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Emerging Markets Daily - April 5
U.S Recovery Mixed Blessing For World, India Covid Hits New Highs, Strong Tesla 1Q Sales Boosted by China, UAE in $8.2B Stimulus, MasterCard Bets $100M on Africa Mobile Money, and more
The Top 5 Emerging Markets Stories from Global Media - April 5
Powerful U.S Recovery Offers A Mixed Blessing For The World
The Wall Street Journal
“A powerful recovery in the U.S., primed by massive government spending and a rapid vaccine rollout, is already rippling around the world, brightening the economic prospectsfor countries closely tied to the American economy.”
“But economists say the coming U.S. boom could presage a two-speed recovery from the extraordinary economic downturn of the past year, a schism that threatens to open fissures in the global economy.”
“While lockdowns and Covid-19 restrictions hit many economies last year in roughly equal measure, early evidence shows that the exit from the pandemic could be greatly lopsided. Rich countries and some export-driven economies are already enjoying the early fruits of successful vaccine campaigns and resurgent growth.”
“Instead, poor nations are seeing nascent signs of capital outflows being lured to rich countries. Meanwhile, those countries face a long wait for vaccines and some are suffering fresh Covid-19 waves that leave them cut off from the travel and tourism flows that have supported their economies in recent years.”
“The U.S. economy is expected to grow by around 6.5% this year, the fastest since 1984. That surge could leave the U.S. economy even larger at the end of this year than it was forecast to be before the pandemic, according to the Organization for Economic Cooperation and Development.”
“No other major economy, not even China, is likely to boast that. Economists expect the U.S. to be the main driver of global growth this year.” The Wall Street Journal reports.
India Hits Record Infections, Spurs New Shutdowns
“India added more than 100,000 coronavirus infections over the last 24-hours, a record increase that pushed its richest state to order offices to work from home and shut malls and restaurants through April.”
“Maharashtra, which houses financial hub Mumbai and contributes about 15% of national output, will halt all non-essential services from 8 p.m. on Monday. Private offices were asked to work from home, with some allowances for banks and stock exchanges.”
“The country reported 103,558 new infections, according to data from the federal Health Ministry Monday…Maharashtra is the epicenter of this fresh outbreak, which follows an unexplained lull in recent months that allowed businesses to re-open and fostered optimism among policy makers about a recovery in growth. The renewed restrictions will weigh on the central bank, whose officials meet Monday through Wednesday to decide monetary policy.”
“India’s benchmark stock index plunged and the rupee weakened on Monday, while sovereign bonds were little changed. Twelve of 19 sector sub-indexes compiled by BSE Ltd. fell, led by gauges of banks and financial companies. Shares of hotels and cinema operators plummeted.”
Tesla’s Stellar 1Q Results Boosted by Robust China, Europe Sales
South China Morning Post/Bloomberg
“Tesla’s market-smashing deliveries of electric vehicles (EVs) in the first quarter suggest Chief Executive Elon Musk’s bet on growth in China and Europe is starting to pay off.”
“The results marked a strong start to a year in which Musk is counting on global operations to help scale-up production and sales. Tesla delivered 184,800 cars worldwide in the first quarter, exceeding the 169,850 average estimate in a Bloomberg survey of analysts. It represents an increase of about 4,000 vehicles over the preceding quarter.”
“The latest quarter was ‘a massive home run in the eyes of the bulls,’ Dan Ives at Wedbush wrote in a research note Friday. ‘We believe China and Europe were particularly robust this quarter as the trajectory now puts Musk & Co to exceed 850k for the year, which is well ahead of whisper expectations.’” South China Morning Post/Bloomberg report.
UAE Launches $8.2 Billion Stimulus to Support Industrial Production
“The Emirates Development Bank is allocating 30 billion dirhams ($8.17 billion) to support companies regarded as a priority for the UAE economy, Dubai Ruler Mohammed bin Rashid Al-Maktoum announced on Monday.”
“The program will benefit about 13,500 companies in industrial sectors, in turn creating 25,000 jobs, according to a statement carried by WAM. It was launched to support the UAE’s ‘Operation 300bn,’ a 10-year strategy to expand the country’s industrial output, raising its contribution to GDP to 300 billion dirhams by 2031.” Arab News reports.
Mastercard’s $100M Bet on Africa’s Mobile Money Sector
“The $100 million investment from global payments giant Mastercard in the mobile money business arm of Airtel Africa announced this week is a sign of the rapid growth and optimism in Africa’s digital payment sector.”
“The transaction values the subsidiary, Airtel Mobile Commerce, at $2.65 billion. It follows a $200 million investment in the company by TPG’s Rise Fund just two weeks ago. Both TPG and Mastercard now have minority stakes in the company.”
“More than half of the world’s mobile money services are located in Africa, according to a recent report by GSMA, making it a fertile market for investors. Mobile money services are defined as being accessible to people who do not have formal bank accounts.”
“Airtel Africa is a London-headquartered company operating in 14 African countries. The deal shows that major African telcos are looking to spin off their mobile money platforms as a way to accelerate growth, says George Bodo, the CEO of Callstreet Research and Analytics, a Kenya-based investment and market research platform. Just last month, South Africa’s MTN said it was considering spinning off its financial services unit and potentially listing it to unlock value in its core business.” Jackie Bischoff and Carlos Mureithi report for Quartz Africa.
What We’re Also Reading…
Europe Covid Infections Rising, Grim Spring Looms
”More than a year after the start of the pandemic, Europe is enduring a grim spring. Covid-19 infections, hospitalisations and deaths are rising in many countries as the continent grapples with a more infectious variant, a shortage of vaccines and public weariness with lockdowns.
“In France ‘the epidemic is spreading fast, and it’s spreading everywhere,’ prime minister Jean Castex told parliament on Thursday after President Emmanuel Macron announced the country’s third nationwide lockdown, which includes travel restrictions and school closures and extends a 7pm-6am curfew…”
“The latest pandemic surge in Europe, triggered by the spread of the now dominant B.1.1.7 strain of the virus first noted in England, is often called a ‘third wave’, but observed across the continent as a whole it is more like a confused sea in which some national epidemics are worsening, some are reaching their peak and others are declining.”
This Week in Webinars
We may all be Zoom’ed out, but if you have the time and inclination, the World Bank and IMF will be streaming several of its major forums during the Spring meetings this year. The World Bank 2021 Spring Meetings will take place virtually from Monday, April 5, through Sunday, April 11, 2021.
Featured events include regional briefings, press conferences, and fora focused on international development, issues of debt, economic recovery, vaccines, and climate.
Some of the sessions you can stream from home:
How Jordan’s Government Portrayed the Alleged Coup Attempt
For a glimpse at how Jordan’s government views the alleged coup attempt against King Abdullah II over the weekend, see this Jordan Times article.
“Prince Hamzeh and his inner clique’s scheme to undermine the security and safety of Jordan was foiled, Deputy Prime Minister Ayman Safadi said on Sunday.”
“Safadi said between 14 to 16 people were arrested for attempting to jeopardise the safety and stability of Jordan. The suspects included former minister Bassem Awadallah and Sharif Hassan Bin Zeid.”