The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
BP increased its dividend and extended its share repurchasing programme on Tuesday as it reported a forecast-beating second-quarter profit of US$2.76 billion (RM12.75 billion). This profit was bolstered by stronger oil prices and retail performance, despite weak refining.
The results are expected to ease pressure on CEO Murray Auchincloss, who has been focusing on the most profitable operations, primarily in oil and gas, since taking office in January. This marks a shift from former CEO Bernard Looney’s strategy of expanding renewables and reducing fossil fuel output. BP has greenlit the development of the Kaskida oilfield in the US Gulf of Mexico and a low-carbon hydrogen project at its Castellon refinery in Spain.
Key Takeaways:
- Dividend Increase: BP raised its dividend by 10% to eight cents per share, in line with analysts' expectations.
- Share Buyback: The company maintained its share buyback programme at US$1.75 billion for the next three months and committed to buying a total of US$14 billion of shares this year and next.
- Profit Details: BP reported a second-quarter profit of US$2.76 billion, surpassing the forecast of US$2.54 billion. This compares to a US$2.7 billion profit in the previous quarter and US$2.6 billion a year earlier.
- Weak Refining: Weaker refining margins due to lower diesel demand and higher refinery maintenance were offset by higher oil and gas prices and a lower than expected tax rate.
- Stock Performance: BP shares rose 1.85%, outperforming the broader European energy index.
- Cost Reduction: BP is working to exceed its target of reducing annual costs by US$2 billion by the end of 2026.
CEO Auchincloss emphasized the company's focus on reducing costs and building momentum towards its 2025 targets. Despite weak refining margins, global demand for gasoline and diesel is expected to support refining margins during the summer driving season.
BP will maintain capital expenditure at US$16 billion per year in 2024 and 2025.
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