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Emerging Markets Daily - May 6
SPACs and Emerging Markets, MTN's Big Tech Dreams, Mubadala Record Income, More Asian Companies Bet on Bitcoin, Deadly Colombia Protests, and Jamie Dimon is "Done with Zoom Meetings" and More...
The Top 5 Emerging Market Stories from Global Media - May 6
The Promise of SPACs for Emerging Markets
Marker (Alexandre Lazarow and Allen Taylor)
“Last month, Grab announced it would go public via SPAC. This is an incredible milestone in the world of SPACs (“Special Purpose Acquisition Companies), a sector that has exploded in the last two years. Grab’s SPAC deal — valuing the company at nearly $40B — is the largest in history globally, more than double the previous record.”
“While that in of itself is noteworthy, it isn’t the punch line.”
“Grab is not a traditional Silicon Valley company. Instead, it is the leading super app in South East Asia, with a primarily emerging market user base. And when it comes to SPACs and emerging markets, Grab is not alone.”
“Other Southeast Asian tech giants — like Go-Jek, Tokopedia and online travel leader Traveloka — are reportedly in advanced talks to go public via SPAC. Elsewhere, Anghami, the leading music streaming service in the Middle East and North Africa (MENA), is set to become the first technology company from MENA to be listed on the Nasdaq when it lists next month via SPAC. And others are starting to take notice of what the SPAC explosion means for Latin America.”
“While the newscycle will have us believe SPACs are a Silicon Valley phenomenon, they are globalizing. And for emerging markets, that’s a good thing. SPACs offer access to smart capital at scale, global visibility and connectivity, and a founder-centric capital source for those visionary entrepreneurs who are building the iconic companies of the future.” Alexandre Lazarow and Allen Taylor write.
MTN Dreams of Making it Big in the African World of Big Tech
The Africa Report
“Inspired by Apple and WeChat, Africa's leading telecoms operator MTN is making a strategic shift and transforming itself into a tech platform.”
“MTN’s management team has been smiling since 26 April. Since that day, the South African operator has been one of only two bidders – in addition to a consortium made up of Vodafone, Vodacom and Safaricom – to apply for one of the two future telecoms operator licences in Ethiopia, which is one of the last African markets to open up to competition in the sector.”
“…MTN’s CEO Ralph Mupita, who has been at the helm of this operator since August 2020, defined a new strategy a month ago, the first step of which was accessing the Ethiopian market.” Quentin Velluet reports
Mubadala’s Investments Drive Record Annual Income
“Mubadala Investment Co. joined global investors like KKR & Co. in pouncing on opportunities presented by the pandemic, embarking on a record dealmaking spree while many of its peers among sovereign wealth funds hunkered down.”
“In a year that saw the worst oil-price crash in a generation, Mubadala delivered a record income for the Abu Dhabi government as it doubled down on a bet that sectors like technology and consumer goods will benefit the most from the economic recovery. Abu Dhabi’s second-largest wealth fund said on Thursday that new investments last year amounted to 108 billion dirhams ($29.4 billion).” Nicolas Parasie reports
Asian Companies Accelerate Shift to Bitcoin as Price Surges
“Companies in Asia are beginning to bet on cryptocurrencies, with South Korean gaming giant Nexon following the lead of companies such as Tesla and digital payments specialist Square, with a $100 million allocation into bitcoin.”
“On April 28, Nexon said that it has shifted part of its cash into the cryptocurrency, purchasing 1,717 bitcoins at an average price of about $58,226 per bitcoin, including fees and expenses, for around $100 million.”
“…Earlier in April, Meitu, the developer of China's wildly popular beauty-enhancing photo app, Meitu Xiuxiu, revealed that it had accumulated a total of about $100 million worth of bitcoin and Ethereum. The Hong Kong-listed company had previously announced plans to buy up to $100 million worth of cryptocurrency with cash reserves.” Jada Nagumo reports
Deadly Protests in Colombia Could Presage Further Unrest in Latin America
New York Times
“A teenager shot to death after kicking a police officer. A young man bleeding out on the street as protesters shout for help. Police officers firing on unarmed demonstrators. Helicopters swarming overhead, tanks rolling through neighborhoods, explosions echoing in the streets. A mother crying for her son…”
“Colombians demonstrating over the past week against the poverty and inequality that have worsened the lives of millions since the Covid-19 pandemic began have been met with a powerful crackdown by their government, which has responded to the protests with the same militarized police force it often uses against rebel fighters and organized crime.”
“This explosion of frustration in Colombia, experts say, could presage unrest across Latin America, where several countries face a combustible mix of an unrelenting pandemic, growing hardship and plummeting government revenue.”
“‘We are all connected,’ said León Valencia, a political analyst, noting that past protests in Latin America have jumped from country to country. ‘This could spread across the region.’” Julie Terkewitz and Sofia Villamil report.
Notable Quotable: Jamie Dimon Editon - “I’m done with [Zoom]” and US Set to Boom
In an interview with the Wall Street Journal, the JP Morgan CEO said he wants to see his staff back at work in the fall, and that he is done with Zoom. He also said the US could be headed for a “Goldilocks” economy of fast growth and only mild inflation, while warning that that government over-regulation hurts small businesses and others.
“We want people back at work and my view is some time in September, October, it will look just like it did before. Yes, people don’t like commuting, but so what?”
“I’m about to cancel all my Zoom meetings. I’m done with it.”
“The boom is good. Employment is good. Growth is good, Everyone should enjoy it.”
“The can-do nation (USA) became the nation of red tape.”
Does Zoom CEO have Zoom meeting fatigue?
Well, yes, sort of, according to the Wall Street Journal. Zoom CEO, Eric Yuan, told the Journal: “I no longer book back-to-back Zoom calls. I do have meeting fatigue.”
He once had a marathon day of 19 Zoom meetings in a row. Ouch.
What Else We’re Reading…
Allianz Buys Majority of Kenya Insurer, Eyes Ethiopia Market
The East African
“Regional insurer Jubilee Holdings Ltd (JHL) and Germany’s insurance and asset management firm Allianz have put entry into the Ethiopian market on the radar after the conclusion of their multimillion dollar share sale deal relating to general insurance business.”
“Allianz, which serves more than 100 million retail and corporate customers in more than 70 countries worldwide on Tuesday completed the acquisition of 66 percent stake (1,522,622 ordinary shares) in Jubilee General Insurance Company (Kenya), leaving the holding company (JHL) with 34 percent of the shares.”
“Following the acquisition, Jubilee General Insurance Limited (Kenya) is now a company of the Allianz Group and upon completion of corporate filings will be renamed ‘Jubilee Allianz General Insurance Limited’.”
“The two firms (JHL and Allianz) said Tuesday the partnership gives them the synergies to jointly explore new markets, with discussions ongoing for the Ethiopian market. ‘I don’t think we have a particular limit but we have been actively in discussion with Ethiopia. But obviously it is subject to the government and the choices that Ethiopia makes,’ Coenraad Vrolijk, Allianz Africa’s regional Chief Executive, told a virtual investor briefing on Tuesday.” James Anyanzwa reports.
Japan Running Last Among OECD Nations on Vaccinations
Washington Post - William Pesek
What happened to Japan? The Asian nation - widely regarded as a world leader in the kind of nut-and-bolts logistical governance needed for a vaccination roll-out — is dead last among the 37 nations of the Organization of Economic Cooperation and Development (OECD).
“Japan’s 1.6 percent rate of vaccination puts it on par with Myanmar, a failed state — not exactly a ringing endorsement of Tokyo’s shambolic rollout,” quips longtime Tokyo resident Jeff Kingston, head of Asia studies at Temple University’s local campus. “This is an own goal of epic proportions.” It’s also trailing Colombia, Latvia, and Turkey, as William Pesek writes in the Washington Post.
Philippines President Says China is “Benefactor” While Repudiating Foreign Minister’s Profanity-Laced Comment on Beijing
South China Morning Post
“The Philippines’ top diplomat has apologised for a foul-mouthed rant on Twitter in which he told China where to go – after being informed that only the president can use curse words.”
“Foreign Secretary Teodoro Locsin Jnr issued a public apology on Tuesday to his Chinese counterpart Wang Yi for a tweet in which he called China an “ugly oaf” and demanded it “get the f***” out of Philippine waters. The tweet, sent out on Monday, was a reference to the presence of Chinese coastguard ships near to Scarborough Shoal in an area of the South China Sea claimed by both nations.”
“The area is a rich fishing ground and within the Philippines’ exclusive economic zone but is also within the nine-dash line that Beijing uses to mark its territorial claims to more than 90 per cent of the sea.Soon after Locsin’s decidedly undiplomatic language, President Rodrigo Détente said on nationwide television that ‘China remains our benefactor and … just because we have a conflict with China does not mean to say that we have to be rude and disrespectful. As a matter of fact, we have many things to thank China for – both its help in the past and its aid today.’”
Locsin's offending tweet. Photo: Twitter
“Although Duterte did not mention Locsin by name, presidential spokesman Harry Roque later confirmed that the president was referring to the foreign secretary.” South China Morning Post reports.