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Emerging Markets Daily - October 18
India Stocks Hit All-Time High, Oil at $100/Barrel Possible Soon, NATO Expands to Focus on China, Crypto Rising in Dubai, Kenyan Coffee Farmers and High Prices
The Top 5 Stories Shaping Emerging Markets from Global Media - October 18
India’s Equity Benchmark Sensex Hits All-Time High
“Taking its winning streak to the seventh session, equity benchmark Sensex rallied 460 points to finish at a fresh lifetime peak on Monday, tracking heavy buying in banking, IT and metal stocks despite a weak trend in global markets.”
“After touching a lifetime high of 61,963.07 during the session, the 30-share BSE index ended 459.64 points or 0.75 per cent higher at its new closing record of 61,765.59.”
“Similarly, the Nifty surged 138.50 points or 0.76 per cent to its all-time closing high 18,477.05. It touched a new intra-day record of 18,543.15.”
“Infosys was the top gainer in the Sensex pack, jumping over 4 per cent, followed by Tech Mahindra, Tata Steel, ICICI Bank, ITC, Maruti, SBI and Axis Bank.” Hindustan Times reports.
Oil at $100 a Barrel Is ‘Possible’ This Winter, Top Trader Says
“It’s ‘possible’ that oil will hit $100 a barrel this winter, but $80 to $90 is the expected range, said Marco Dunand, the chief executive officer of commodities trader Mercuria Energy Group Ltd.”
“With surging energy costs contributing to inflation, as the global economy recovers from the pandemic, prices could still go higher, Dunand said at the BloombergNEF summit in London on Monday afternoon.”
“‘It’s difficult to think the psychology of the market can be anything but bullish ahead of the winter,’ he said. ‘We have a bullish view on commodities and on energy.’”
“Global climate talks that will kick off in Glasgow later this month come at a difficult time, as world leaders balance their climate ambitions with their current reliance on fossil fuels to power their economies.” Will Mathis and Javier Blas report.
Geopolitics: NATO Expands Focus to Counter Rising China
“Countering the security threat from the rise of China will be an important part of Nato’s future rationale, the alliance’s head has said, marking a significant rethink of the western group’s objectives that reflects the US’s geostrategic pivot to Asia.”
“In an interview with the Financial Times, Nato secretary-general Jens Stoltenberg said that while China was not an ‘adversary’, it was having an impact on European security through its cyber capabilities, new technologies and long-range missiles.”
“How to defend Nato allies from those threats will be ‘thoroughly’ addressed in the alliance’s new doctrine for the coming decade, he said. The military alliance has spent decades focused on countering Russia and, since 2001, terrorism.”
“The new focus on China comes amid a determined shift in the US’s geopolitical orientation away from Europe to a hegemonic conflict with Beijing. ‘Nato is an alliance of North America and Europe. But this region faces global challenges: terrorism, cyber but also the rise of China. So when it comes to strengthening our collective defence, that’s also about how to address the rise of China,’ Stoltenberg said.”
“‘What we can predict is that the rise of China will impact our security. It already has.’ Nato will adopt its new Strategic Concept at a summit next summer, which will outline the alliance’s purpose for the following 10 years. The current version, adopted in 2010, does not mention China.” Roula Khalaf and Henry Foy report.
Dubai Expects to Have More than 1,000 Crypto Businesses By 2022
“Dubai is expecting more than 1,000 cryptocurrency businesses to be operational by 2022, as it accelerates efforts to boost its digital economy.”
“Dubai and Abu Dhabi have implemented an advanced framework to encourage entrepreneurs in the crypto space to set up exchanges while laying out rules to protect consumers…”
“Interest in cryptocurrencies and blockchain is growing, especially in the UAE, as consumers and investors flock to digital assets with online payments gaining pace. A growing number of institutional investors and wealth managers in the UAE plan to increase their exposure to cryptocurrency assets between now and 2023, according to a survey by Nickel Digital Asset Management, based in London.”
“Cryptocurrencies are not licensed by the UAE Central Bank although a number of cryptocurrency exchanges have been given permission to operate within the financial free zones. The UAE dirham is the only legal tender in the country that is recognised by the Central Bank.”
“The DMCC Crypto Centre – launched in May to promote cryptographic and blockchain technologies in Dubai – is home to more than 100 organisations operating in the crypto space, with a further 900 more having applied for licences. There are more than 400 crypto businesses operating in the UAE.” Alvin R. Cabral reports.
Kenyan Farmers to Miss out on Global Coffee Price Rise
The East African
“Kenyan coffee farmers should not expect a boom from recent high prices, thanks to long-term deals they signed. The high prices have been occasioned by Colombia — the world second biggest producer of coffee — that failed to supply one million bags to roasters, buyers and exporters.”
“World coffee prices have soared 55 percent this year, mainly due to adverse weather in Brazil — world top producer — prompting Colombian farmers to default on sales agreed when prices were lower in order to re-sell the coffee at higher prices.”
See also the Emerging World column “Globalization in a Mug”
“Nairobi Coffee Exchange Chief Executive Daniel Mbithi said despite high world prices, farmers have binding existing long-term contracts with dealers who sell on their behalf in the world market and who are buying the commodity on an agreed price, set when demand was low.”
“‘Majority of farmers already have contracts with buyers, and dealers even risked to buy beans when prices were low, hence making the current situation tricky. The best way for farmers to benefit from this is to renegotiate their contracts with buyers following the global price hike,’ said Mbithi.” Anthony Kitimo reports.
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