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Emerging Markets Daily - February 10
Indonesia's Gojek and Tokopedia Near Merger, HK and China Markets End Lunar Year on High, African Winemakers/Miners Toast China/Australia Row, Aramex Net Profits Fall
Gojek and Tokopedia Near Merger Ahead of Listing - Bloomberg
“Indonesia’s two most valuable startups, ride-hailing giant Gojek and e-commerce provider PT Tokopedia, are finalizing terms for their merger and aiming to reach an agreement as early as this month, according to people familiar with the matter.”
“The two companies are discussing a variety of scenarios with the goal of ultimately listing the combined entity in both Jakarta and the U.S., said the people, asking not to be identified because the negotiations are private. The target valuation in the public markets is between $35 billion and $40 billion, one of the people said.”
“The two startups plan to create an Indonesia internet powerhouse, at the leading edge of businesses from ride-hailing and digital payments to online shopping and delivery.”
“‘There is a strong possibility that the combined entity will get that kind of public market valuation, given the attention on the space,’ said Angus Mackintosh, founder of CrossASEAN Research, which publishes on Smartkarma and has done an analysis on valuations of major internet firms. Bloomberg reports.
Why the Gojek/Tokopedia Merger? - The Business Times (Singapore)
“It has been only about a month since reports of merger negotiations between Indonesia’s Internet darlings Gojek and Tokopedia first surfaced.”
“Yet, talks are going full speed ahead. The two companies are finalising terms for their merger, and are aiming to reach an agreement as early as this month, according to Bloomberg.”
“Indonesia’s two most valuable startups are targeting a valuation of between US$35 billion and US$40 billion. This could create a powerhouse that might become one of South-east Asia’s fastest-growing Internet companies - along with the likes of gaming and e-commerce giant Sea Ltd.”
“A marriage between the two home-grown unicorns not only looks good for Indonesia’s digital economy – it might prove more sensible and complementary as compared to a Grab-Gojek deal.”
“The Business Times (BT) breaks down some of the key reasons why the union makes sense, and some of the challenges that might lie ahead for the duo,” The Business Times reports.
Hong Kong, China Markets Close End of Lunar Year on a High - South China Morning Post
“The Hong Kong and China markets soared on Wednesday ahead of the Lunar New Year holiday, on optimism about a global economic recovery.”
“The Hang Seng Index rose 1.9 per cent to 30,038.72, rising above the 30,000 level for the first time since January 25, for a fourth straight day of gains.”
“The Shanghai Composite added 1.4 per cent to 3,655.09, reaching its highest level since August 20, 2015, for a third day of gains on the last trading day of the Year of the Rat. Between January 23 last year and Wednesday, the Shanghai Composite Index has risen 22.8 per cent, the Shenzhen Composite Index has risen 40 per cent and the CSI300 Index, which tracks the top 300 stocks on both exchanges, climbed 45 per cent. The mainland bourses will pause for five trading days, from February 11 to 17, while Hong Kong’s markets will open for half the day on Thursday, and will shut on February 12 and 15,” The South China Morning Post reports.
Africa Wine Makers and Miners Toast China vs Australia Row - Reuters
For South African winemaker Vergenoegd Löw, the pandemic could have been a disaster but a bitter trade war between China and Australia has thrown the 325-year-old estate a lifeline.
“Bottles of its reds, whites and roses piled up when South Africa banned alcohol sales under a strict lockdown and visitors who once flocked to the vineyard near Cape Town to sip wine and snap photos of its famed Indian Runner ducks vanished.”
“That changed when Beijing slapped tariffs of up to 212% on Australian wine in November after Canberra led calls for an inquiry into the origins of the COVID-19 outbreak in Wuhan.”
“It wasn’t just wine. Beijing hit a range of Australian goods with punitive duties, created new layers of red tape and banned some Australian imports outright, giving African suppliers of anything from coal to beef to copper a boost,” Reuters reports.
Aramex Net Profit Falls 43% on Higher Costs, Provisions - The National
“Aramex, the Middle East’s biggest courier company, reported a 43 per cent drop in full-year net profit due to higher costs and provisions.”
“Net profit for the period ending December 31, 2020 declined to Dh285 million, the company said in a statement to the Dubai Financial Market, where its shares trade. Aramex booked non-recurring provisions last year to cover damage at facilities in Beirut and Morocco. Costs also rose during the period.”
“‘As the global economy recovers from the pandemic and the global vaccination drive gathers pace, we are optimistic about the future of our industry,’ Mohamed Juma Alshamsi, chairman of Aramex said.
“Global trade volumes, which contracted 9.6 per cent last year, are forecast to grow about 8 per cent in 2021 and then moderate to 6 per cent in 2022, according to International Monetary Fund estimates,” The National reports.