Emerging Markets Daily - August 16

Afghan Gov't Collapses as Taliban Take Kabul, Middle East's New 'Black Gold': Hydrogen, Malaysia Cabinet Resigns, Investing Amid China Crackdown, Zambia Opposition Wins Election

Aug 16, 2021

The Top 5 Emerging Markets Stories from Global Media - August 16

Afghanistan Government Collapses as Taliban Take Kabul
The Wall Street Journal
“Taliban fighters on Sunday took over the Afghan capital and President Ashraf Ghani fled abroad, leaving the government in collapse, as a U.S.-led military operation began to airlift Western diplomats, civilians and Afghans likely to be targeted by the country’s new rulers.”
“Demoralized Afghan security forces offered no resistance as the insurgents, who seized most of the country in just over a week, appeared Sunday morning on Kabul’s outskirts. While the Taliban initially said they wouldn’t enter the capital while a transitional government is being formed, they reversed their stance by nightfall, saying that someone needed to maintain public order after Afghan police deserted their posts.”
“…By evening, the main road to the Kabul airport—packed with Afghans desperately trying to escape and with thousands of U.S. troops protecting the evacuation effort—presented a bizarre scene of Taliban fighters mingling with uniformed Afghan troops.” Yaroslav Trofimov reports
Hydrogen: the Middle East's Next Black Gold
The National
“Middle Eastern oil producers are making a big bet on hydrogen, the clean fuel that has been generating a lot of interest across the globe since the onset of the Covid-19 pandemic.”
“Hydrogen's rise as a favoured energy source in the Middle East comes on the heels of a wider global switch to a low-carbon economy. Oil exporters are preparing for a world where crude is no longer the dominant energy source and are trying to form new economies and relationships centred around cleaner fuels. Hydrogen, the most abundant element in the universe, has rapidly become a tool for decarbonisation.”
“Saudi Arabia, the world's largest exporter of oil, has pledged to become the world's top exporter of hydrogen. The UAE, Opec's third-largest oil producer, is drawing up a hydrogen road map and is looking to add the fuel to its clean energy mix by 2050.” Jennifer Gnana reports
Malaysia PM's Cabinet Resigns
Reuters
“Malaysia's cabinet led by Prime Minister Muhyiddin Yassin has tendered its resignation to the king, science minister Khairy Jamaluddin said on Monday, after months of political turmoil that resulted in a loss of the premier's majority.”
“Khairy announced the news in a post on Instagram. Prime Minister Muhyiddin was earlier seen entering the national palace on Monday, after reports he would tender his resignation to the king.”
“Muhyiddin's hand had weakened after months of infighting in his coalition. If confirmed, his resignation would end a tumultuous 17 months in office, but could also hamper Malaysia's efforts to reboot a pandemic-stricken economy and curb a resurgence in COVID-19 cases, as there is no obvious successor.” A. Ananthalakshmi and Mei Mei Chu report
Investors Pivot from Ecommerce to Chips to Avoid China Crackdown
Financial Times
“Investors are piling into Chinese chip, software and biotech groups at a record pace while paring their bets on ecommerce, as they try to align with Beijing’s policy priorities and sidestep a broadening regulatory crackdown.”
“Chinese president Xi Jinping has led a regulatory assault on internet platforms this year, hitting those in food delivery, ecommerce, fintech, gaming and education.”
“But the Chinese Communist party’s desire to advance technologies such as high-end manufacturing has boosted other companies.”
“China’s semiconductor sector has been supported by a multibillion-dollar government plan, partly to counter US determination to stifle its technology industry. Beijing wants the country to make 70 per cent of its semiconductors domestically by 2025, up from a third today.” Mercedes Ruehl and Hudson Lockett report
Zambian Opposition Leader Wins With Biggest Margin in 25 Years
Bloomberg
“Zambian opposition leader Hakainde Hichilema secured a shock landslide victory in the nation’s presidential election.”
“Electoral Commission of Zambia Chairman Esau Chulu announced Hichilema’s victory over incumbent President Edgar Lungu at a briefing early on Monday in the capital, Lusaka. Hichilema obtained 2.81 million votes against 1.81 million for Lungu -- the biggest margin of victory in a quarter century.”
“Hichilema, 59, faces the difficult task of reviving an economy wrecked by years of overspending that culminated in the nation becoming Africa’s first pandemic-era sovereign defaulter in November. Annual inflation is at the highest in two decades at nearly 25%, and the economy is forecast to only narrowly avoid a depression this year.” Matthew Hill and Taonga Clifford Mitimingi report