Emerging Markets Daily - April 3
Pakistan PM Dissolves Parliament, Vitol Says Oil Price Should Be Higher, EU Preps New Russia Sanctions, Saudi Economy 7.7% Growth Forecast, Nigeria Air Lifting Off
The Top 5 Stories Shaping Emerging Markets from Global Media - April 3
Pakistan PM Khan Dissolves Parliament, Calls for New Election As No-Confidence Vote Gathers Steam
New York Times
“Prime Minister Imran Khan dissolved Pakistan’s National Assembly and called for new elections on Sunday, blocking a no-confidence vote that had been widely expected to remove him from office and threatening to plunge the country into a constitutional crisis.”
“Stunned opposition lawmakers said that they would challenge the move before the country’s Supreme Court, calling it ‘unprecedented’ and a ‘blatant violation’ of Pakistan’s Constitution. Allies of Mr. Khan said that the court had no authority to intervene in the legislature’s business and doubled down on Mr. Khan’s accusations of a United States-backed conspiracy to oust him.”
“The Supreme Court scheduled a hearing for Monday. The move to dissolve the legislature appeared to be a defiant bid by Mr. Khan to remain in power despite losing the backing of the military and facing growing opposition efforts to vote him out of office.”
“…In a televised speech on Sunday, Mr. Khan confirmed that he had ordered the legislature dissolved. He justified it by claiming, as he has repeatedly in recent days, that the move to oust him from office was part of an American conspiracy. He has offered no evidence to support his claims, and American officials have denied the allegations.”
“‘Prepare for elections,’ Mr. Khan said. ‘No corrupt forces will decide what the future of the country will be.’ As the assembly’s Sunday session opened, Mr. Khan’s ouster had seemed all but certain. Last week, several parties in his coalition abandoned him, giving the opposition the majority it needed to remove him from office.” The NYT reports.
Biggest Crude Trader Says Oil Prices Don’t Fully Reflect Russian Supply Risks
Bloomberg
“Oil prices have fallen to levels that don’t reflect the risk of disruptions to Russian exports or the ability of China to keep the coronavirus pandemic under control, according to the world’s biggest independent crude trader.”
“While Brent surged to almost $140 a barrel soon after Russia’s attack on Ukraine in late February, it sunk 13% last week to around $104. That was due to the U.S. announcing an unprecedented release of strategic reserves to tame fuel prices and virus cases rising in China.”
“Those developments overshadowed the potential for a drop in oil from Russia over the coming months. Traders, shippers, insurers and bankers are wary of taking on Russian barrels as Western governments isolate and sanction Moscow for its invasion.”
“‘Oil feels cheaper than most would’ve predicted,’ Mike Muller, Vitol Group’s head of Asia, said Sunday on a podcast produced by Dubai-based consultant and publisher Gulf Intelligence. ‘Oil prices could be higher given the risk of disruption of supplies from Russia. But people are still lost figuring out those numbers.’”
“Flows of Russian crude and oil products may be down by between 1 and 3 million barrels a day through the third quarter, according to Muller. The country normally exports around 7.5 million barrels every day.” Paul Wallace reports.
EU Preparing New Sanctions on Russia Amid Reports and Images of War Crimes
Financial Times
“The EU is preparing to introduce more sanctions against Moscow after reports of atrocities emerged in the wake of Russia’s military retreat from the outskirts of Kyiv. Charles Michel, president of the European Council, said further sanctions were ‘on their way’ in response to Russia’s actions in Bucha, a city 60km north-west of Kyiv that was under Russian occupation until recently.”
“‘Shocked by haunting images of atrocities committed by Russian army in Kyiv liberated region,’ Michel said on Twitter on Sunday. ‘Further EU sanctions & support are on their way. EU is assisting Ukraine & NGOs in gathering of necessary evidence for pursuit in international courts.’”
“EU ambassadors are expected to discuss the fresh round of measures on Wednesday, according to a diplomat with knowledge of the plans. The pledge for more punitive measures against Russia follows strong western condemnation of alleged Russian war crimes on unarmed Ukrainian civilians in recently liberated areas around Kyiv, as Moscow shifts its war focus to the country’s east.”
“…Calls for the sanctions to target Russian energy exports — on which the EU heavily depends — have grown louder. In Italy, one of the EU countries most reliant on Russian gas, Enrico Letta, the chief of the centre-left Democratic party, a junior partner in prime minister Mario Draghi’s national unity government, called for a ‘full oil and gas Russia embargo’.”
“Buying Russian oil and gas was ‘financing war crimes’, Lithuania’s foreign minister Gabrielius Landsbergis said. The Baltic country declared it was the first in the EU to stop gas imports from Moscow. ‘Dear EU friends, pull the plug. Don’t be an accomplice,’ he added.”
“Mykhailo Podolyak, a senior adviser to Ukrainian president Volodymyr Zelensky, posted an image on Twitter appearing to show multiple dead bodies on the streets of Bucha. Some of the victims appeared to have their hands tied behind their backs.” The FT reports.
Saudi Economy Forecast to Grow a Sizzling 7.7% in 2022
Arab News
“Saudi Arabia’s economy is forecast to grow 7.7 percent this year fueled by the expansion of the Kingdom’s oil sector, according to a report from Jadwa Investment.”
“The investment management and advisory firm sees the oil sector increasing by 15.5 percent, but it also estimates the level of ‘non-oil activities’ to grow by 3.4 percent. This will help fund a current account surplus equal to 7.6 percent of gross domestic product.”
“On a micro level, Jadwa’s report says consumer confidence in Saudi Arabia is at a record high and will likely lead to a spending boom in the coming months. It made the forecast as it revealed the Kingdom’s non-oil Purchasing Managers' Index hit its highest level for three months.” Arab News reports.
Nigeria Air Prepares for Take-Off. Qatar Airways and Emirates Airline Welcome the New Airline, Jostle for Partnerships.
The Guardian (Nigeria)
“United Arab Emirates (UAE) national carrier, Emirates Airlines, and its Qatari counterpart, Qatar Airways, have rallied behind Nigeria’s new national carrier project for successful take-off next quarter.”
“…Already christened Nigeria Air, the proposed carrier, last month, opened an invitation to interested private parties to submit proposals for the take-over and further development of the new carrier.”
“Minister of Aviation, Hadi Sirika, at the ongoing World Development Summit (WDS) in Dubai, said the process to set up the new airline was in full swing and promised it would be delivered before the end of this administration.”
“‘Nigeria is situated at the centre of Africa; equidistant from all locations in Africa of about 30.4 million square kilometres miles, 1.5 billion people and very green land. If Central and Eastern Africa are the belt of the continent, then Nigeria is the buckle. We have 200 million people and a rising middle-class with a high propensity to fly. So, Nigeria is a candidate for a national carrier.’”
“The minister reiterated that the government would have only a five per cent stake in the private sector venture, with no government control, interference or membership on its board.”
“Chief Executive Officer (CEO) of Emirates Airlines, Tim Clark, noted that Nigeria was on course with the new airlines, and Emirates would be obliged to support where necessary.”
“Clark said: ‘Is there a Business Case for the carrier? Of course, there is. There is an enormous Business Case to it. Nigerians are seeking to travel all over the world. Nigeria is the powerhouse of Africa. We are over interested in flying there because it is a rich nation in terms of demand for services.’” The Guardian reports.
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