities. A higher figure indicates that more premium revenue is being used for patient care.

Partly buoyed by the lower-than-expected expenses, third-quarter adjusted per-share profit came in at $2.92, versus estimates of $2.83. Consolidated revenues were up 12% against a year ago to $113.2 billion, compared to expectations of $113.03 billion.

UnitedHealth subsequently raised its annual adjusted net income per share estimate to at least $16.25, up from its previous outlook of at least $16.

Shares of UnitedHealth climbed by more than 4% in premarket U.S. trading following the announcement.

Following the close of trading on Wall Street, the earnings docket includes figures from credit card firm Visa and online travel agent Booking Holdings. Later this week, numbers will be out from mega-cap tech giants like Google-owner Alphabet, Facebook-parent Meta Platforms, and e-commerce behemoth Amazon.

Amazon plans as many as 30,000 job cuts - Reuters

Ahead of the results, Amazon is eyeing deep job cuts at its corporate operations starting on Tuesday, in an attempt to pare back expenses and correct for overhiring during the pandemic, according to Reuters.

Citing people familiar with the matter, the news agency said as many as 30,000 of these roles will be slashed, a relatively small percentage of Amazon’s mammoth global workforce but almost 10% of its corporate employees. It would be Amazon’s largest job reduction drive since 2022, when it eliminated about 27,000 positions.

Email notifications to impacted staff members will be sent out beginning Tuesday morning, Reuters said.

Over the last two years, Amazon has been attempting to trim down the size of multiple divisions, such as podcasting, communications and devices, while CEO Andy Jassy has warned that more reductions could be on the way because of the increased use of artificial intelligence tools.

This round of cuts could affect several units, including the Amazon Web Services cloud business, the report said.

Gold slips

Gold prices retreated further on Tuesday after slumping below $4,000 per ounce in the previous session, as signs of easing U.S.-China trade tensions reduced bullion’s safe-haven appeal ahead of a closely-watched Federal Reserve meeting.

Spot gold was last down 1.6% at $3,915.67 an ounce, while U.S. gold futures declined 2.3% to $3,928.26/oz.

The yellow metal slipped over 3% to an over-two-week low on Monday. Prices have fallen about 10% from the record high of $4,381.29/oz reached just a week earlier.

"Even after [Monday’s] correction, gold is still up more than 50% this year, underpinned by strong ETF demand and central bank buying amid diversification," ING analysts said in a recent note.

"The recent price pullback could even be seen by some central banks as a chance to increase their holdings," they added.

Investors are now focused on the two-day Fed gathering, which begins later today and is expected to end on Wednesday with a 25 basis-point rate cut. While lower rates would typically boost gold by reducing real yields, much of the cut appears priced in, leaving limited upside for the metal in the near term.

Source: investing

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Adam

Stocks

OPENING CALL

U.S. futures pointed to a largely lower open Tuesday, losing ground on yesterday's record close, when optimism spurred by the prospect of easing trade tensions boosted bourses in the U.S. and across the world .

Trump, scheduled to be in Asia through Thursday, is due to meet South Korean President Lee Jae Myung on Wednesday, after pledging to usher a new era of trade with Japan.

He is still due to hold talks with his Chinese counterpart Thursday.

Saxo contends that though Washington and Beijing reached a framework trade deal, it represents a temporary easing of uncertainties . Key fault lines between the two countries remain unsolved.

"The trade truce simply buys time, not peace."

The Federal Reserve begins its two-day meeting during which policymakers are expected to agree to cut interest rates.

Allspring Global Investments said the Fed's forward guidance risks being mixed and could be mildly hawkish.

"We believe the market may be slightly over-optimistic about a December cut."

Elsewhere, there are signs the government shutdown might be approaching its end-- maybe by Thanksgiving --according to Jefferies.

"However, it is possible that the timeline gets brought forward," it said.

Earnings continue with results expected Tuesday from NextEra Energy, Regeneron Pharmaceuticals, PayPal and Royal Caribbean.

Stocks to Watch

Amazon shares traded 0.28% up after the company said it would layoff thousands of workers.

Bed Bath & Beyond shares rose 1.4% after reporting its results.

NextEra Energy rose 3.2% after Google said it would partner with the company to reopen a nuclear plant.

Novartis fell 3.3% in New York after results missed expectations.

Nvidia shares trade 0.1% lower. The company's chief executive is due to deliver a speech at 16:00 GMT on artificial intelligence at a company conference in Washington.

Whirlpool shares fell 1.5% despite reporting higher sales and adjusted earnings per share which topped expectations.

Watch For:

U.S. S&P CoreLogic Case-Shiller Home Prices Index for August

U.S. Conference Board Consumer Confidence for October

3Q earnings from: Mondelez International and United Parcel Service

4Q earnings from Visa Inc

The Federal Reserve's Open Market Committee meeting

Today's Top Headlines/Must Reads:

- How KFC Lost Fast Food's Chicken Crown-and How It Plans to Win It Back

- Private Lenders Aren't Out of the Doghouse Yet

- The Fight to Restore Chicago's Magnificent Mile to Its Glory Days

MARKET WRAPS

Forex:

The dollar fell against a basket of currencies after comments by Treasury Secretary Scott Bessent when meeting his Japanese counterpart Monday highlighted preventing excess exchange rate volatility.

Danske Bank said the comments, which also stressed the importance of sound monetary policy, serve as a reminder the Trump administration prefers a weaker dollar.

The yen , meanwhile, strengthened against the dollar and other G-10 and Asian currencies.

The euro rose against the dollar, with gains possibly in part driven by some compromise on the French budget, ING said. France's National Assembly adopted an amendment Monday that will raise taxes for the country's largest companies.

"That seems a drop in the ocean for the French budget--and not particularly positive for French growth--but investors may be more interested in compromise and a path toward a 2026 budget."

Sterling fell to a three-month low against the euro and fell against the dollar after the British Retail Consortium said U.K. food inflation eased in October.

"Sticky food inflation had been one of the factors preoccupying the Bank of England and delaying rate cuts," ING said separately.

Bonds:

Treasury yields declined as the government shutdown continued, leaving the market with access to limited data ahead of the Fed's rate decision on Wednesday. Among private sector data up for release, the Conference Board's consumer confidence print is scheduled.

The Conference Board data could give some guidance into labor market developments, SEB Research said.

"In the absence of official employment data, the ratio of respondents to 'jobs plentiful' and 'jobs hard to get' can signal the strength of the labor market, and has historically been a leading indicator of unemployment."

The Treasury was expected to hold its near-term borrowing projections roughly steady when it releases financing estimates on Nov. 3, Goldman Sachs said, estimating marketable borrowing of $596 billion for the fourth quarter, compared with $590 billion previously projected.

Allspring Global Investments said it felt 10-year Treasury yields were fairly priced at levels around 4%.

Metals:

Gold prices fell in early trading, holding below the $4,000 mark as optimism over a Trump-Xi meeting later this week dented demand for safe-haven assets.

"Signs of a U.S.-China trade deal were enough to trigger profit taking after the 26% rise achieved since the start of September," ANZ said. "Gold is likely to remain under pressure until the fast money that recently joined the market is washed out."

Copper prices fell despite market optimism surrounding U.S.-China trade talks and Anglo American saying production rates at its flagship Collahuasi plant in Chile will be broadly similar to 2025.

Energy:

Oil prices fell as investors weighed prospects of a global supply surplus, progress in U.S.-China trade negotiations and the impact of sanctions on Russian oil.

"The initial positive sentiment around U.S.-China trade talks faded as the oil market progressed through yesterday's trading session," ING said.

TODAY'S TOP HEADLINES

Chinese Auto Giant BYD Posts Fivefold Sales Surge in Europe

BYD logged a nearly fivefold surge in European sales last month, a sign of how customers in the region are increasingly warming to the Chinese auto giant's lineup of electric and hybrid vehicles.

New-car registrations for BYD models, a reflection of sales, almost quintupled on year to 24,963 vehicles in Europe last month, according to the European Automobile Manufacturers' Association, an industry body also known as ACEA. The figure includes data from the European Union as well as the U.K., Iceland, Liechtenstein, Norway and Switzerland. In the EU alone, BYD registrations more than tripled to 13,221 vehicles.

HSBC Quarterly Profit Falls on $1.1 Billion Hit From Madoff Lawsuit

HSBC Holdings reported a drop in third-quarter net profit, partly due to a $1.1 billion provision for a lawsuit tied to Bernie Madoff's multibillion-dollar Ponzi scheme.

The London-based bank said Tuesday that net profit fell 21% from a year earlier to $4.87 billion for the three months ended September. Pretax profit declined 14% to $7.3 billion.

Exxon Mobil Sues California Over Looming Climate Disclosure Rules

Exxon Mobil says rules requiring it to disclose climate risks infringe on the company's right to free speech.

The oil-and-gas giant made the argument in a suit filed Friday against the state of California, which is rolling out requirements for businesses to report their climate risks as well as greenhouse gas emissions. The climate risk reporting rule will come into effect in a matter of weeks.

Trump Considers Fed Chair Selection by Year-End From Slate of Five Finalists

President Trump said Monday that he might announce before year-end his pick to succeed Federal Reserve Chair Jerome Powell, whose term expires next May, and is on track to choose from five finalists.

Treasury Secretary Scott Bessent plans to conduct a second round of interviews with the current slate next month, before presenting an even shorter list of nominees to the president to consider.

South Korea's Economy Accelerated in Third Quarter

South Korea's economy accelerated at a stronger-than-expected pace in the third quarter, driven by government stimulus and exports' resilience despite tariff headwinds.

Gross domestic product rose 1.2% in the July-September period from the previous quarter, preliminary data from the Bank of Korea showed Tuesday. That followed a revised 0.7% expansion in the second quarter.

Why the odds of gas prices falling below $2 anytime soon are one in a million

Gasoline prices at the pump last week fell to their lowest average intraday price in four years, but still aren't likely to see a dip below President Donald Trump's $2-a-gallon target anytime soon.

The U.S. average retail price for regular unleaded gasoline has "extremely low odds - perhaps one in a million - of falling below $2" a gallon this year or next, based on current developments, Patrick De Haan, head of petroleum analysis at GasBuddy, told MarketWatch.

Gold Prices and Miner Stocks Keep Falling. That's a Surprise.

Newmont was falling again on Monday alongside a sustained pullback in the price of gold. Investors are dumping shares in gold miners following a torrid recent run for the precious metal.

Newmont stock dropped 4% to $79.40 in early trading, having plummeted 6.2% on Friday. Other gold miners were in the red, too: Agnico Eagle Mines fell 2.9%, Barrick Mining slid 2.7%, Wheaton Precious Metals fell 2.5%, and Franco-Nevada was down 2.5%. The S&P 500 gained 0.9%, boosted by hopes of a U.S.-China trade deal.

Union Pressures Democrats to End Government Shutdown

WASHINGTON-The nation's largest federal workers' union called for Congress to end the shutdown, now in its fourth week, putting new pressure on Senate Democrats who have repeatedly blocked a Republican measure that would reopen the government.

"It's time to pass a clean continuing resolution and end this shutdown today," said Everett Kelley, president of the American Federation of Government Employees, or AFGE, which represents more than 800,000 employees, referring to a short-term spending bill.

Source: morningstar

Risk Warnings and Disclaimers

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Warren Takunda

Stocks

London stocks were flat by midday on Tuesday as investors eyed the latest policy announcement from the US Federal Reserve and a raft of key US tech earnings, but HSBC gained on well-received results.

The FTSE 100 was steady at 9,659.11.

Russ Mould, investment director at AJ Bell, said: "Results from some of the big names which dominate the US market will likely dictate whether the market can extend its recent momentum into November as will the Federal Reserve’s latest decision on interest rates tomorrow.

"A cut is widely expected but, with most US data releases paused thanks to the shutdown in Washington, the Federal Reserve’s ability to make an informed decision is impaired."

Wednesday will be a big day on the US corporate front, with quarterly earnings due from Microsoft, Meta and Alphabet.

Derren Nathan, head of equity research at Hargreaves Lansdown, noted: "Together, their shares represent around $9 trillion of global stock market value."

On home shores, the latest figures from the British Retail Consortium and NielsenIQ showed that increased competition among retailers and widespread discounting resulted in a slowdown in UK shop price inflation in October.

Shop prices were up 1.0% year-on-year in October, with growth slowing from 1.4% in September, the BRC-NIQ Shop Price Monitor showed.

Non-food prices fell by 0.4%, following a 0.1% fall in September, while food inflation eased to 3.7% from 4.2%, as a pickup in fresh food inflation to 4.3% from 4.1% was offset by a sharp drop in ambient food inflation to 2.9% from 4.2%.

"Easing global sugar prices helped to bring down prices of chocolate and confectionary, a treat for those preparing Halloween parties," said BRC chief executive Helen Dickinson. "Beyond food, discounts came early to electricals and health and beauty, as retailers started promotions ahead of Black Friday month."

Dickinson said that, ahead of the Budget announced in late-November, the government needs to relieve cost pressures on both consumers and retailers.

"Labour’s promised business rates reform must deliver a meaningful cut to retailers’ rates bills, and ensure that no store pays more. Rising employer National Insurance Contributions and a new packaging tax have directly contributed towards rising inflation, according to the Bank of England. Adding further taxes on retail businesses would inevitably keep inflation higher for longer," she said.

In equity markets, Airtel Africa jumped to the top of the FTSE 100 after it posted a sharp increase in half-year core earnings on the back of surging revenues and an increase in customer numbers.

HSBC was also in the black as it reported a fall in third-quarter profits as a $1.1bn legal charge weighed on the bottom line, but lifted its guidance for 2025 net interest income to $43bn "or better", from $42bn.

Russ Mould said: "Having got the bad news out of the way early, with yesterday’s revelation of a provision linked to Bernard Madoff’s Ponzi scheme, HSBC had some good news to deliver to investors with its third-quarter update.

"While the Madoff-linked hit saw profit come in below expectations at a headline level, on an underlying basis the business is performing well and, crucially, somewhat better than the market was expecting.

"A key metric for any bank is net interest income - the difference between what the bank pays out to savers and receives from borrowers in interest - so the boost to guidance here and double-digit quarterly growth are significant."

BAE Systems gained after it said late on Monday that it expects to recognise around £4.6bn from a UK government agreement with Turkey for the purchase of 20 Typhoon aircraft and an associated weapons and integration package.

On the downside, housebuilders Barratt Redrow and Berkeley lost ground amid reports that chancellor Rachel Reeves could announce a 1% annual levy on homes worth more than £2m in the upcoming Budget.

Bodycote slumped after JPMorgan trimmed its price target on the stock to 600p from 610p and lowered estimates.

Source: Sharecast

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James Whitman

Political

Economic

Japan and the US unveiled a list of potential projects for their $550 billion US investment vehicle, providing a first look into what specific proposals could be funded by the mechanism that's a key part of the two countries' trade deal.

At a signing ceremony Tuesday in Tokyo, US Commerce Secretary Howard Lutnick outlined many of the highest-profile commitments. The corporate names included SoftBank Group, Westinghouse and Toshiba Corp., and the size of the potential projects ranged from $350 million to as much as $100 billion.

A fact sheet released by Japan's trade ministry Tuesday detailed other Japanese companies interested in launching projects in areas ranging from energy and AI to critical minerals.

"You're at the beginning. You are it. You are the foundation. And this is really, really exciting," Lutnick said at the event.

The announcements were intended to flesh out a framework trade agreement reached earlier this year, where Trump lowered and capped tariffs on Japanese goods in exchange for a pledge for Japan to fund $550 billion in US projects.

One of the documents said Trump and newly installed Prime Minister Sanae Takaichi "confirmed their strong commitment to implementing this GREAT DEAL" — both an acknowledgment the pact is proceeding under the new prime minister and that it's still being hashed out.

Trump has previously cast the $550 billion as money that his administration could "invest as we like," with 90% of the profits being given to the US. Japan has described the pledge as a combination of investments, loans and loan guarantees, characterizing it as a way to back up Japanese firms' US projects.

"Japan will continue to strive for the sincere and prompt implementation of the agreement with the US," said Japan's new trade minister, Ryosei Akazawa. "Through this, we intend to promote the mutual interests of Japan and the US, expand cooperation aimed at ensuring economic security, and foster Japan's economic growth."

Trump earlier in the day said, "I want to thank Japan because they're making big investments into the United States," speaking aboard the USS George Washington in Yokosuka, south of Tokyo. "They're a big investor into our country and we like that," he said, adding that Takaichi told him Toyota Motor Corp. would put plants all over the US "to the tune of over $10 billion."

'Launch Phase'

Toyota wasn't mentioned in the trade ministry's fact sheet, and it wasn't clear what he was referring to or whether that project could tap into funding from the joint program.

In an interview, Lutnick said the pledges — which total up to nearly $490 billion — are in a "launch phase," with preliminary work on projects that would then be considered for funding from the $550 billion program.

"They'll do the precision work, and it'll go through the process with the Japanese consultation committee, the investment committee, and the president will give it the green light, and then they'll start to put shovels in the ground," he said. "I would expect that to take months, but not more than months."

Energy-related projects appeared to loom large in the list in terms of total scale of business. Westinghouse's construction of AP1000 nuclear reactors and small modular reactors was expected to be worth up to $100 billion, involving Japanese suppliers and operators including Mitsubishi Heavy Industries. Another small modular reactors project that could involve GE Vernova / Hitachi was framed as also being worth up to $100 billion.

"These are great companies, many of them household names — that you would expect — that are going to build infrastructure and improve the national economic security of the United States," Lutnick said, adding that other projects can be considered.

"We look forward to engaging with other companies that wish to provide that same sort of foundational position. We're going to be examining shipbuilding, pipelines, there'll be an enormous number of other critical minerals. There are a whole variety."

The US will be making the final decision on which projects will make the cut into the investment fund, though Japan is also expected to have some say. Trump retains the option to reinstate higher tariffs if Japan fails to fund his picks of investment projects.

"These companies were discussed and fully vetted with the Japanese," Lutnick said. "This is not outside of their purview," he said. "This is just the process of doing the work."

The fund aims to advance economic and national security interests by investing in semiconductors, pharmaceuticals, metals, critical minerals, shipbuilding, energy, artificial intelligence and quantum computing, according to a memorandum of understanding between the two countries.

The fund was a key element behind the July trade deal that lowered US duties from 27.5% to 15% on Japanese cars. The US also set levies on many other goods at the same level.

Source: Bloomberg

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Justin

Forex

Political

Economic

Strengthening trade and investment cooperation, while addressing key regional issues, was at the forefront of discussions between Prime Minister Datuk Seri Anwar Ibrahim and Chinese Premier Li Qiang during their bilateral meeting here on Tuesday morning.It was understood that the 15-minute closed-door discussion touched on regional issues, with China expressing support for peace efforts regarding the Cambodia-Thailand border situation and the ongoing crisis in Myanmar.

Both leaders also discussed a wide range of initiatives aimed at enhancing trade and investment, particularly in the automotive and high-technology sectors, including the development of the Automotive High-Tech Valley in Tanjung Malim.The meeting covered infrastructure connectivity, including the expansion of the East Coast Rail Link from Kota Bharu to Rantau Panjang, as well as collaboration in critical areas such as rare earth elements, the Perak-Penang water pipeline project and the halal industry.Additionally, tourism cooperation and people-to-people knowledge exchanges were also highlighted, along with efforts to enhance air connectivity by attracting more cargo flights from China to the Kuala Lumpur International Airport.

The two leaders also discussed semiconductor industry collaboration and reaffirmed support for the Asean Power Grid (APG) initiative.As the Asean chair, Malaysia welcomes China's participation in advancing the APG to promote sustainable energy cooperation across the region.Regarding the digital economy, Malaysia is inviting leading Chinese technology companies to expand their local presence and investments while encouraging new Chinese firms to establish regional operations here.

Earlier, Anwar, in his opening remarks, said, "Many times your visit to Malaysia and my visit to China, and I appreciate your participation; it means a lot for Malaysia and Asean. I think we will focus on the bilateral issue today (Tuesday)."And thank you for the invitation, President Xi Jinping, for the 80th anniversary of China, and I hope to meet up with him in South Korea in the next few days," he said.Also present were Foreign Minister Datuk Seri Mohamad Hasan, Minister of Investment, Trade and Industry Tengku Datuk Seri Zafrul Abdul Aziz, Deputy Investment, Trade and Industry Minister Liew Chin Tong, and Transport Minister Anthony Loke Siew Fook.

China's Li also attended the signing ceremony of the Asean-China Free Trade Area (ACFTA 3.0) upgrade, followed by the 28th Asean-China Summit on Tuesday morning.Malaysia, which holds the Asean chairmanship this year under the theme of "Inclusivity and Sustainability", is hosting the 47th Asean Summit from Oct 26 to 28, Sunday to Tuesday.The event brought together more than 3,000 delegates and leaders from over 30 countries and international organisations to enhance regional engagement and cooperation.

Source: Theedgemarkets

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Gerik

Economic

Sanctions Trigger Early Disruption, But May Not Be Decisive

Trump’s October 22 sanctions are designed to inflict economic pain by targeting Lukoil and Rosneft, responsible for half of Russia’s oil exports. The response has been immediate: India’s Reliance and Indian Oil Corporation, as well as China’s major state-owned oil firms, have reportedly started canceling orders. This shows an initial phase of "self-sanctioning" to avoid fallout from potential secondary sanctions, which threaten their access to the U.S. financial system.

Yet this is not the first time Russian oil has faced sanctions, and past patterns suggest a return to covert trading routes may be imminent. Analysts anticipate that both Indian and Chinese buyers will seek ways to circumvent restrictions via intermediaries and use Russia’s growing “shadow fleet”, a network of nearly 1,000 tankers operating outside Western oversight to maintain supply chains.

Asia Holds the Key, But Motivation Differs

India and China, accounting for up to 4.5 million barrels per day of Russian crude imports, are the critical variables in the success or failure of this sanctions policy.

For India, the dilemma is stark. New Delhi has benefited from discounted Russian oil since the Ukraine war began, but faces pressure from its Quad partner, the U.S. This comes at a delicate time as India is negotiating a trade deal with Washington, potentially securing vital export benefits in exchange for geopolitical alignment. The Modi government may adopt a temporary compliance strategy slashing visible imports from sanctioned entities while covertly sourcing Russian oil through layered transactions.

China, meanwhile, will be harder to pressure. While its state-owned giants may pause or reduce purchases for now, Beijing is unlikely to fully abandon Moscow. China’s market opacity and its strategic imperative to counterbalance U.S. power suggest it will remain a core buyer. Smaller refineries (or “teapots”) in China are also expected to quietly keep importing Russian oil through third parties, even if volumes are reduced.

Shadow Fleet and Middlemen: The Built-In Loophole

Russia’s preemptive investment in a shadow tanker fleet has paid off. With over 940 ships now classified as part of this fleet, and previous experience navigating Western sanctions, Russia’s logistics infrastructure is arguably sanctions-proof though at a significant cost. Oil laundered through third parties fetches lower prices and involves higher risks, ultimately shrinking Moscow’s revenue even if exports persist.

Moreover, the logistical hurdles of insurance, reflagging, and longer shipping routes make these operations expensive and difficult to scale, especially if the U.S. ramps up enforcement.

Pressure Building, But Revenue May Flow At a Discount

Ultimately, the effectiveness of Trump’s sanctions will depend less on immediate cancellations and more on enforcement mechanisms post-November 21. If Washington aggressively targets intermediaries and the shadow fleet, Russian revenues may sharply fall. However, if Asian buyers resume flows via grey-market channels, the impact could be more symbolic than substantial.

What’s certain is that the cost of doing business for Russia has gone up. Its oil may still find buyers, but only through riskier, pricier, and more opaque routes cutting into the Kremlin’s budget even if barrels keep flowing.

Trump’s sanctions have succeeded in triggering short-term compliance and creating uncertainty in global oil flows. But whether they deliver a decisive economic blow to Moscow depends on how much enforcement muscle Washington is willing to flex and how far India and China are willing to go in balancing strategic priorities against cheap energy needs.