HONG KONG: Oil prices extended gains Monday as Israel and Iran pounded each other with missiles for a fourth day and threatened further attacks, stoking fears of a lengthy conflict that could reignite inflation.

Gold prices also rose back toward a record high thanks to a rush into safe havens, but equities were mixed amid hopes that the conflict does not spread through the Middle East.

Investors were also gearing up for key central bank meetings this week, with a particular eye on the US Federal Reserve and Bank of Japan, as well as talks with Washington aimed at avoiding Donald Trump’s sky-high tariffs.

Israel’s surprise strike against Iranian military and nuclear sites on Friday — killing top commanders and scientists — sent crude prices soaring as much as 13 percent at one point on fears about supplies from the region.

Analysts also warned that the spike could send inflation surging globally again, dealing a blow to long-running efforts by governments and central banks to get it under control and fanning concerns about the impact on already fragile economies.

“The knock-on impact of higher energy prices is that they will slow growth and cause headline inflation to rise,” said Tony Sycamore, a market analyst at IG.

“While central banks would prefer to overlook a temporary spike in energy prices, if they remain elevated for a long period, it may feed through into higher core inflation as businesses pass on higher transport and production costs.

“This would hampercentral banks’ ability to cut interest rates to cushion the anticipated growth slowdown from President Trump’s tariffs, which adds another variable for the Fed to consider when it meets to discuss interest rates this week.”

Both main oil contracts were up around one percent in Asian trade.

But Morningstar director of equity research Allen Good said: “Oil markets remain amply supplied with OPEC set on increasing production and demand soft. US production growth has been slowing, but could rebound in the face of sustained higher prices.

“Meanwhile, a larger war is unlikely. The Trump administration has already stated it remains committed to talks with Iran.

“Ultimately, fundamentals will dictate price, and they do not suggest much higher prices are necessary. Although the global risk premium could rise, keeping prices moderately higher than where they’ve been much of the year.”

Tokyo closed 1.3 percent higher, boosted by a weaker yen, while Hong Kong reversed early losses and Shanghai, Seoul, Singapore and Wellington also advanced.

Taipei, Jakarta and Manila retreated while Sydney was flat.

London, Paris and Frankfurt were all higher in early trade.

Gold, a go-to asset in times of uncertainty and volatility, rose to around $3,450 an ounce and close to its all-time high of $3,500.

There was little major reaction to data showing China’s factory output grew slower than expected last month as trade war pressures bit, while retail sales topped forecasts.

Also in focus is the Group of Seven summit in the Canadian Rockies, which kicked off Sunday, where the Middle East crisis will be discussed along with trade in light of Trump’s tariff blitz.

Investors are also awaiting bank policy meetings, with the Fed and BoJ the standouts.

Both are expected to stand pat for now but traders will be keeping a close watch on their statements for an idea about the plans for interest rates, with US officials under pressure from Trump to cut.

The Fed meeting “will naturally get the greatest degree of market focus,” said Chris Weston at Pepperstone.

“The Fed should remain sufficiently constrained by the many uncertainties to offer anything truly market-moving and the statement should stress that policy is in a sound place for now,” he added.

In corporate news, Nippon Steel rose more than three percent after Trump on Friday signed an executive order approving its $14.9 billion merger with US Steel, bringing an end to the long-running saga.

RIYADH: Saudi utility giant ACWA Power is moving forward with its SR7 billion ($1.8 billion) capital increase as part of a broader strategy to expand its footprint in energy transformation, water desalination, and green hydrogen production, according to its chief financial officer.

In an interview with Al-Ekhbariya, Abdulhameed Al-Muhaidib described the capital raise as a critical step to reinforce the company’s leadership both domestically and internationally in sustainable infrastructure.

ACWA Power’s investment portfolio currently stands at around SR400 billion, encompassing over 78 gigawatts of production capacity and more than 9.5 million cubic meters per day in water desalination capacity. In line with long-term objectives, the company’s board approved a plan two years ago to triple assets under management to over SR937.5 billion by 2030.

The initiative also aligns with Saudi Arabia’s national goal of achieving a balanced energy mix by 2030, targeting an equal split between gas and renewable sources for electricity generation.

“The company decided to increase its capital through a rights issue rather than expanding into debt markets, with the aim of strengthening its financial position and enhancing credit flexibility. A large portion of the proceeds will be used to expand its project portfolio both inside and outside the Kingdom,” said Al-Muhaidib.

He noted that 60 percent of ACWA Power’s current investments are located in the Kingdom, with the remaining 40 percent spread across international markets. Between 75 percent and 85 percent of the new capital will be allocated to greenfield projects, while acquisitions will account for no more than 20 percent.

“ACWA Power’s infrastructure projects rely primarily on debt, with shareholders’ equity covering 20 percent to 25 percent of the financing structure. The company will continue this financing strategy while maintaining net debt at approximately SR20 billion, despite the significant growth expected through 2030,” he added.

Highlighting the company’s geographical expansion, Al-Muhaidib said ACWA Power added new projects worth SR34 billion in 2024 across Saudi Arabia, Egypt, Azerbaijan, Uzbekistan, and China.

He also pointed out the firm’s active presence in China, with more than 90 employees based in its Shanghai office to support growth in that market.

ACWA Power successfully achieved nine financial closings in 2024, amounting to SR34.6 billion. The CFO said a dedicated internal team has been established to streamline project execution from inception to operation.

He confirmed that the Capital Market Authority has approved the capital increase, with the final offering price set to be announced during the company’s general assembly on June 30.

“Seventy-seven percent of shareholders have submitted their subscription pledges,” Al-Muhaidib noted, adding that the high participation rate underscores investor confidence in the company’s long-term strategy.

ACWA Power reported a net profit of SR1.75 billion in 2024, a 5.74 percent increase year on year, according to a Tadawul filing issued in February. The gain was attributed to higher revenues from operations and maintenance, increased electricity sales, and improved earnings from equity-accounted investees, capital recycling, and net finance income.