Emerging Markets Daily - April 29

Mideast Oil Crown Jewel Deals Ramp Up, Samsung Profit Soars, Singapore and Thailand Cross-Border Payments, India EduTech Firm Rising, Canal+ Bets on Ethiopia, Russia-Europe Ties at New Lows

The Top 5 Emerging Market Stories from Global Media - April 29

  1. Oil Crown Jewels Are No Longer Off Limits With Deals Ramping Up


    In the space of a few weeks, Saudi Arabia, the United Arab Emirates, Qatar, Oman and Kuwait have all accelerated multi-billion-dollar plans to sell energy assets or issue bonds off the back of them. Capping that trend, Saudi Crown Prince Mohammed bin Salman said Tuesday the kingdom is in talks with an unidentified ‘global energy company’ to sell a stake worth about $20 billion in state oil firm Aramco.”

    “The shift underscores how countries in a region home to almost half the world’s oil reserves are taking advantage of the recovery in energy prices following last year’s coronavirus-triggered crash to bolster their ailing finances. The global transition to greener energy is only adding to the urgency, with governments requiring fresh funds to invest in new sectors and diversify their economies. And investors, hobbled by record low interest rates, are grabbing the opportunity.”

    “‘There’s definitely more to come,’ said [Ben Cahill, a senior fellow at the Center for Strategic and International Studies in Washington]. ‘The national oil companies are watching each other and picking up some new tricks.’” Paul Wallace, Verity Ratcliffe, and Archana Narayanan report

  2. Samsung 1Q Profit Soars on Strong Consumer Tech Demand

    Wall Street Journal

    “Samsung Electronics Co. ’s first-quarter net profit rose 46%, boosted by a greater appetite for the South Korean tech giant’s gadgets and appliances that softened the financial hit from a temporary shutdown of its U.S. semiconductor production.” 

    The world’s largest smartphone and memory-chip maker reported a net profit of 7.14 trillion South Korean won, or the equivalent of about $6.4 billion, up from 4.88 trillion won the prior year…”

    “Samsung is a proxy for the global tech world, making a wide range of electronic gadgets while serving as a components supplier for its biggest rivalsOperating profits for Samsung’s mobile division soared by 65%, to 4.39 trillion. The results were aided by an earlier release of its Galaxy S21 flagship phone, which made its debut roughly a month ahead of its usual timetable. It was the first time in nearly five years that the firm’s mobile-unit operating profits topped those of semiconductors.

    “It was also helped by a weakening of some key rivals. China’s Huawei Technologies Co. has been hit by sanctions, while LG Electronics Inc. recently declared its exit from the mobile-phone industry.” Timothy W. Martin reports.

  3. Singapore’s PayNow Links with Thailand's PromptPay for World’s First Cross-Border Fast Payments

    The Straits Times (Singapore)

    “The local PayNow system that lets individuals transfer money using just a mobile number is now linked to Thailand's PromptPay version, the Monetary Authority of Singapore (MAS) and Bank of Thailand (BOT) said in a joint statement on Thursday (April 29). Three of Singapore’s 12 PayNow banks are participating in the scheme - DBS Bank, OCBC Bank and UOB - together with four banks in Thailand - Bangkok Bank, Kasikorn Bank, Krung Thai Bank and Siam Commercial Bank. ”

    The linkage between the two countries' national fast payment systems is the first of its kind in the world, they said.”

    “The funds will flow seamlessly and securely between customers' accounts in Singapore and Thailand, and the transfers will be completed in less than five minutes, presenting a marked improvement over the average of one to two working days needed by most cross-border remittance solutions.” Ovais Subhani reports

  4. Edu-Tech Byju’s to Become India’s Most-Valuable Startup after UBS Funding

    The Indian Express

    “Byju’s, India’s online education pioneer, is raising about $150 million from UBS Group AG at a valuation of about $16.5 billion, multiple people familiar with the deal said. The funding will make it India’s most-valuable startup.”

    “The UBS investment will take the valuation of Byju’s past digital payments startup Paytm, which was last valued at $16 billion.”

    “In a recent interview, [Founder] Raveendran said the pandemic had dramatically altered parents’, teachers’ and students’ acceptance of online learning. The startup’s eponymous K-12 app, which brings in the bulk of its revenues, has over 80 million registered users in India who grasp math and science fundamentals through animated games and videos featuring tutor demos.” Indian Express reports

  5. France’s Canal+ Makes Big Bet on Ethiopia Media Content

    The Africa Report

    “Although Canal+’s Ethiopian platform is being launched extremely cautiously, it is the most important project that the subsidiary of Vivendi – a French media conglomerate – has carried out on the [African] continent in recent years.”

    By launching a wide range of Amharic-language television channels, the Vivendi subsidiary Canal+ is pushing its Chinese and South African competitors -- Startimes and MultiChoice -- to reconsider their plans. The French media conglomerate is taking a bet that goes beyond Ethiopia's middle class, which it estimates at 1 million people.” Julien Clémençot reports


    What We’re Also Reading….

    Geopolitics: Russia, Europe Ties Sink Further Amid More Diplomatic Expulsions

    Financial Times

    “Russia has expelled seven more envoys from European embassies in Moscow in tit-for-tat moves as the diplomatic fallout from a Czech explosion blamed on Russian spies continues.”

    “Prague blamed Moscow earlier this month for a 2014 explosion at a Czech arms depot that killed two people, and expelled 18 Russian diplomats. That prompted several EU member states also to kick out Russian diplomats in solidarity, and a wave of countermeasures from Moscow.”

    The EU state expulsions, alongside other reciprocal moves including the decision by the US and Russia to expel 10 of each others’ diplomats following a new raft of sanctions from the White House and the Kremlin, mean almost 150 diplomats from Russia and western countries have been ordered to return home over the past two weeks.”

    That erosion of diplomatic presence comes amid the worst relations between Moscow and western capitals since the cold war, fuelled in recent weeks by concerns over Russia’s military build-up on the border of Ukraine and the poor health of jailed opposition activist Alexei Navally.” Henry Foy reports.

    Total Halts Work on $20B Mozambique Gas Project Amid Security Concerns

    The East African

    “Total SE of France has declared an indefinite suspension of work on $20 billion natural gas project in Mozambique’s northern Cabo Delgado province due to militant attacks close to its site.”

    “‘Considering evolution of security situation in the north of Cabo Delgado province, Total confirms withdrawal of all Mozambique LNG project personnel from Afungi site,’ said Total’s Media Relations Department.”

    “The firm on April 26 declared force majeure of building of a liquefied natural gas (LNG) processing plant on the Afungi peninsula, citing deterioration of security arising from attacks by an insurgent group in the area. Force majeure is a legal provision allowing parties to suspend or end contracts due to wars or natural disasters that are beyond their control…”

    Al Sunnah wa Jama’ah (ASWJ), locally known Al-Shabaab but with no links to the Somali militant group with the same name, started in a low-scale insurgency in Cabo Delgado in 2017 but has now expanded its ferocious attacks closer to the LNG project site. The militant group is linked to the Islamic State of Iraq and Syria (ISIS).” Kennedy Senelwa reports. 

  6. China Rocket Launch Kicks off First Manned Space Station

    Nikkei Asia

    “China successfully launched a rocket on Thursday carrying the core capsule for the construction of the country's maiden space station, a mission that shows the country's progress toward greater technological independence.”

    China's space exploration program has gathered pace under President Xi Jinping, who aims to cut reliance on foreign technology under the country's latest five-year economic plan which runs through 2025. In an article published last month, Xi said advancement in science and technology is a means to achieve prosperity and national rejuvenation.”

    China, which completed 39 launch missions last year, or about one third of the world's total, has a spaceship currently orbiting Mars ahead of a planned landing scheduled for mid-May, according to officials. If successful, China will be the second country after the U.S. to land a rover on Mars, the nearest planet to Earth.” CK Tan reports

    SABIC’s 1Q Profit Surges on Global Recovery


    “Chemicals maker Saudi Basic Industries Corp.’s profit jumped as the reopening of the global economy led to higher demand for its products used in everything from packaging to buildings and agriculture.”

    Net income was 4.86 billion riyals ($1.3 billion) in the first quarter, more than double the level of the previous three-month period. It was also turnaround from a loss of 1.05 billion riyals a year ago.”

    “‘The first quarter saw rising oil prices and a tight supply and demand balance,’ said Chief Executive Officer Yousef Al-Benyan. ‘These elements, combined with growing demand as the global economy continues to recover, resulted in higher prices and margins for most of our products.’”

    Climate Change a ‘Risk Multiplier’ for Southeast Europe

    bne IntelliNews

    “Climate change is a ‘risk multiplier’ for the South-East Europe region, which has already been identified as one of the world’s ‘warming hot spots’ that will become increasingly vulnerable to heatwaves, droughts and other extreme weather events as global temperatures rise, says a new report from the OSCE and think-tank and public policy consultancy Adelphi.” 

    The region comprising ex-Yugoslavia and Albania, which was racked by wars in the 1990s as the Yugoslav Federation disintegrated, is already prone to border tensions. Now the report, ‘Regional Assessment for South-Eastern Europe: Security implications of climate change’, identifies border hotspots across the region where rising temperatures and more extreme weather events risk worsening existing problems and adding to border tensions.” Clare Nuttal reports.