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Emerging Markets Daily-October 24-25
Tesla Hits $1 Trillion Value, Erdogan De-Escalates Diplomatic Row with West, Sudan Military Coup Draws Protests, Volvo's Shaky IPO, Saudi Infrastructure and BlackRock
The Top 5 Stories Shaping Emerging Markets from Global Media - October 24-25
Tesla Hits $1 Trillion in Market Value, A First For a Carmaker
“Tesla has become the first carmaker to be valued at $1tn after rental group Hertz said it had ordered 100,000 Tesla Model 3 sedans to electrify its fleet.”
“Tesla shares rose 9.84 per cent in mid-day trading on Monday to $998.74, bringing year-to-date gains above 40 per cent and lifting the company’s market cap to $1tn…”
“Tesla overtook Toyota in July 2020 to become the world’s most valuable carmaker by market value. Since then, its value has increased fivefold with the company now worth more than all other public automakers combined.”
“It is the sixth American company to hit a trillion-dollar valuation following Apple, Microsoft, Alphabet, Amazon and Facebook. The company has defied doubters, and after being mocked for years for never producing two consecutive quarters of profit, it has now earned net income for nine in a row.” The FT reports.
Erdogan Drops Demand for Western Ambassador Expulsions
“President Recep Tayyip Erdogan dropped his demand for 10 Western ambassadors to be expelled from Turkey, deescalating a diplomatic row that had shaken the lira and was set to bring Ankara’s ties with key partners to the brink of collapse.”
“Erdogan said the envoys, including the U.S. ambassador, had issued a statement to undo the ‘slander’ caused by their earlier joint demand for Turkey to release a businessman and government critic who’s been in jail for four years. ‘Our intention is never to cause a crisis,’ he said in televised comments after a cabinet meeting in capital on Monday. ‘It’s about protecting our country’s sovereign rights.’”
“The row alarmed Turkish administration officials who’ve scrambled to convince Erdogan to back down, according to officials with direct knowledge of the matter. Senior advisers briefed the presidency earlier Monday on the possible economic fallout of a new diplomatic spat, recommending that the government not take any steps that would effectively force the envoys to leave, the officials said.” Selcan Hacaoglu reports.
Geopolitics: Sudan Military Coup Draws Thousands in Street Protests
Wall Street Journal
“Thousands of Sudanese pro-democracy protesters streamed into the streets of the capital on Monday to reject a military coup of the transitional government that has ruled the country since the ouster of longtime dictator Omar al-Bashir.”
“In a statement broadcast on state television, Sudan’s most senior military leader, Gen. Abdel Fattah al-Burhan, declared a state of emergency across the strategic nation on the Horn of Africa and announced the dissolution of the transitional government, which included both civilian and military officials. He said a new caretaker government would soon be appointed to lead the country to elections in July 2023.”
“The statement followed reports earlier Monday from the Sudanese Information Ministry and several government officials that Prime Minister Abdalla Hamdok, his wife and other civilian leaders had been detained by the military. The ministry said Mr. Hamdok and the others were taken to an undisclosed location after the prime minister declined to endorse what it said was a military coup.”
“‘We call on the Sudanese people to go out and demonstrate and use all the peaceful means to recover their revolution from any kidnapper,’ the ministry said. Across Khartoum, the capital, protesters erected roadblocks, burned tires and shouted slogans rejecting a return to military rule. Several labor unions called on their members to walk off the job in a show of civil disobedience. Soldiers, police and members of the paramilitary Rapid Support Forces, meanwhile, patrolled bridges and key intersections in the capital.” Nicholas Bariyo and Gabriele Steinhauser report.
Volvo Cars Scales Back IPO After Investors Balk at Geely of China’s Control
“Volvo Cars is cutting the size of its stock market listing, pricing it at the bottom of its suggested range and delaying it by a day after the Chinese-controlled carmaker struggled to attract investor interest.”
“The Swedish group said on Monday that it would now list on Friday, a day later than scheduled, at a price of SKr53 a share, which would give it a market capitalisation of about $18bn with the offering now fully backed by investors.”
“The carmaker is looking to raise SKr20bn ($2.3bn) from the initial public offering in Stockholm, down from its initial expectations of SKr25bn, while its Chinese owner Geely will no longer exercise an option that could have added about a fifth to the share sale.”
“Volvo's stuttering IPO, three years after it was forced by a US-Europe-China trade war to pull a previous listing, has underscored the reticent attitude of some investors towards Beijing and traditional carmakers.”
“Geely had already been forced on Friday to loosen its almost total grip on Volvo by converting its vote-heavy class of shares into normal stock to head off a backlash from Swedish institutional investors.”
“There had been widespread fears about the control the Chinese carmaker would have under its original plan to retain 98 per cent of the voting rights even after its capital stake was due to fall to 83 per cent.” Nikkei Asia reports.
BlackRock to Work With Saudi Fund on $53 Billion Infrastructure Plan
“US asset management giant BlackRock will work with Saudi’s National Development Fund (NDF) to help plough up to SR200 billion ($53 billion) into the Kingdom’s infrastructure over the next ten years, it has been announced.”
“BlackRock will act as an advisor on running a National Infrastructure Fund, which will help deliver investment between now and 2030 in assets such as schools, hospitals, transport, and the digital foundation.”
“Announced on the eve of the Future Investment Initiative in Riyadh, the agreement is a significant step for the NDF, the lesser-known of the Kingdom’s agents for economic development, in comparison to its high-profile collaborator, the Public Investment Fund.” Arab News reports.
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