Emerging Markets Daily - April 28
India Unicorn Zomato Set to List in Mumbai, China Population Declines, India Oil Demand Cut, Aramco to Sell 1% Stake, New Egypt Bond Offering, Plus "By the Numbers" and Saudi-Iran Rapprochement?
The Top 5 Emerging Market Stories from Global Media - April 28
Indian Food Delivery Startup Zomato Files for $1.1 Billion Mumbai IPO
TechCrunch
“Indian food delivery startup Zomato on Wednesday filed for an initial public offering, ushering a new era for tech unicorn startups in the world’s second largest internet market after years of promising growth.”
“A lot is riding on Zomato’s eventual listing on Indian stock exchanges. A successful listing is poised to encourage nearly a dozen other unicorn Indian startups to accelerate their efforts to tap the public markets.”
“Indian startups have raised tens of billions of dollars in the past decade, but have so far been largely reluctant to tap the public markets. In recent years, successful listing by a handful of firms including IndiaMart, and mobile gaming firm Nazara has shown that investors in India do have strong appetite for tech stocks.” Manish Singh reports
China Population Declines, First Fall in Six Decades
Financial Times
“China is set to report its first population decline since the famine that accompanied the Great Leap Forward, Mao Zedong’s disastrous economic policy in the late 1950s that caused the deaths of tens of millions of people.”
“The current fall in population comes despite the relaxation of strict family planning policies, which was meant to reverse the falling birth rate of the world’s most populous country.”
“The latest Chinese census, which was completed in December but has yet to be made public, is expected to report the total population of the country at less than 1.4bn, according to people familiar with the research. In 2019, China’s population was reported to have exceeded the 1.4bn mark.”
“The people cautioned, however, that the figure was considered very sensitive and would not be released until multiple government departments had reached a consensus on the data and its implications.” Sun Yu reports.
S&P Global Platts Cuts India’s 2021 Oil Demand Forecast by 9%
Hellenic Shipping News
“S&P Global Platts has cut India’s 2021 demand forecast for oil products by 9 per cent to 400,000 barrels per day (b/d) now, as compared to 440,000 b/d estimated last month. The latest revision, S&P Global Platts said, was done after taking into account the surging Covid cases across the country that have triggered lockdowns and mobility curbs across key economic hubs in India.”
“With several states under lockdown, Platts believes India’s gasoline consumption is expected to drop in the near-term to around 700,000 barrels per day in April. ‘That’s down about 11 per cent from March. Hopes of recovery gaining traction are picked from June onwards,’ Platts said.” Hellenic Shipping News reports.
Saudi Aramco in Talks to Sell 1% Stake to Major Energy Company Within Two Years
The National
“Saudi Arabia is currently in talks to sell a 1 per cent stake in Saudi Aramco, the world's biggest exporting oil company, to a leading global energy company, the kingdom's crown prince said.”
“The potential new stake sale in the oil giant to international investors may happen within the next one or two years, Saudi Crown Prince Mohammed bin Salman said in an interview broadcast on state TV on Tuesday. The stake sale could be worth about $19 billion, according to Bloomberg estimates.” Deena Kamel reports
Egypt in New T-Bill Offer as It Returns to JP Morgan EM Bond Index
Al-Ahram
“Egypt is set to offer one-year term US-dominated treasury bills (T-bills) on Wednesday with a total amount of $975 million, the Central Bank of Egypt (CBE) announced on Monday. In February, the CBE issued a tender of US-dollar denominated T-bills with a total of $980 million, due on 8 February 2022.”
“In January, the CBE offered, in an auction, US-dominated T-bills worth $850 million in the same type. The proceeds of this kind of auctions are used to replenish Egypt’s net international reserves (NIRs).
“Egypt’s NIRs has started to recover from the severe impacts of the pandemic since June 2020, after it sharply declined to $38.2 billion in March – down from $45.1 billion. In March, Egypt’s NIRs continued its incremental rebound to reach $40.3 billion.”
“During April, JP Morgan announced that it is set to relist Egypt on its emerging-market government bond index (GBI-EM index) for emerging markets, which paves the way for the country’s capital markets’ reflation.”
“Egypt was removed from the index in June 2011 on the back of the economic and political instability the country witnessed amid the 25th January revolution, which eroded the country’s ability to meet its requirements.”
“Such a development comes in line with Egypt’s government efforts to reduce the cost of public debt as part of the country's economic reforms, according to finance minister Mohamed Maait”. Doaa A. Moneim reports.
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Emerging World Feature - By The Numbers - Trillions Edition
$370 Trillion - Total global stocks and bonds today.
$281 Trillion - Total global debt
$115 Trillion - The amount International Renewable Energy Agency (IRENA) estimates the world would need to invest in clean technologies through 2050 to limit global warming to 1.5 Degrees Celsius.
~$91 Trillion - Size of the global economy
~$77 Trillion - Total Emerging Markets Debt
~$42 Trillion - Total China Debt (roughly 3x its GDP)
~$19 Trillion - The size of world trade
~$8 Trillion - The market cap of the MSCI Emerging Markets Index, the leading EM equities benchmark
$3.2 Trillion - The GDP of the State of California (larger than the GDP of India)
$1.7 Trillion - Amazon’s Market Capitalization (Roughly equal to GDP of Canada)
Sources: JP Morgan, Ruchir Sharma (Morgan Stanley), Wall Street Journal, Institute of International Finance, WTO, Federal Reserve, MSCI, Charles Schwab, World Population Review
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What We’re Also Reading….
Geopolitics Spotlight: Saudi Crown Prince Takes Softer Line on Iran, Says He Wants ‘Good and Positive’ Relationship
Financial Times
“Crown Prince Mohammed bin Salman has said Saudi Arabia wants to resolve its differences with rival Iran, a marked shift in tone in the wake of the election of US President Joe Biden.”
“Prince Mohammed said in an interview on Saudi television that Riyadh did not want ‘the situation with Iran to be difficult’ and wanted to build a ‘good and positive relationship” with the Islamic republic. ‘We are working now with our partners in the region and the world to find solutions for these problems,’ he said. ‘At the end of the day, Iran is a neighbouring country. All what we ask for is to have a good and distinguished relationship with Iran.’”
“His comments late on Tuesday, come days after the Financial Times revealed that top Saudi and Iranian intelligence officials held secret talks this month in Baghdad in an effort to repair relations between the regional powerhouses. The rivals severed diplomatic ties five years ago.”
“Prince Mohammed, the kingdom’s day-to-day leader, has regularly railed against Iran, accusing the republic of stoking conflict in the Middle East and seeking to destabilise Saudi Arabia.” Andrew England reports.
Australia, Japan and India Form Supply Chain Initiative to Counter China
Bloomberg
“Japan, India and Australia’s trade ministers have met to officially launch the Supply Chain Resilience Initiative, following reports that the three nations are working together to counter China’s dominance on trade in the Indo-Pacific.”
“Japan’s Hiroshi Kajiyama, India’s Piyush Goyal and Australia’s Dan Tehan agreed in a video conference Tuesday to instruct their officials to share best practices on supply chain resilience, Australia’s Department of Foreign Affairs and Trade said in a statement. They also committed to holding investment promotion events to explore the possibility of diversification of their supply chains.” Jason Scott reports
Drones and AI Move Africa’s Farmers to Greener Pastures
African Business
“Africa holds more than 60% of the world’s uncultivated arable land and the agricultural sector employs about two-thirds of the continent’s working population. But back in 2014, an extensive record of crop data did not exist, so Meltzer and Paterson turned to aerial imagery and drone technology – which was relatively new at the time – to collect it. Such technology can help to assess characteristics of the plants that can’t be seen by the naked eye or which would take too long to review.” Jack Dutton reports