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Emerging Markets Daily - August 5
eBay Ramps Up in Mexico, Ghana Protests, Malaysian PM Battles to Survive, India's Newest Unicorn, Mubadala Launches Spac on Nasdaq
The Top 5 Emerging Markets Stories from Global Media - August 5
eBay Targets Growth in Mexico E-Commerce
Mexico News Daily
“E-commerce giant eBay says Mexico is a priority for the business and that its growth will create employment opportunities in the country, its largest market in the region.”
“Buying online boomed in 2020, when Mexico became the fourth fastest growing e-commerce market in the world, at 62%, despite an otherwise tumultuous year for the retail industry.”
“At the regional level, Latin America became the fastest growing region for e-commerce in the world in 2020, with growth of 63%, breaching the US $100 billion mark for the first time. Mexico is likely to account for about 27% of the Latin American market this year at around $35 billion, second only to Brazil.” Mexico News Daily reports.
Ghanaians Take To Streets to Demand Jobs, Better Governance
“Ghanaians kicked off a series of planned protests aimed at pressuring President Nana Akufo-Addo’s administration to do more to create jobs for the youth, improve health-care and education standards, and bring down living costs.”
“The demonstrations are being organized under the social media banner #FixTheCountry and were joined by thousands of people wearing masks and carrying placards, who marched in the streets of Accra, the capital, on Wednesday, a public holiday in the West African nation.”
“Akufo-Addo, 77, who won a tight re-election in December, faces the task of shoring up state finances that came under pressure after the government settled debts to power producers and cleaned up the banking industry, and were further battered by the Covid-19 pandemic. The nation’s ratio of debt to gross domestic product surged to 77% by the end of June, and the 2020 budget deficit reached 11.7%, more than double the legal cap.”
“A World Bank report last year found that Ghana was faced with 12% youth unemployment and more than 50% underemployment, higher than sub-Saharan African averages. That’s likely contributed to socio-economic tensions in the continent’s top gold producer, laid bare last month when authorities cracked down on protesters in the central town of Ejura, triggering an official inquiry.” Yank Ibukun reports.
Geopolitics: Embattled Malaysian PM Deflects Ouster Attempts - For Now
Nikkei Asian Review
“Malaysian Prime Minister Muhyiddin Yassin on Wednesday fought off attempts to force his resignation, likely buying at least a month to demonstrate he still controls a majority in the lower house of parliament.”
“The premier appeared to have lost what was thought to be a two-seat advantage Tuesday night, when around 10 lawmakers from the largest ruling coalition party -- the United Malays National Organisation (UMNO) -- formally withdrew their support. Yet Muhyiddin told a live telecast on Wednesday that he will face a confidence motion in parliament after it reopens next month.”
"‘Through that, my position as the prime minister and the National Alliance as the ruling party would be determined based on rule of law and the constitution,’ he said, flanked by several federal ministers.”
“Muhyiddin was granted an audience with King Sultan Abdullah Ri'ayatuddin earlier on Wednesday…According to the prime minister, the monarch agreed to his proposal to test his control in parliament. The king is scheduled to reopen the legislature on Sept. 6 for a sitting that would run through Sept. 30. The confidence vote could be held at any time during that stretch.”
“This week's jousting comes after an abbreviated parliament session last week. The government suspended what was supposed to be a five-day session after the fourth day, citing a coronavirus scare in the complex. Muhyiddin's opponents suspected the decision was really about dodging political pressure, especially after a rebuke from the palace over the government's handling of a state of emergency.” P. Prem Kumar reports.
India’s Newest Unicorn: BharatPe
“Merchant payments and financial services provider BharatPe has raised $370 million in a primary and secondary mix, as a part of a Series E funding round led by new investor New York-based Tiger Global Management.”
“Other new investors include Dragoneer Investor Group and Steadfast Capital, who have participated as a part of this round. The round makes BharatPe the latest entrant to India’s growing list of unicorn startups, with its valuation rising more than threefold to $2.85 billion in six months. The company had raised $108 million in February this year at a valuation of $900 million. The current fundraise saw new investor Tiger Global infuse $100 million in the startup, with Dragoneer and Steadfast investing $25 million each, as a part of this round.”
“Existing investors Sequoia Capital, Insight Partners, Coatue Management, Amplo and Ribbit Capital have invested a combined $200 million in the company as a part of its current Series E fundraise.” Tarush Bhalla reports.
Mubadala Launches $200 Million Spac on Nasdaq
“Mubadala Capital, the asset management arm of Mubadala Investment Company, launched a $200 million initial public offering of a blank-cheque company which will seek acquisitions in media and technology sectors.”
“Blue Whale Acquisition Corp I, sponsored by Mubadala Capital, is offering 20,000,000 units in its public offering at $10 per unit, the company said on Wednesday. It will list on the Nasdaq Capital Market in the US.”
“The special purpose acquisition company is formed for the ‘purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganisation or similar business combination with one or more businesses in the media, entertainment and technology industries’, the company said...”
“There were 79 Spac listings during the three months to the end of June that raised a total of $14.6 billion. This was 75 per cent lower by volume and 85 per cent lower by value than the 310 listings in the first quarter, which raised $95.5bn. More was raised via Spacs in the first three months of this year than the $83bn of Spac proceeds from the whole of last year.”
“Spacs are also becoming popular in the Middle East after music-streaming service Anghami said earlier this year it would list on the Nasdaq through a Spac merger. Swvl, based in Dubai, will become the second technology start-up from the region to list on the Nasdaq through a Spac but the first to have a $1.5bn valuation.”
“Last month, Dubai investment bank Shuaa Capital said it plans to set up three Spacs with capital of $200m each. In March, Dubai financial and investment advisory company Arrow Capital also co-sponsored the listing of a $240m Spac to pursue merger opportunities in the technology sector.”
“In addition to managing its own investments, the BWAC sponsor Mubadala Capital manages about $9bn in third-party capital. The company has a long track record of investments, especially in media, entertainment and premium content and services sectors.” Sarmad Khan reports.
What We’re Also Reading…
SPACs Target Emerging Markets As US Competition Mounts
Wall Street Journal
“Blank-check companies are venturing to far-flung locales such as Brazil, Israel and Turkey to find attractive merger targets these days.”
“Special-purpose acquisition companies, or SPACs, explicitly pursuing companies in Asia, Latin America, Eastern Europe, the Middle East and Africa remain a small part of the overall market. But they are growing at a faster clip than their conventional counterparts, according to The Wall Street Journal’s analysis of data from SPAC Research.”
“Sixty new SPACs focused on emerging markets filed documents with the Securities and Exchange Commission in the first half of 2021, almost triple the number for all of 2020, according to the analysis. The number of non-emerging-market SPACs grew by about 67% to 515 over the same period.”
“The surge coincides with mounting competition that has driven up purchase prices, and a selloff that has buffeted the U.S. SPAC market in recent months…” Matt Wirz reports.
Geopolitics: Iran Nuclear Talks Enter Danger Zone
“The climate has turned gloomy around world powers’ talks with Iran to revive a frayed nuclear accord, as a new ultraconservative Iranian president formally takes over Thursday and a crisis in Persian Gulf shipping lanes threatens to deepen.”
“Cleric Ebrahim Raisi will be installed after having received the blessing of his mentor, Supreme Leader Ayatollah Ali Khamenei, on Tuesday. Iran had put a brake on nearly three months of nuclear talks in Vienna to allow for its June presidential election and the changing of the guard, and hasn’t signaled when negotiations might resume.”
“The talks are intended to rein in Iran’s nuclear work in exchange for sanctions relief that would allow it to return to global oil markets. The delay has already put off Iran’s oil comeback beyond what many traders expected.”
“Negotiations once believed to recommence as early as mid-August could be pushed back to September or October, Russia’s ambassador to the International Atomic Energy Agency, Mikhail Ulyanov, said in an interview with Moscow’s Izvestia newspaper this week…U.S. and European officials have warned a prolonged delay could close the window on talks entirely. They’ll be watching for Raisi’s nominees for cabinet and his all-important negotiating team.”
“‘We remain fully prepared to return to Vienna but this process cannot and will not go on indefinitely,’ U.S. Secretary of State Antony Blinken said last week in Kuwait. As if to symbolize the frustration, police barricades around the hotels that had housed the American and Iranian negotiators during the talks were removed in late July.” Jonathan Tirone and Golnar Motevalli report.