Emerging Markets Daily - January 20
Emerging Markets Daily - January 20
Bank of Russia Targets Crypto, Andreesen Horwitz in $4.5B Crypto Play, Saudi Arabia Tops China Oil Suppliers, Hong Kong Stocks Pop, New Egypt Oil Investments
The Top 5 Stories Shaping Emerging Markets from Global Media - January 20
Bank of Russia Seeks to Outlaw Trading and Mining of Crypto
Bloomberg
“The central bank of Russia, the third-biggest crypto mining nation in the world, proposed a blanket ban on the use and creation of all cryptocurrencies domestically.”
“Cryptocurrencies bear the hallmarks of a pyramid scheme and undermine the sovereignty of monetary policy, posing a threat to the Russian financial system, the central bank said in a report published Thursday.”
“‘Potential financial stability risks associated with cryptocurrencies are much higher for emerging markets, including in Russia,’ the report said. ‘This is due to the traditionally higher propensity for saving in foreign currency and an insufficient level of financial literacy.’”
“Mining hurts the country’s green agenda, jeopardizes Russia’s energy supply and amplifies the negative effects of the spread of cryptocurrencies, creating incentives for circumventing attempts at regulation, according to the Bank of Russia.”
“The central bank’s hard line against crypto dovetails with the position of Russia’s powerful security services, which also back a complete ban domestically to prevent it from being used to fund the country’s opposition, according to two people familiar with the issue.” Bloomberg reports.
Andreesen Horwitz Seeks $4.5 Billion for New Crypto Investments
Financial Times
“Andreessen Horowitz plans to raise up to $4.5bn for a new set of cryptocurrency funds, aiming to more than double the amount it raised less than one year ago in a sign of the growing frenzy surrounding digital assets.”
“The Silicon Valley-based venture capital firm told investors last week it planned to raise up to $3.5bn for its latest cryptocurrency venture fund and up to $1bn for a separate fund focused on seed investments in digital asset start-ups, said people briefed on the discussions.”
“Andreessen plans to finalise the new funds by March, one of the people said. The firm declined to comment. Andreessen is known as one of the leading VC firms in Silicon Valley, having previously been an early investor in Facebook, Twitter, Airbnb, Stripe, Coinbase and a host of other leading technology groups.”
“If successful, Andreessen’s haul would easily surpass any other funds raised to make early bets on cryptocurrency start-ups. The move signals how top VC firms are increasingly piling into crypto, fuelling a boom that has spawned hundreds of projects aiming to displace traditional finance.” The FT reports.
Saudi Arabia Tops China Oil Suppliers in 2021, Followed by Russia and Iraq
Arab News/Reuters
“Saudi Arabia retained its top ranking in Chinese oil supplies in 2021, with supplies up 3.1 percent over 2020, and increased its share to 17% of total Chinese imports, customs data showed.”
“China brought in 87.58 million tonnes of crude oil from the kingdom, or an equivalence of 1.75 million barrels-per-day, data from the General Administration of Customs showed on Thursday.”
“That compares to 84.92 million tonnes in 2020, when Saudi Arabia held 16 percent of the Chinese market. The expanded market share by the top OPEC exporter came as it boosted sales to national refiners and bolstered by demand from private mega refiners Zhejiang Petrochemical Corp and Hengli Petrochemical.”
“Russia came in second, increasing the gap with Saudi Arabia, as supplies contracted 4.7 percent to 79.65 million tonnes, or 1.59 million bpd, weighed down by weaker demand from China's independent refiners.”
“Shipments from Iraq came in third and fell 10 percent on the year to 54.13 million tonnes. Brazil dropped to No.7 last year versus No.4 in 2020, with supplies down 28 percent to 30.28 million tonnes, also due to reduced appetite from small independent plants.”
“Under a broad campaign to rein in surplus refining capacity and cut carbon emissions, the Chinese government last year introduced measures such as cutting import quotas and slapping a hefty tax on imports of blending fuels.”
“Imports from Oman and Malaysia gained 18 percent and 50 percent, respectively. Reuters reported shipments from Iran and Venezuela were passed on as originated from Oman and Malaysia due to U.S. sanctions.”
“China's customs data on Thursday showed the country brought in its first imports of Iranian crude oil in a year in December despite ongoing sanctions by the United States government.”
“Officially, Chinese customs data has consistently not shown any imports from Venezuela.” Arab News reports.
Hong Kong Stocks Rise by Most in 18 Months As China Cuts Key Lending Rate
South China Morning Post
“Hong Kong stocks surged by the most in 18 months after China cut a key lending rate for a second time in a month and stepped up infrastructure spending to prop up growth. Alibaba Group Holding led gains among tech peers.”
“The Hang Seng Index advanced 3.4 per cent on Thursday to a two-month high. The Tech Index jumped 4.5 per cent, the most in a week, while the Shanghai Composite Index slipped 0.1 per cent. The MSCI China Index, the broadest measure of onshore and offshore stocks, has gained US$25 billion in value this week through Wednesday.”
“Property developers led Thursday’s rally on optimism cheaper and freer flow of credit will alleviate an industry-wide liquidity crunch and revive home sales. China is drafting rules that will make it easier for developers to access proceeds from presales of homes, according to media reports.” SCMP reports.
Egypt Signs Two Agreements Worth $506 Million For New Oil Exploration
Egypt Today
“Minister of Petroleum and Mineral Resources, Tarek El Molla, signed two new agreements with the Canadian Transglobe and Pharos Energy companies to search for, develop and produce petroleum in several regions in the eastern and western deserts.”
“Total new investments amount to a minimum of $506 million, and a signature grant of $67 million to drill 12 wells, according to a statement by the Ministry of Petroleum issued Thursday.”
“The first agreement with the Canadian Transglobe Company includes the merger of the regions of North West Gharib, West Ghareb and West Bakr, in the Eastern Desert, and the injection of new investments for research, development and production of crude oil.”
“The second agreement with Pharos Energy aims to inject investments in research, development and production of crude oil in the Fayoum region in the Western Desert.”
“The signing of the two agreements comes as an extension of the agreements recently signed with the petroleum companies operating in Egypt, as part of the ministry’s continuous efforts to motivate companies to pump more investments and intensify activities to maximize production rates, especially with the current rise in international oil prices, according to El Molla.” Egypt Today reports.
“Some people say, ‘Give the customers what they want.’ But that's not my approach. Out job is to figure out what they're going to want before they do. I think Henry Ford once said, ‘If I'd asked customers what they wanted, they would have told me, 'A faster horse!’ People don't know what they want until you show it to them.” - Steve Jobs