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Emerging Markets Daily - March 3
S. Korea Coupang in Major US IPO, Bangladesh Rising, Saudi PIF Chair Says More Rapid Change to Come, Chinese Hackers Target India, Arab World Spotify Rival to List on Nasdaq
The Top 5 Emerging Markets Stories - March 3
South Korea Coupang Plans Blockbuster US IPO
“South Korea’s Coupang Inc., which is backed by SoftBank Group Corp., is targeting a blockbuster stock market debut that would value the e-commerce giant at well over $50 billion and make it the largest U.S. initial public offering this year.”
“In a regulatory filing on Monday, Coupang said it would price its offering between $27 and $30 a share. At the upper end of that range, Coupang will raise as much as $3.6 billion.”
“The massive offering comes as U.S. capital markets gear up for another banner year for new listings, underscoring unprecedented investor appetite for technology companies, which have seen sales skyrocket during the COVID-19 pandemic.”
“South Korea’s e-commerce market was estimated to be worth $90.1 billion in 2020, an annual growth of 22.3 percent, and is expected to reach $141.8 billion in 2024 at a compound annual growth rate of 12 percent, data and analytics company GlobalData has said.”
“The IPO would also mark a major win for SoftBank’s $100-billion Vision Fund, furthering a turnaround that has seen the fund swing rapidly from huge losses to record profit.” Asahi Shimbun/Reuters reports."
Bangladesh is Becoming South Asia’s Bull Case
“Bangladesh achieved an economic landmark last week, when the United Nations’ Committee for Development Policy recommended that the country graduate from the least-developed-country categorization that it has held for most of the 50 years since it became independent.”
“Bangladesh is notable in South Asia for being the closest proxy for the successful development models seen at various stages in South Korea, China and Vietnam. Export-led development has the best modern track record of moving countries from very low income levels into middle-income status.”
“Bangladesh’s exports have risen by around 80% in dollar terms in the past decade, driven by the booming garment industry, while India and Pakistan’s exports have actually declined marginally.”
“As recently as 2011, Bangladesh’s GDP per capita in U.S. dollar terms was 40% below India’s. It caught up last year in large part due to India’s pandemic-related slump, but the International Monetary Fund expects the gap to stay more or less closed.”
“There are other factors in the country’s favor as far as its development model goes: a very young demographic structure, a continued competitive edge in terms of wage levels, strong and rising female labor-force participation especially relative to the rest of South Asia.” The Wall Street Journal reports.
Saudi PIF Chair Says More Rapid Economy, Society Changes to Come
“Changes in Saudi Arabia in the past five years are just the ‘tip of the iceberg’ of the transformation the Kingdom will experience under the Vision 2030 strategy and beyond, Yasir Al-Rumayyan, governor of the Public Investment Fund, said on Tuesday.”
“‘The things we’d like to achieve in 2030 will be our optimal way of starting the next phase, which is what we will do until 2040, or after that to 2050,’ Al-Rumayyan told a virtual session of CERAWeek — the ‘oil man’s Davos’ — in Houston, Texas.”
“‘Our society is changing, the people are becoming more receptive to new ideas on how companies should work and how society should function, and even the social contract is changing. If you add all of these together, you will have an idea of what Saudi Arabia, by embracing and implementing Vision 2030, will look like in nine years,’ he said.”
“Al-Rumayyan, who is also chairman of Saudi Aramco, said plans remained in place to sell more shares in the world’s biggest oil company, after the biggest initial public offering (IPO) in history in 2019 when it sold less than 2 percent of its shares.”
“‘From the very beginning we said we would be selling more of the shares owned by the government; once we see market conditions improving, and more appetite from different investment institutions and investors, we will definitely consider selling more shares,’ he said.”
“He also underlined the Kingdom’s ambitions in renewable energy and hydrogen fuels. ‘Aramco is interested in renewables, believe it or not. It is the largest oil and gas company on the planet, but we are thinking of ourselves as an energy and petrochemical company.’” Arab News reports.
Chinese Hackers Still Actively Targeting Indian Port, Report Says
“At least one connection opened by Chinese state-sponsored hackers into the network system of an Indian port is still active, even as authorities block attempts to penetrate the South Asian nation’s electrical sector, according to the U.S. firm that alerted officials.”
“As of Tuesday, Recorded Future could see a ‘handshake’ -- indicating an exchange of traffic -- between a China-linked group and an Indian maritime port, said Stuart Solomon, the firm’s chief operating officer. Recorded Future calls the group RedEcho and says it had targeted as many as 10 entities under India’s power grid as well as two maritime ports when the company first notified India’s Computer Emergency Response Team on Feb. 10. Most of these connections were still operational as recently as Feb. 28, Solomon said.”
“‘There’s still an active connection between the attacker and the attack,’ Solomon said, referring to the port. ‘It’s still happening.’”
“A spokesman for India’s Ministry of Electronics and Information Technology wasn’t immediately available for comment. ‘Without any proof, slandering a specific side is irresponsible behavior and an ill-intentioned one,’ Chinese Foreign Ministry spokesman Wang Wenbin said in Beijing on Wednesday.”
“The intrusions into India’s critical infrastructure have been occurring since at least the middle of last year, according to Recorded Future, which tracks back to the start of a bloody skirmish between Indian and Chinese soldiers at a border post in the Himalayas.”
“Since then, authorities across India’s federal and state governments have been bickering about whether a cyberattack was responsible for the October collapse of the power grid that supplies Mumbai, an outage that brought the financial hub to a halt for several hours, impacting stock markets, transport networks and thousands of households.” Bloomberg reports.
Arab World Spotify Rival To List on Nasdaq
“Anghami, the music streaming rival of Spotify in the Arab world, is set to become the first technology firm from the region to list on the Nasdaq in New York, following a merger with a blank-cheque company.”
“The deal with Vitas Media Acquisition Company (VMAC), a special purpose acquisition firm, or SPAC, set up last year will be one of the biggest investments in a technology start-ups this year, valuing the company at $220 million, or about 2.5 times its 2022 estimated revenue.”
“The company will raise about $100m in funding through the deal and about 70 per cent of proceeds will be reinvested to spur growth, Anghami co-founders Eddy Maroun and Elie Habib told The National on Wednesday.”
“UAE-based investment bank Shuaa Capital and VMAC parent, Vistas Media Capital, have gathered commitments of a combined $40m in PIPE – private investment in public equity – financing. Shuaa, which has already invested in Anghami in an earlier funding round, has committed $30m and Vistas contributed the remainder.” The National reports.