Emerging Markets Daily - April 13
Oil 'Supercycle' Unlikely, Baidu Shares Slump in Hong Kong, Russia-Ukraine Tensions Guide, Ant Group Takes Another Blow, Ecuador Bonds Rally After Banker Wins Election, Top Ten Muslim Populations
The Top 5 Emerging Markets Stories from Global Media - April 13
Oil ‘Supercycle’ Not on the Cards
Arab News
“Oil is unlikely to hit $100 per barrel on a sustainable basis in the near future, according to experts at the Oxford Institute for Energy Studies (OIES), a prestigious UK-based think tank.”
“In a report prepared by Bassam Fattouh and Andreas Economou of the OIES, the likelihood of an imminent oil ‘supercycle’ — suggested by some commodities analysts — is downplayed because of the absence of key factors that might spark a surge in the price of crude.”
“Rather, oil will trade in a range of $59-$69 per barrel until the end of 2022, the authors said. ‘Sentiment could push prices beyond these boundaries, but they are not likely to be sustainable. For prices to reach anywhere close to $100/b, we need to consider other shocks,’ they added. Frank Kane reports
Baidu Shares Slump in Hong Kong After Jumbo IPO Last Month
South China Morning Post
“The startling slump in Baidu since its secondary listing in Hong Kong is giving analysts a tough time in justifying their bullish buy calls, as the stock trailed market expectations by the widest margin in almost a decade.
“Shares of China’s dominant internet search-engine operator and challenger to Google have declined 17 per cent since they started trading on March 23, the worst among new jumbo listings in the city this year. Its American depositary receipts (ADR) have also lagged behind tech peers on Nasdaq this year.”
“Its problems lie beyond the margin calls on Archegos Capital Management, whose US$20 billion-odd of investment holdings included Baidu and other Chinese tech stocks. Its underperformance mirrored caution surrounding its increasingly challenging business outlook and looming stock overhang.” Zhang Shidong reports
Geopolitics: Quick Guide to Russia-Ukraine Military Tensions
BBC
“Sabre-rattling or preparations for war? Since mid-March, there have been many warnings from Ukraine and Western governments that Russia is massing troops in Russian-annexed Crimea and around the eastern Ukraine conflict zone.”
“Multiple sources have reported large Russian military movements towards the eastern Ukraine border and into Crimea, which Russian forces annexed from Ukraine in March 2014. Many of these reports have appeared on Twitter, such as a Jane's intelligence analyst's tweets about Iskander short-range missiles.”
“In February, Ukraine's President Volodymyr Zelensky imposed sanctions on Viktor Medvedchuk, a powerful Ukrainian oligarch and friend of President Putin. Ukraine also banned broadcasts by three pro-Russian TV stations.”
“Some speculate that Mr Putin also wants to test US President Joe Biden, who has taken a tougher stance on Russia than his predecessor, Donald Trump, had.”
“President Zelensky has urged Nato to speed up Ukrainian membership; but the conflict makes it difficult for Nato to accept Ukraine under the 30-nation alliance's current terms.” Laurence Peter reports
Jack Ma’s Ant Group Bows to Beijing With Company Overhaul
The Wall Street Journal
“Ant Group Co., the financial-technology giant controlled by billionaire Jack Ma, will apply to become a financial holding company overseen by China’s central bank, overhauling its business to adapt to a new era of tighter regulation for internet companies.”
“In a statement, the People’s Bank of China said Ant representatives were summoned to a meeting Monday with four regulatory agencies that also included the country’s banking, securities and foreign-exchange overseers. It said a “comprehensive, viable rectification plan” for Ant has been formulated under the regulators’ supervision over the past few months.”
“The directive follows an intense regulatory assault on Mr. Ma’s business empire that began with the suspension of the company’s blockbuster initial public offering in November. Ant had been on track to sell more than $34 billion worth of stock and list on stock exchanges in Hong Kong and Shanghai, when Beijing pulled the plug on the deal after Mr. Ma criticized financial regulators in a public speech.” Jing Yang reports
Ecuador Bonds Rally After Banker Wins Presidency
Bloomberg
“Ecuadorean bonds rallied after career banker Guillermo Lasso won the presidential election with a late surge in support, calming investors who thought his opponent was likely to lead the default-prone country into insolvency once again.”
“Lasso beat out economist Andres Arauz, a left-wing protege of former President Rafael Correa, by a solid margin in Sunday’s runoff vote. Arauz, who conceded defeat, won February’s first round by 13 percentage points.”
“It was a massive relief for bondholders, who bid up the country’s benchmark notes to their biggest gain since they were restructured just eight months ago. Ecuadorean debt had been trading at levels that signaled broad investor skepticism amid worry that a victory for Arauz would lead to unsustainable levels of social spending and an inevitable default from a politician who promised to prioritize the poor over the powerful.”
“Lasso, a 65-year-old self-made millionaire and father of five, was largely seen as representing the establishment, having vowed to uphold a $6.5 billion financing agreement with the International Monetary Fund and to keep up payments on the country’s overseas bonds. In his victory speech Sunday evening, Lasso said he will work to create “the prosperity we all long for.” Stephan Kueffner and Sydney Maki report.
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And…Ramadan Kareem to all our Muslim friends out there, as the holy month of Ramadan begins.
We also begin launching our regular Top Ten lists here at Emerging World with a Muslim populations theme. Here’s a quick look at the ten most populous Muslim populations around the globe (and their estimated increases by 2060):
The Top Ten Largest Muslim Populations
Indonesia - 231 million (253 million)
India - 207 million (333 million) (Note: roughly 15% of the population is Muslim)
Pakistan - 203 million (284 million)
Bangladesh - 154 million (182 million)
Nigeria - ~100 million (283 million) (Note: roughly 50% of Nigerians are Muslim)
Egypt - ~87 million (124 million)
Iran - 82 million (83 million)
Turkey - 74 million (88 million)
Algeria - 43 million (65 million)*
Iraq - 39 million (94 million)
By 2060, Algeria is projected to fall out of the Top 10 largest Muslim populations, with Afghanistan entering the Top Ten with a projected 82 million people from a population of roughly 39 million today.