Emerging Markets Daily - August 9
Stark Climate Change Warning, Taiwan Tech Exports Surge, Iran Deal on the Ropes, Taliban Takes 6th Afghan Capital, Islamic Bonds Hit Record High
The Top 5 Emerging Markets Stories from Global Media - August 9
Major Climate Changes Inevitable and Irreversible – IPCC’s Starkest Warning Yet
The Guardian
“Human activity is changing the Earth’s climate in ways ‘unprecedented’ in thousands or hundreds of thousands of years, with some of the changes now inevitable and ‘irreversible’, climate scientists have warned.”
“Within the next two decades, temperatures are likely to rise by more than 1.5C above pre-industrial levels, breaching the ambition of the 2015 Paris climate agreement, and bringing widespread devastation and extreme weather.”
“Only rapid and drastic reductions in greenhouse gases in this decade can prevent such climate breakdown, with every fraction of a degree of further heating likely to compound the accelerating effects, according to the International Panel on Climate Change, the world’s leading authority on climate science.” Fiona Harvey reports
Taiwan Exports Hit Record on Surging Tech Shipments
Bloomberg
“Taiwan’s exports started the second half of 2021 as it ended the first, growing at an unrelenting pace fueled by overseas demand for computer chips and electronic components, reflecting strengthening optimism the post-Covid global recovery is taking hold.”
“Taiwan’s overseas shipments rose 34.7% in July from a year earlier to $37.95 billion, according to a statement Monday from Taiwan’s Ministry of Finance. That was the highest for any month in data back to 1981. Total imports rose 41% to $32.05 billion, leaving a $5.9 billion trade surplus.”
“Taiwan’s economy grew faster than expected in the second quarter, mainly fueled by a surprising growth in export demand which offset the impact of island-wide Covid-19 restrictions. Gross domestic product grew 7.47% in the second quarter from a year earlier, official data showed, beating the median estimate of 6.65% in a Bloomberg survey of economists.” Betty Hou reports.
U.S Considers Changing Course on Iran Nuclear Deal
Bloomberg
“U.S. officials are reviewing their options on Iran after months of talks about a revival of a 2015 nuclear accord with the Islamic Republic failed to produce an agreement, according to people familiar with the matter.”
“Although still calling for a return to the pact, the U.S. is willing to weigh alternatives, including the interim step of limited sanctions relief in exchange for Iran freezing its most provocative nuclear proliferation work, they said.”
“The Biden administration faces the sobering reality that returning to the accord may no longer be feasible, as Tehran finds ways to cope with American sanctions and, potentially, build an atomic bomb.”
“Tensions between the countries have heightened following a deadly drone attack on a ship in regional waters on July 29, which Washington and its allies have blamed on Tehran. Iran has denied any involvement.”
“The ascension of Iran’s new hard-line president, Ebrahim Raisi, has also complicated diplomacy. Envoys are waiting on his administration to say when it wants to resume the negotiations in Vienna.” Paul Wallace reports.
Thousands Flee as Taliban Take a Sixth Afghan Capital
New York Times
“The collapse of Kunduz, a major city in Afghanistan’s north, has set off a new wave of displacement as thousands of people flee the city, fearing life under Taliban rule and an escalation of violence as government forces vow to retake the commercial hub.”
“Hundreds fled to the Afghan capital, Kabul, where a fenced-in basketball court was quickly transformed into a place of refuge. Displaced people huddled together under makeshift lodging consisting of little more than large olive-green bedsheets stretched across four wooden poles.”
“As more people arrived overnight, they searched for any space they could find. Women and children slept side by side on a patchwork of red Afghan rugs. On Monday, a crowd of people sought shade from the scorching heat, and one woman cradling an infant begged for a doctor to visit the camp.”
“In a matter of days, the Taliban have overtaken six provincial capitals in a land offensive that has led many local officials to abandon their posts and flee the cities they administer.”
“The U.S. response has been muted, and the Biden administration has made it clear that America’s 20-year war in Afghanistan is over. But the scale of the humanitarian crisis is likely to grow in the coming days and weeks, especially as the Taliban extend their reach over more territory.”
“Kunduz, the capital of a province of the same name, is a significant military and political prize. With a population of 374,000, it is a vital commercial city and a hub for trade and road traffic.” The New York Times reports.
Islamic Bonds Hit Record High in 2020
The National
“Issuances of Islamic bonds globally hit a record high in 2020, rising 20 per cent annually to $175 billion, driven by demand in Asia and the Middle East as the market remains attractive to issuers and investors, despite the Covid-19 pandemic, according to the International Islamic Financial Market (IIFM).”
“The longer tenor sukuk issuances by sovereigns and financial institutions, along with an increase in short-term sukuk issuances, drove last year's record growth, the IIFM said.”
“More than 90 per cent of the $648bn sukuk outstanding globally were issued by Malaysia, Saudi Arabia, Indonesia, the UAE and Bahrain, while the market share of Pakistan, Oman, Nigeria, Egypt and regions such as Africa is increasing, the organisation said. About $98.4bn in sukuk, with an issue size of $100 million or above and with tenor of more than a year, is set to mature in 2021 and 2022…”
“Global sukuk issuance is set to increase 11 per cent to as much as $155bn in 2021, driven by low interest rates and abundant liquidity, S&P Global Ratings said in a separate July report. A continued economic recovery, accelerated vaccination campaigns and oil prices of about $65 a barrel this year will also support growth in sukuk issuance, the ratings agency said.”
“A global economic recovery, fiscal and monetary easing, as well as liquidity injected by major governments and central banks globally are expected to drive the post-pandemic growth of Islamic finance assets, Alpen Capital and Alpen Asset Advisers said in June. A growing Muslim population, more sukuk issuances and ethical consumerism are set to boost demand for Sharia-compliant products, it said.” Deena Kamel reports.
What We’re Also Reading….
A Kyrgyzstan Gold Mine Takeover Highlights Increasing Mining-Sector Risk
The Wall Street Journal
“Canada’s Centerra Gold Inc. invested more than $3 billion over nearly three decades to turn a remote gold prospect in Kyrgyzstan into a prosperous gold mine. Then in May, the mine was taken over by authorities in the former Soviet republic.”
“Officials from Kyrgyzstan’s secret police arrived at homes of local mine managers to obtain computer passwords, confidential documents and keys to the mine and the head office of Centerra’s wholly owned subsidiary Kumtor Gold Co., people familiar with the matter and court documents said.”
“Mining and legal experts say the expropriation of one of Central Asia’s largest gold mines—which had accounted for about a tenth of Kyrgyzstan’s economic output—is one of the most brazen moves in recent years by a country to assert control over valuable natural resources.”
“Centerra is far from the only mining company that has tangled with governments in recent years. Gold or copper mines in Tanzania, Papua New Guinea, Mongolia, Indonesia, Greece and South America have been stalled or threatened as local governments pushed for more taxes, royalties or larger stakes.” Jacquie McNish and Joe Wallace report
The Silent Exodus of Haitians in Latin America
El Pais
“The earthquake that devastated the Caribbean nation in 2010 caused an exodus that continues to move, with tens of thousands of migrants stuck in Colombia or Mexico from Brazil and Chile.”
“Haitian migration has roamed Latin America for a decade and has once again become visible in an inhospitable place: the jungle border between Colombia and Panama. Thousands of stuck migrants have turned the Colombian municipality of Necoclí into a funnel before entering the isthmus through the Darién Gap and continuing their journey through Central America to the north, with the United States as the desired destination and Mexico as a new host territory for the exodus of that Caribbean nation. This crisis with unprecedented numbers has highlighted the pilgrimage of a population that crosses the continent, while Haiti remains mired in another peak of instability, one more, after the assassination of President Jovenel Moïse.” Santiago Torrado reports
Turkish Cypriot leader rules out reunification of divided island
Financial Times
“The hardline leader of breakaway north Cyprus will press his government’s push for a two-state solution at the UN next month, calling for a ‘reality check’ after half a century of failed efforts to reunite the divided Mediterranean island.”
“…Cyprus has been split since 1974 when Turkey invaded its north in response to an Athens-inspired coup which aimed to unite the island with Greece.”
“The decades-old dispute is now enmeshed in a region-wide conflict over rights to hydrocarbons in the eastern Mediterranean, with Cyprus, Greece, Israel, Egypt and the EU squaring off against Turkey and north Cyprus.” Ayla Jean Yackley reports