Emerging Markets Daily - May 4
Covid-19 Surge Goes Beyond India, Loss of Income Rampant Worldwide, Modi Regional Election Loss Buoys Opposition, Hong Kong Reviving, Aramco Profit Surges, and More
The Top 5 Emerging Market Stories from Global Media - May 4
It’s Not Just India. Covid-19 Surges In Other Developing Countries
Bloomberg
“It’s not just India. Fierce new Covid-19 waves are enveloping other developing countries across the world, placing severe strain on their health-care systems and prompting appeals for help.”
“Nations ranging from Laos to Thailand in Southeast Asia, and those bordering India such as Bhutan and Nepal, have been reporting significant surges in infections in the past few weeks. The increase is mainly because of more contagious virus variants, though complacency and lack of resources to contain the spread have also been cited as reasons.”
“In Laos last week, the health minister sought medical equipment, supplies and treatment, as cases jumped more than 200-fold in a month. Nepal is seeing hospitals quickly filling up and running out of oxygen supplies. Health facilities are under pressure in Thailand, where 98% of new cases are from a more infectious strain of the pathogen, while some island nations in the Pacific Ocean are facing their first Covid waves.” Jinshan Hong, Randy Thanthong-Knight and Jason Scott report.
One in Two People Globally Lost Income Due to the Pandemic - Gallup
Thomson Reuters Foundation
“One in two people worldwide saw their earnings drop due to the coronavirus, with people in low-income countries particularly hard hit by job losses or cuts to their working hours, research showed on Monday.”
“U.S.-based polling company Gallup, which surveyed 300,000 people across 117 countries, found that half of those with jobs earned less because of COVID-19 pandemic disruptions. This translated to 1.6 billion adults globally, it said.”
"‘Worldwide, these percentages ranged from a high of 76% in Thailand to a low of 10% in Switzerland,’ said researchers in a statement.”
“In Bolivia, Myanmar, Kenya, Uganda, Indonesia, Honduras and Ecuador, more than 70% people polled said they took home less than before global health crisis. In the United States, this figure dropped to 34%. The COVID-19 crisis has hit workers across the world, particularly women, who are over-represented in low-paid precarious sectors such as retail, tourism and food services.” Nita Bhalla reports
Modi Defeat in Regional Election Buoys Opposition Hopes Nationwide
Reuters
“Indian opposition parties and political commentators cheered the election victory of a regional leader over Prime Minister Narendra Modi's ruling party in a big battleground state as a sign his populist sway could be checked.”
“Sunday's defeat came as Modi is being slammed publicly for failing to tackle India's explosive spike in coronavirus infections that has left the country in deep crisis, with hospital and crematoriums swamped and people dying for lack of oxygen.”
“Modi addressed dozens of political rallies in the state of West Bengal hoping to widen the appeal of his Hindu nationalist Bharatiya Janata Party (BJP) to the east of the country from its traditional northern and western strongholds.”
“But West Bengal Chief Minister Mamata Banerjee, who ran the campaign for her regional party from a wheelchair because of a fall at a rally, won a two-thirds victory, raising opposition hopes Modi could be challenged across the country.”
"‘What Bengal does today, India does tomorrow,’ columnist Shobhaa De wrote in The Print, paraphrasing a quotation by 19th century liberal Gopal Krishna Gokhale.”Sanjeev Milani reports.
Hong Kong Emerges From Longest Recession in Decades
Channel News Asia
“Hong Kong's economy jumped back into growth in the first quarter of the year, official figures showed on Monday (May 3), ending the city's most pronounced period of recession in its modern history.”
“The international financial hub has been battered in the last 18 months by a triple whammy of the United States-China trade war, months of social unrest and then the COVID-19 pandemic. It recorded six consecutive quarters of negative growth, a more prolonged downturn than during both the 1997 Asian financial crisis and the 2007 to 2008 global crash.”
“That came to an end on Monday when the government announced that the city's economy grew by 7.8 per cent on year in the first three months of 2021. Hong Kong was one of the few places in the world unlucky enough to enter the coronavirus pandemic already mired in a deep recession.”
“In 2019, months of huge and often violent protests coincided with swirling trade tensions between Beijing and the US, pummelling the economy that acts as an international gateway to China. The city was among the first places outside mainland China to record a COVID-19 infection, and the economy plunged by a record-breaking 9.1 per cent in the first quarter of 2020.”
“Since then, Hong Kong has managed to keep the virus' spread down to a little more than 11,000 infections thanks to strict quarantine and economically punishing social distancing measures.” Channel News Asia reports.
Aramco's Q1 Net Profit Surges 30% on Higher Oil Prices
The National
“Saudi Aramco, the world's largest oil-exporting company, said first quarter net profit surged 30 per cent to $21.7 billion from the year-earlier period, underpinned by higher oil prices and an improved economic environment.”
“The company beat the average $19.48 billion net profit estimate of five analysts polled by Reuters and the $18bn forecast of those surveyed by Bloomberg. Aramco plans to pay a dividend of $18.8bn in the second quarter.” Jennifer Gnana reports
What We’re Also Reading…
Largest Vietnam Conglomerate, Vingroup, Reports $1B Revenue Surge in 1Q
VN Express Business News
“Vietnam’s largest private conglomerate, Vingroup, reported a 52 percent year-on-year rise in Q1 revenues to VND23.3 trillion ($1 billion). Its consolidated post-tax profits were up 72 percent to VND868 billion ($37.6 million).”
“Nearly half the revenues, VND10.65 trillion ($461 million), came from real estate thanks to sales at some major projects such as Ocean Park, Grand Park and Smart City in Hanoi. Revenues from smartphones, cars and electric motorbikes increased by 48 percent to VND4.8 trillion.”
“Auto subsidiary VinFast in January introduced three self-driving cars that are expected to hit the market later this year. VinBus Transport Service Co. launched the nation’s first smart electric bus service in Hanoi last month. Initially the buses will only run within the Vinhomes Ocean Park urban area in Gia Lam District.”
“Revenues from tourism and entertainment, however, fell by almost half to VND933 billion because of the Covid-19 pandemic that resulted in a closure of Vietnam’s borders and suspension of international flights.”
“Vingroup last month announced plans to build an auto and parts manufacturing complex in central Ha Tinh Province. It already has one such a complex in Hai Phong City.” VN Express reports.
Little-Known Chinese Trader Buys New York Sugar in Surprise Move
Bloomberg
“A little-known Chinese trader bought a cargo of raw sugar through the New York exchange for the first time, a move that surprised the industry dominated by a few large players.”
“Honors Commodity Singapore Pte. Ltd. took delivery of about 61,000 metric tons of raw sugar to settle the expiration of futures contracts on ICE Futures U.S., according to people familiar with the matter, who asked not to be named because the information is private. This is the first time that the trader, backed by the local government of China’s Hangzhou city, tapped the exchange to obtain physical supplies of sugar.” Isis Almeida and Alfred Cang report
Chinese Banks Accused of Funding Deforestation around World
Financial Times
“Chinese banks are the second largest financers of commodities implicated in tropical rainforest deforestation, according to research that casts doubt on Beijing’s ambitions to be a global leader in the fight against climate change.”
“Data analysed by Forests & Finance, a global coalition of non-governmental organisations, showed that from January 2016-April 2020, Chinese institutions provided $15bn in loans and underwriting services to companies that traded in commodities linked to deforestation in south-east Asia, Brazil and Africa.”
“Chinese companies involved in trading pulp and paper, palm oil, soy, rubber and timber largely operate overseas and are often funded by Chinese banks, highlighting the international footprint of the country’s financial sector. Brazil accounted for the largest amount of funding linked to deforestation, but most of the loans were made within the country.” Christian Shepherd and Thomas Hale report
EU, India Revive Stalled Trade Deal Talks in Bid to Counter China Rise
Financial Times
“The EU and India plan to revive long-stalled talks on a comprehensive trade deal as they seek to deepen economic ties and respond to China’s rise. The two sides could announce as soon as Saturday the relaunch of negotiations that were suspended in 2013 amid disagreements over tariff rules for car parts and free-movement rights for professionals.”
“The resumption of talks between two of the largest economies in the world has risen as a priority for both sides in recent months as they grapple with the challenges posed by the rise of China and its model of state-backed capitalism, and the economic damage wrought by the coronavirus pandemic.”
“The move was discussed on a call on Monday morning between European Commission president Ursula von der Leyen and Indian prime minister Narendra Modi, according to a senior commission official.” The FT reports.
The Untapped Power of Patagonian Berries
BBC
“…the Mapuche have long known that these native foods carry special properties. Scientists are now catching on. The maqui is but one of more than two dozen Patagonian berries they've begun to study – and with good reason. One of the most famous berries, the strawberry, traces its origins here (what we eat today is a cross between the Virginia strawberry and the Chilean strawberry). The hope is that, as more people learn about the powerful properties of Patagonian berries, they might just find new homes on supermarket shelves outside the region.”
“…Of all the berries native to Patagonia, the maqui (Aristotelia chilensis), murta (Ugni molinae) and calafate (Berberis microphylla) have received the most attention for both their distinct flavours and potential health benefits. The juice of these powerful berries was like an ancient form of Red Bull used to fuel battles and power expeditions of the Mapuche, Tehuelche, Selk'nam and other indigenous groups.” Mark Johanson reports
UAE, Saudi To Lead E-Commerce Growth in MEASA Region
Gulf News
“Online buying and selling in the UAE and Saudi Arabia will hit growth rates of 40 per cent plus, helping drive overall ecommerce volumes in the Middle East, Africa and South Asia (MEASA) to $148.5 billion by end next year.”
“UAE and Saudi Arabia will be among the fastest growing online marketplaces, with 40% year-on-year growth. In fact, the Gulf markets as a whole will have the fastest growth within this territory, while in terms of size, it will be South Asia at the top, according to a new report Dubai CommerCity.”
“The MEASA territory’s e-commerce market is growing annually at 18.4 per cent, higher than the 16.6 per cent globally over the 2019-22 period. The Dubai CommerCity, which is a free zone located next to Dubai International Airport, covers 2.1 million square feet and will entail an investment of around Dh3.2 billion. It provides business setup solutions, as well as e-commerce strategy consulting, guidance on e-commerce regulations, and end-to-end logistics solutions.”
“African markets represent at least 19 per cent of sales within the MEASA universe. Nigeria is the second largest e-commerce market in the region at $7.7 billion sales, with South Africa and Morocco also making it to the Top 10. Gulf News reports.” Gulf News reports.