Finance, in brief

Luiz Inacio Lula da Silva won a fourth term as Brazil's president on Sunday, with 51.79% of the vote to 48.21% for Flavio Bolsonaro, a right-wing senator. [2]

It is the first time since direct elections returned in 1989 that a candidate has won the runoff after losing the first round. [1]

Bolsonaro refused to concede and said he will ask for the result to be cancelled, because a Supreme Court judge who was once Lula's lawyer extended voting by two hours. [2][4]

Investors had bet on a Bolsonaro win since he led the first round three weeks ago. By Friday Brazilian shares were almost 7% higher and the real, Brazil's currency, nearly 5% stronger. [2]

They expected him to cut government spending, which would let interest rates fall. [1][2]

Overnight, the iShares MSCI Brazil ETF, a fund of Brazilian shares that trades in New York, fell nearly 20% before trimming the loss to 18%. [1][5]

Brazil's own share market had not yet opened. Luis Felipe Vital of Warren Investimentos, a Brazilian investment firm, expects a sharp sell-off and interest-rate bets to hit their daily limit soon after the open. [2]

Brazil's government debt reached 82.9% of a year's economic output in August, the highest since March 2021, by the central bank's count. [1]

Under 8% of the federal budget can be changed, because most spending is fixed by law, and Lula has promised faster rises in the minimum wage, which also lifts pensions. [3]

Brazil's central bank rate is 13.75%, and nearly 84 million Brazilians are behind on debt payments, says Serasa, a credit agency. [3]

Unemployment is at a record low and wages are rising faster than prices. [3]

Bolsonaro's Liberal Party and its allies are set to control both houses of Congress, and lawmakers there have repeatedly blocked measures that raise taxes. [3]

Why it matters. The first test is Monday's open in Sao Paulo, where Warren Investimentos expects interest-rate bets to hit their daily limit; UBS expects the mood to stay weak until Lula sets out a plan for the debt. [2]

Brent, the main world price for oil, fell 1.89% to $114.51 a barrel on Monday, and US crude fell 2.19% to $101. [7] Friday's jump had followed Houthi attacks on Saudi Arabia; the Houthis are an armed group in Yemen backed by Iran. [7] Over the weekend they said they targeted Riyadh's airport and oil sites, and Saudi Arabia said it shot down more missiles and drones. [7] Michael Alfaro of Gallo Partners, an investment firm, thinks fear of war adds about $20 to each barrel. [7]

Why it matters. He warns that a hit on Saudi Arabia's East-West pipeline could send prices sharply higher, but above $120 to $140 many buyers would use less. [7] On Friday the US government also authorised the release of up to 400,000 barrels from its emergency store for a Louisiana refinery. [7]

Shares of chip makers fell across Asia on Monday. [6] Japan's Nikkei index dropped 0.4%, as Tokyo Electron and Renesas, two Japanese chip firms, each lost more than 3%. [6] South Korea's Kospi fell 1%, and Hua Hong, a Chinese chip maker listed in Hong Kong, dropped more than 5%. [6] The falls followed a sell-off in US technology shares on Friday, on doubts that the huge spending on AI will earn its money back. [6]

Why it matters. Microsoft, Alphabet and Amazon report results this week, and so do about 550 of the roughly 1,200 companies in the MSCI Asia-Pacific index, a list of the region's big firms. [6] Their numbers will show whether data-centre spending is turning into profit. [6]

India's Sensex share index fell more than 600 points, nearly 1%, to 72,514.57 on Monday morning, and the rupee slipped to 94.96 to the US dollar. [8] AU Small Finance Bank fell more than 6%, even after a 53% rise in profit, and Ujjivan Small Finance Bank, which posted its highest ever quarterly profit of 365 crore rupees, fell too. [9] Infosys, one of India's biggest software firms, fell nearly 4% after cutting its sales forecast for the year. [10]

Why it matters. Madhu Lunawat of The Wealth Company, an Indian fund firm, told Mint that foreign investors stay cautious partly because the rupee lost 4-5% in a year. [26] Traders also wait for the US central bank's decision on Wednesday. [8]

Elon Musk said on Sunday that SpaceX has closed $40 billion of borrowing to buy graphics chips, the chips AI runs on. [11] The chips are due in the first half of 2027. [11] Bloomberg had reported the debt would sit in a separate company to keep it off SpaceX's own books. [11] Musk said lenders will hardly fund firms that earn almost all their money from AI data centres, and that most of the 200 or so 'neoclouds' will fail or merge. [12]

Why it matters. SpaceX can borrow because Starlink internet and rocket launches bring in money outside AI, Musk said. [12] Shares of CoreWeave and Nebius, two neocloud firms that rent out AI computing, are down about 37% and 30% in a month. [12]

Israel votes on Tuesday after three years of war in which its markets rose hard. [16] Tel Aviv shares are up 130% since October 2023, against 80% on Wall Street, and the shekel, Israel's currency, is up 25%. [16] Polls show neither Benjamin Netanyahu's bloc nor the opposition led by former army chief Gadi Eisenkot reaching the 61 seats needed to govern. [16] Bill Ackman, a US fund manager who with his wife owns 5% of the Tel Aviv Stock Exchange, said two far-right ministers should not serve in the next government. [17]

Why it matters. JPMorgan says the shekel could swing as much as 3% on the result, and IBI, an Israeli investment house, expects an opposition win to lift both the shekel and shares. [16] Foreign investors are still wary: the share of global funds holding Israeli shares is at a record low, Copley Fund Research data show. [16]

HSBC, Europe's second-biggest bank, has set aside about $400 million for possible loan losses in the Middle East in the first half of the year. [20] Its chief executive, Georges Elhedery, told The National the direct damage from the war to its business is very small. [20] The IMF, which lends to governments in trouble, expects Gulf economies to shrink 4.8% this year and grow 9.1% in 2027. [20] HSBC counts more than $190 billion of planned projects needing loans in the United Arab Emirates alone. [20]

Why it matters. He spoke before HSBC's quarterly results, and he sees lending for Gulf building projects as its next source of growth. [20] He also said the Strait of Hormuz may matter less within five years as Gulf states build ways around it. [20]

Sabic, the Middle East's biggest chemicals maker, earned 500 million riyals, about $133 million, from July to September. [18] It had lost 833 million riyals in the quarter before, because of the regional war, The National reported. [18] Revenue rose 14% from the quarter before to 28.17 billion riyals, though it was about 3% below a year earlier. [18] Saudi Aramco, the state oil company, owns 70% of Sabic, and a Houthi missile damaged Aramco's headquarters this month. [18]

Why it matters. Over nine months Sabic still lost 320 million riyals, far less than the 4.84 billion it lost a year before. [18] It also sold a plastics business in the Americas and Europe for $450 million. [18]

Adnoc, the United Arab Emirates' state oil company, told suppliers on Sunday what it will put out to bid in 2027. [19] The list includes offshore gas fields, an export gas pipeline and a project to get more oil out of fields already pumping. [19] It wants to be able to pump 5 million barrels a day by 2027, up from 4.85 million. [19] It also offered UAE makers more than 60 billion dirhams, about $16.3 billion, of orders for parts and goods through 2030. [19]

Why it matters. The UAE is widening its pipeline to Fujairah, a port beyond the Strait of Hormuz, so less oil has to pass through the strait. [19] Making parts at home cuts Adnoc's need for imports during the war. [19]

Traders' prices imply that the Bank of England, Britain's central bank, will raise its rate from 3.75% to 4.75% by the end of July. [21] Economists at ING and Deutsche Bank say that is too far, because dearer energy is not yet pushing up other prices quickly. [21] Sanjay Raja of Deutsche Bank says much of the pricing is extra pay traders want for uncertainty, and only about half a point of rises is really expected. [21] Deutsche expects 4.25% by February. [21]

Why it matters. The bets have risen and fallen with oil since the Iran war began. [21] Betting against them loses money while oil climbs, so few traders will, says James Smith of ING. [21]

SoftBank, the Japanese tech investor, plans $50 billion of investments in Malaysia, Prime Minister Anwar Ibrahim said on Saturday. [13] He said SoftBank's founder, Masayoshi Son, had picked sites in Kuching, in Sarawak on Borneo, and on the peninsula, for AI and data centres. [13] Earlier this month SoftBank signed a deal with Grab and Petroleum Sarawak to explore AI projects there. [13] Malaysia counted 385.7 billion ringgit, about $94 billion, of data-centre investment from 2021 to mid-2026. [13]

Why it matters. The figure dwarfs Google's $2 billion, Amazon's $6.2 billion and Microsoft's $2.2 billion plans in Malaysia. [13] SoftBank did not immediately reply to CNBC, so for now the figure comes from the prime minister. [13]

Ingenia Communities, an Australian owner of retirement villages and holiday parks, got a new takeover offer on Monday. [14] AVID Property Group offered A$5.35 a share in cash, about A$2.2 billion in all. [14] Ingenia gave AVID six weeks of talks on its own and shut out Warburg Pincus, a US private equity firm whose latest offer was A$5.25. [14] Ingenia's shares rose 5.5% to A$5.02 in morning trade. [14]

Why it matters. The board has not yet said AVID's offer beats its own plan to buy Peet, a land developer. [14] AVID wants to split off the holiday parks and hand them to Tasman Holiday Parks. [14]

A group of JetBlue's senior lenders is working with PJT Partners, a firm that advises on reworking debts, the Wall Street Journal reported on Friday. [15] JetBlue is a US airline whose shares are down 42% this year, closing at $2.62 on Friday. [15] At the end of June it had $1.66 billion of cash and $8.5 billion of debt and lease payments due. [15] Jet fuel costs have jumped with the Iran war. [15]

Why it matters. JetBlue is in the middle of an overhaul to cut costs and sell more premium seats. [15] It says it is confident the plan will return it to steady profit. [15]

Bust UK firms bought back by people tied to their old owners fail again far more often, a study for the Guardian found. [22] Turnstone Intelligence read papers on more than 1,700 administrations, a kind of insolvency, from 2019. [22] In a 'pre-pack', the sale is agreed before the firm goes under. [22] When the buyer was connected, 44% failed again by July 2026, against 26% with an outsider. [22] Where connected buyers paid in instalments, lenders without security, often including the UK tax office, got 1.58p in the pound. [22]

Why it matters. In one case, Andrew Woosnam bought back his failed recruitment firm for GBP 10,000 down and promised GBP 600,000 more that never came. [23] His bust companies now owe more than GBP 3 million, over GBP 1 million of it to the UK tax office. [23]

Companies linked to the United Arab Emirates own about 39% more land in Greater Manchester than in 2016, a Guardian analysis found. [24] Their land titles rose from 51 to 168, covering 101 hectares. [24] Two-thirds of that land belongs to companies of Sheikh Mansour, who owns Manchester City football club. [24] The count follows the club being found guilty of breaking football's money rules for nine years. [24]

Why it matters. Foreign investment in Greater Manchester rose 25% from 2015 to 2024, and the area drew almost GBP 2 billion from abroad in 2024. [24] Jonathan Silver, a University of Sheffield researcher, says leaning on Gulf money leaves the city exposed. [24]

Ramona Nee, chosen to lead Weil, Gotshal & Manges from January, has held talks to join Simpson Thacher, a rival, Semafor reported. [25] Weil is one of the main US law firms for company takeovers and debt rescues. [25] Its star dealmaker Michael Aiello already left for Cravath with a team, and merger talks with Willkie Farr broke down. [25] Weil declined to comment, and Nee's talks could still fail. [25]

Why it matters. Lawyers at the firm blame its leaders for failing to show how it will compete as AI and huge pay offers change top legal work. [25] Nee advises big private equity firms such as Advent, and a large part of Weil's Boston office could follow her. [25]