Power Play: investing in the new electricity era
Globally, demand for electricity is rising faster and more markedly than we have seen in years. Not because the population is growing substantially, but because our modern economy needs more and more electricity. At the same time, supply is colliding with an unexpected bottleneck: the electricity grid itself. What does that mean for the economy, for companies ... and ultimately for investors?
Mark Van Assche, account manager Private Banking and Wealth Office, talks about it with Heng-Ta Quach, CRM at KBC Asset Management.
26/02/2026
How are investors reacting?
Volatility on the stock markets is increasing
- Uncertainty about the duration and intensity of the conflict in the Middle East is weighing on investor sentiment.
- Investors are wondering how high energy prices will climb in the wake of the Iran conflict. Expensive energy prices eventually trickle down into inflation, which explains the gradual rise in the market rate for bonds.
- The first cracks are starting to appear in share prices after a very strong start to the year. If energy infrastructure suffers major damage, there is a risk of greater economic consequences that last for longer.
What happened in the world?
Easing of Iran conflict not yet in sight
- The conflict in Iran enters its fourth week, with diverging messages about a possible deal and ceasefire.
- The global economy is still growing, but growth is clearly lower than in recent years.
- In the US, the combination of slower job growth, shrinking savings buffers and higher import tariffs is weighing on household purchasing power. There are no predictions of a recession, but a cooling is expected.
- Inflation is a mixed picture. In Europe, inflation stabilised around the ECB target of roughly 2%, while inflation in the US is slightly higher. The recent climb of oil and gas prices due to tensions in the Middle East has not yet impacted official figures.
- Brent is again under its peak but still above 100 USD per barrel. Several countries are deploying strategic oil reserves to ease pressure on the economy, but so far this has had little effect. At the same time, major economies are enacting policies to boost growth. These include additional stimulus measures in China and specific investment plans in the euro area.
- The ECB and the Fed are holding their key rates steady for the time being. A policy rate cut is no longer within expectations.
- In recent months, concerns have surfaced about private loans from lenders other than the traditional banks.
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