Emerging Markets Daily - March 11
Fears Rise of New Attack on Kyiv, China Shares Tumble in Hong Kong, EU Calls for 'Pause' in Iran Nuke Talks, An $800M Funding Round for Byju's, Argentina and Crypto
The Top 5 Stories Shaping Emerging Markets from Global Media - March 11
Russian Airstrikes Pound Western Ukraine, Fears Rise of New Attack on Kyiv
Wall Street Journal
“Russian airstrikes pounded Ukrainian cities far from the front lines Friday as Moscow’s ground offensive appeared to reposition some forces in the north of the country in what Western officials worry is a prelude to a renewed attack on the capital.”
“Missiles hit airports at dawn in the western Ukrainian cities of Ivano-Frankivsk and Lutsk, where attacks have been rare since the beginning of the invasion more than two weeks ago.”
“Ukraine’s resistance has managed to stymie Russian forces in carrying out Russian President Vladimir Putin’s bid to take Kyiv and topple its government. Ukrainians have warded off Russian assaults on some of the country’s biggest cities and launched counterattacks on Russian convoys, using Turkish-made drones and Western antitank munitions.”
“Still, Russian forces have made advances along Ukraine’s Black Sea coast, surrounding the city of Mariupol. The daily bombardment of Mariupol, including a strike on a maternity hospital, has left the city of more than 400,000 without food, clean water or electricity.”
“In Moscow, the Kremlin signaled plans to move more forces toward its western border, and funnel what it described as volunteers from the Middle East to fight in Ukraine. Russia has been recruiting Syrians skilled in urban combat as its invasion is poised to expand deeper into Ukrainian cities.” WSJ reports.
Chinese Shares Tumble in Hong Kong After SEC De-Listing Warning
Nikkei Asia
“Investors moved to drop Chinese shares in Hong Kong on Friday following disclosure that five companies listed in New York had been warned by the U.S. Securities and Exchange Commission to expect delisting.”
“The Hang Seng Tech Index, which includes several Chinese technology companies listed in both Hong Kong and New York, slid as much as 8.9% before closing down 4.3%. The main Hang Seng Index ended 1.6% lower after dipping as much as 3.9%.”
“Biopharmaceutical producer HutchMed (China), subsidiary of CK Hutchison Holdings and one of the targeted companies, declined 9.5%. Online retailer JD.com, which was not named but had reported its first annual loss in three years on Thursday night, tumbled 11%.”
“The other companies that were targeted as the SEC moved to implement a 2020 law that requires companies listed on American exchanges to allow U.S. inspectors to review audit records were biotechnology developers BeiGene and Zai Lab, microchip equipment maker ACM Research, and Yum China, the operator of the KFC and Pizza Hut chains in China.” Nikkei Asia reports.
EU Foreign Policy Chief Calls for Pause on Iran Nuclear Talks
Financial Times
“The European Union foreign policy chief has said that talks in Vienna to resurrect the 2015 nuclear accord between Iran and global powers should be paused because of ‘external factors. A pause in #ViennaTalks is needed, due to external factors,’ said Josep Borrell on Twitter on Friday at the end of a week in which western officials had hoped a deal would be announced.”
“The Islamic republic has been in indirect talks with the US, brokered by the EU, for the past 11 months…Borrell did not provide further explanation as to what the ‘external factors’ were but in recent days Russia, which is party to the deal along with US, France, UK, Germany and China, has asked for guarantees that US sanctions imposed on Russia in the wake of the invasion of Ukraine will not affect its trade with Iran.”
“…Western officials fear that if a deal is not reached soon, the moribund accord will be redundant because of the advances Tehran has made to its nuclear programme. Tehran — which has been enriching uranium close to weapons-grade since 2019 — wants all Trump-era sanctions to be lifted, including those related to human rights and terrorism allegations.”
“Iran’s negotiators are under pressure at home to strike an agreement, particularly from the business community as well as ordinary Iranians hit by the impact of the sanctions. Reform-minded analysts believe Russia’s invasion of Ukraine and the resultant rise in oil prices could benefit Iran and that the Islamic republic should not let Moscow derail the talks.”
“But they also blame hardliners for what they see as capitulation to Moscow. ‘Putin sent the nuclear accord into a coma,’ wrote Hamid Hosseini, a leading petrochemical trader in his personal channel on Telegram app.” Najmeh Bozorgmehr reports.
Byju’s Founder Leads $800 Million Funding Round Alongside BlackRock
Bloomberg
“Byju Raveendran is investing $400 million in his namesake and India’s most valuable startup, Byju’s, leading an $800 million funding round alongside investors BlackRock Inc., Sumeru Ventures and Vitruvian Partners.”
“Raveendran’s stake will increase by nearly 2% in Byju’s parent Think & Learn Pvt., according to a person familiar with the development. The round values the startup at $22 billion, said the person who asked not to be identified as the information is private. That takes the founder group’s holding to about 25%.”
“The funding round has closed even as the Bangalore-headquartered edtech startup is in negotiations with at least three special-purpose acquisition companies with plans to go public via a merger. The SPACs include Michael Klein’s Churchill Capital and Michael Dell’s MSD Acquisition Corp., and the SPAC promoted by Harry Sloan, a long-time Hollywood executive. Separately, the startup is also in discussions for a pre-IPO funding round of up to $1 billion.”
“Raveendran’s investment is a rare instance of an Indian founder-entrepreneur taking part in a venture capital round at a late-stage startup that is considering an initial public offer. It bucks the trend of others who give up stake early, decreasing their say in the companies they founded in later stages.”
“Byju’s has 7.5 million annual paid subscriptions for its school lessons app. It also has expanded its product portfolio to include one-to-one learning with teachers in India and elsewhere tutoring school children across the globe in countries like U.S., U.K, Brazil, Indonesia, Mexico and Australia.” Saritha Rai reports.
Cryptocurrencies Prove a Lifeline for Argentines Battered by Poor Economy
Buenos Aires Times
“Sports stadiums, buses and highway billboards across Argentina are plastered with adverts for cryptocurrency exchanges, as the nation’s economic instability fuels one of the world’s biggest booms in digital money.”
“TV and radio hosts talk about investment options in digital coins, and a crypto exchange is currently one of the sponsors of the nation’s biggest football tournament.”
“Workers are increasingly getting paid in cryptocurrency to circumvent exchange controls and to protect them from currency swings and 50 percent inflation. Argentina has a higher proportion of employees getting paid in cryptocurrency than anywhere else, according to Deel, a payroll company that operates in 150 countries.”
“Driving the trend is a local law that allows companies to pay as much as 20 percent of remuneration in kind.”
“That’s a huge advantage due to Argentina’s currency controls. If a company were to pay US$1,000 through the banking system, the employee would receive about 109,000 pesos, at the official exchange rate. But if the worker instead got paid in a cryptocurrency, that could be changed at the unregulated parallel exchange rate for about 200,000 pesos – 83 percent more.”
“Small and medium businesses are driving the adoption of digital currency. Germán Giménez, founder of Komuny, an education start-up with fewer than 50 employees in Mendoza Province, said his company pays the majority of staff in cryptocurrency.” Buenos Aires Times reports.
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