Geopolitical tensions, particularly new attacks from Iran on the UAE, are driving energy price shocks and significant market volatility, with the current conflict impacting oil more than the Russia-Ukraine war affected gas.
Experts are navigating uncertainty by moving beyond simple forecasts to sophisticated scenario analysis for commodity prices and by identifying investment opportunities created by market overreactions.
In Australia, a pre-existing inflation problem is expected to force the Reserve Bank to continue raising interest rates, a key anchor for domestic market analysis regardless of global events.
Australian M&A activity, while initially muted by a lack of confidence, is showing signs of recovery as dealmakers adapt to a 'new normal' of volatility, with Australia remaining an attractive destination for offshore buyers.
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Concerns Raised
Escalating geopolitical conflicts in the Gulf region impacting oil supply.
Persistent inflation in Australia requiring further interest rate hikes from the RBA.
High market volatility making corporate valuation difficult and dampening M&A confidence.
The potential for a prolonged period of uncertainty impacting consumer and business sentiment.
Opportunities Identified
Market volatility creating mispriced assets for active, fundamental investors.
Australia's status as a stable and attractive market for offshore M&A buyers.
A potential rebound in M&A as dealmakers accept volatility as the new normal.
Hedging portfolio risk through investments in commodity producers like oil companies.