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Emerging Markets Daily - April 16
China Posts Record 1Q Growth, India Unicorns Rising, US Hits Russia With New Sanctions, Qatar Stocks Surge on Foreign Ownership Rules Shift, Vietnam's Bamboo Airways Eyes U.S IPO + #NigeriaLostTwitter
The Top 5 Emerging Markets Stories from Global Media - April 16
China Economy Grew At Record 19% in 1Q: Reuters Poll
The Star of Malaysia/Reuters
“China’s economy likely grew at record pace of 19% in the first quarter, rebounding from a pandemic slump early last year as demand recovered at home and abroad and as policy support for ailing smaller firms continued, a Reuters poll showed.”
“While the reading will be heavily skewed by the plunge in activity a year earlier, the expected jump would be the strongest since at least 1992, when official quarterly records started, according to the median forecasts of 47 economists polled by Reuters.”
“It would also signal the world’s second-largest economy has continued to gain momentum, after a 6.5% expansion in the last quarter of 2020. China managed to largely bring the Covid-19 pandemic under control much earlier than many countries as authorities imposed stringent anti-virus curbs and lockdowns in the early phase of the outbreak.” The Star of Malaysia/Reuters report.
India Food Delivery Start-Up Attracts $450 Million from SoftBank
“SoftBank Group Corp. is investing in Swiggy at a $5.5 billion valuation, the second funding for the Indian food delivery startup in as many weeks as capital floods the world’s fastest growing internet arena.”
“The $450 million funding came from Masayoshi Son’s Vision Fund 2, a person familiar with the matter said…Bangalore-based Swiggy competes with multiple food delivery startups including fellow unicorn Zomato, backed by Ant Group Co. and Tiger Global, and the food delivery arm of Amazon.com Inc’s India unit, which recently unveiled its service to Prime members in dozens of zip codes in the city of Bengaluru.”
“Swiggy had closed an $800 million funding round from investors including Falcon Edge Capital LP and Goldman Sachs Group Inc. about a week ago. That financing punctuated a historic week for India’s technology industry, when in the space of four days, investors minted at least six new unicorns or startups with a valuation of $1 billion or more.”
“Global investors such as Tiger Global and South Africa’s Naspers Ltd. see growing opportunity in the country’s startup scene. The nation of 1.3 billion people has seen the rapid adoption of smartphones in recent years, explosive growth of inexpensive internet services and a new generation of ambitious entrepreneurs.”
“The venture investments are helping to diversify India’s industry, best known for tech services companies such as Tata Consultancy Services Ltd. and Infosys Ltd. A Credit Suisse Group AG report last month found there are about 100 unicorns in India with a combined market value of $240 billion, in sectors from e-commerce and fintech to education, logistics and food-delivery.” Saritha Rai reports.
Geopolitics: US Imposes Tough New Sanctions on Russia
The Financial Times
“US president Joe Biden has imposed sweeping new sanctions against Russia including long-feared measures targeting its government debt in a sharp escalation of Washington’s confrontation with Moscow.”
“The first anti-Russian measures from the Biden administration also include the expulsion of 10 Russian diplomats from the US and sanctions against 38 entities, individuals and companies accused of taking part in efforts to interfere in US elections and conduct cyber attacks.”
“On Wednesday, the US for the first time formally blamed SVR, Russia’s foreign intelligence service, for the SolarWinds hack, which affected at least nine federal agencies and 100 companies. One senior administration official told reporters the hack gave Russia ‘the ability to spy on or potentially disrupt more than 16,000 computer systems worldwide.’”
“News of the measures sparked a sell-off in Russian assets and a warning from the Kremlin that they would harm efforts to reduce tensions between the two countries. The fresh sanctions ban US financial institutions from trading in newly issued Russian state debt, known as OFZs, and bonds issued by the Russian central bank and National Wealth Fund. The ban affects debt issued after June 14.” The Financial Times reports.
Qatar Stocks Surge on New Rules Allowing Full Foreign Ownership
“Qatari stocks rose the most in a year after the country said it may allow foreign investors to fully own listed companies, a move that could trigger more than $1 billion of overseas inflows.”
“The cabinet approved a draft law that will allow overseas investors to own up to 100% of listed companies, according to the state-run Qatar News Agency. If the law is implemented, companies would have to individually approve the increased limit.”
“While implementation is yet to be confirmed, the decision could trigger inflows of about $1.5 billion into listed companies that would earn bigger representation in global benchmarks, according to estimates by investment bank EFG-Hermes. The QE Index gained 2.8% Thursday, the most in more than a year, to close at the highest level since Jan. 14.”
“Stocks that could benefit the most include Qatar Islamic Bank SAQ, Masraf Al Rayan QSC and the Commercial Bank of Qatar, the investment bank said. Their shares climbed 8.3%, 5.5% and 10% on Thursday, respectively, leading gains among members of the main gauge.”
“The gas-rich nation is following similar decisions by other Gulf countries as they seek to attract inflows from abroad. In 2019, the United Arab Emirates said it would allow foreigners to own 100% of businesses across industries and Saudi Arabia removed a cap on ownership of publicly traded companies for foreign strategic investors.” Filipe Pacheco and Simone Foxman report.
Vietnam’s Bamboo Airways Eyes US IPO With $4 Billion Market Cap
VN Express (Vietnam)
“Private carrier Bamboo Airways is considering an initial public offering of shares in the U.S. this year to raise $200 million. The IPO is expected to take place in the third quarter, with the company likely to offer a 5-7 percent stake to secure a market capitalization of up to $4 billion, Reuters quoted its chairman, Trinh Van Quyet, as saying on Wednesday.”
“It is preparing for the issuance together with an international auditing firm and plans to list on the New York Stock Exchange. Last month, Quyet had announced the airlines plans to list 105 million shares on either the Ho Chi Minh Stock Exchange or Hanoi Stock Exchange at an initial price of VND60,000 ($2.61), but on Wednesday he said that has now become ‘a backup plan.The US IPO will be part of our efforts to expand our services globally.’”
“It expected to operate charter flights to the U.S. from July this year and thrice-weekly commercial flights from HCMC to San Francisco from September. The airline has received a permit from the U.S. Department of Transportation to carry passengers and cargo to that country.”
“This year it also plans to expand its fleet from 30 aircraft to 40, and launch flights to other new destinations like Australia, Germany, Japan, and the U.K. if the Covid-19 pandemic is under control.” And Tu reports.
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What We’re Also Reading….
Nigerians Lament Twitter’s New Ghana Base as Lost Opportunity
“Nigerians have lashed out at their tech regulators after Twitter launched a recruitment drive in neighbouring Ghana. The company unveiled plans to build its first Africa team in Ghana on Monday, and will explore plans to open an office in the country.”
“The move is a blow to Nigeria, Africa’s largest tech hub, which hampers innovation with red-tape, limited access to finance and poor power supply, tech firms said on Twitter.”
“It’s no longer enough for Nigeria to just be a big market, said Flutterwave’s former managing director Iyinoluwa Aboyeji. ‘Next door is a very competitive neighbor, who’s doing all the right things to make itself the hub of West Africa. With the AFcFTA they can sit in Ghana and extract endlessly from us. How do we compete?’”
“Ghana’s population of 31m people has 8m social media users, while Nigeria has 200m people and 33m social media users, another user said, adding ‘we ban crypto. Kill small business. Oppress young people.’”
“Another tech and development consultant said: ‘Twitter going to Ghana instead of Nigeria is a sign of weak policies on emerging businesses and enabling environment for businesses to strive #NigeriaLostTwitter.’”
“Others defended the move, claiming remote positions would create jobs for techies across the continent. Twitter says it chose Ghana as an entry point due to the country’s strong democracy, freedom of speech, and its hosting of the headquarters of the African Continental Free Trade Agreement (AfCFTA), which started trading in January 2021.” African Business reports.
UAE signs lunar rover agreement with Japan
“The UAE has taken another major step forward with its space programme as the Mohammed Bin Rashid Space Centre (MBRSC) signed a contract today with Japan’s ispace, for payload delivery services for the ambitious Emirates Lunar Mission.”
“The ‘Rashid’ rover will be transported to the Moon on ispace’s lunar lander during the company’s ‘Mission 1’ in 2022 as part of its commercial programme known as ‘HAKUTO-R’.”
“Upon the execution of the mission, the UAE and Japan, together, are anticipated to be the next two nations to successfully put a spacecraft on the lunar surface, following the United States, Russia and China.” Arabian Aerospace reports