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Emerging Markets Daily - October 4
Africa PE Fund Raises $900 Million, India Power Crunch Looms, Airline Losses Falling, Amazon Rival Noon Draws PIF Funding, China Probes Taiwan Airspace
The Top 5 Emerging Markets Stories from Global Media - October 4
Africa-Focused PE Fund Raises $900 Million - Investments Target Fast-Growing Middle Class
Private Equity News
“Development Partners International (DPI) has closed its third Africa-focused fund at US$900m, as it looks to tap into companies that are benefitting from the continent’s fast-growing middle class.”
“DPI’s African Development Partners III Fund exceeded its $800m target and has secured an additional $250m of capital to co-invest in companies, including those leading the digital transformation of the economies in which they operate.”
“‘Africa remains an exciting investment destination with positive demographics, rising adoption of technology, and rising consumer and business spending,’ Runa Alam, co-founder and chief executive of DPI, which has $2.8bn in assets under management, said. ‘Against this backdrop, DPI has continued to generate top quartile returns by leveraging our team’s deep-rooted local expertise across the African continent,’ she added.”
“ADP III has made four investments to date, including Channel VAS, a leading global fintech business providing mobile financial services; SICAM, a leading Tunisian tomato producer, in one of the largest private equity transactions undertaken in the country and Kelix Bio, a biopharmaceutical platform broadening access to speciality generic drugs across Africa.”
“Investors in the ADP III included pension and sovereign wealth funds, development finance institutions, endowment and foundations, insurance companies, and impact investors. The global investor base represents 20 countries across north America, Europe, the Middle East and Africa.”
“In addition to existing investors, DPI attracted 25 new LPs into its investor base.” Lina Saigol reports.
Power Crunch Looms in India As Coal Stocks Hit Crisis Point
“India is the latest country to face a severe power crisis that threatens to undermine its recovery from the pandemic, with authorities warning that power plants have run perilously low on coal.”
“According to India’s power ministry, the 135 thermal power plants of Asia’s third-largest economy had an average of just four days of coal stocks as of Friday, down from 13 days of supplies in early August…”
“‘The [Indian] power sector is facing a kind of perfect storm,’ said Aurodeep Nandi, India economist at Nomura Financial Advisory and Securities…India’s power generators cut down on coal imports in recent months, as international prices surged on the back of robust global demand, from Europe as well as China.”
“…coal from Indonesia, one of India’s major suppliers, rose from $60/ton in March to $200/ton in September, discouraging imports.” Amy Kuzmin reports.
IATA Sees Sharp Fall in Airline Losses in 2022 Amid Multispeed Recovery
“Global airlines on Monday projected a sharp reduction in industry losses next year as a multispeed recovery from the coronavirus crisis gets under way, but revised up the financial toll inflicted by the pandemic in 2020 and 2021.”
”The International Air Transport Association, the industry's main trade body, predicted that net losses at airlines would narrow to $11.6 billion in 2022 from $51.8 billion this year. The losses for 2021 were revised up from $47.7 billion estimated in April.”
”IATA also revised up losses for 2020 to$137.7 billion from $126.4 billion estimated earlier. ‘We are past the deepest point of the crisis,’ IATA Director General Wilie Walsh told the group's annual meeting.” Korea Herald/Reuters reports.
Amazon Rival Noon to Draw $2 Billion from PIF, Other Backers
“Amazon.com Inc’s Middle Eastern rival Noon.com is set to draw as much as $2 billion in financing from investors including Saudi Arabia’s sovereign wealth fund over three to four years, as it seeks to capture a larger slice of the Gulf e-commerce market.”
“The investments from the Public Investment Fund and others will be used to upgrade infrastructure and help speed up deliveries, Noon founder Mohamed Alabbar said late on Sunday. ‘They are happy with our progress and they are happy to fund,’ he said.”
“The Middle East has been slower to adapt to e-commerce than other regions, although lockdowns to combat the coronavirus pandemic last year have accelerated the shift to online shopping and food delivery. Alabbar said e-commerce currently accounts for 2% to 2.5% of total retail in the region, compared with 20% to 22% in the western world and China.”
“Noon operates in the United Arab Emirates, Saudi Arabia and Egypt and is looking to expand in other nations across the Middle East. The PIF, as the Saudi wealth fund is known, declined to comment.”
“‘We have a long way to go,’ Alabbar said. ‘There is a lot of room for growth and a lot of countries to cover.’ Alabbar, who owns 50% of Noon jointly with other regional private investors, raised $1 billion from backers including the PIF to create the firm in 2016. It now has about 4 million daily users and growth is accelerating as it pushes into grocery delivery.” Zainab Fattah reports.
China Military Planes Continue to Probe Taiwan Airspace - Bombers, Anti-Submarine Planes in Nighttime Intrusions
New York Times
“Record-breaking numbers of Chinese military planes probed the airspace near Taiwan over the weekend, prompting Taiwanese fighter jets to scramble and adding muscle to Beijing’s warnings that it could ultimately use force to take hold of the island.”
“The sorties by nearly 80 People’s Liberation Army aircraft on Friday and Saturday, as China observed its National Day holiday, followed a pattern of Beijing testing and wearing down Taiwan by flying over seas southwest of the island. The most recent flights stood out because of the number and types of planes involved, including bombers and anti-submarine planes on nighttime intrusions.”
“The flights did not suggest an imminent threat of war over Taiwan, said several analysts, but they did reflect Beijing’s increasingly unabashed signaling that it wants to absorb the self-ruled island and will not rule out military means to do so.”
“‘Coming on Oct. 1, China’s National Day, it sends a message about Beijing’s determination to claim Taiwan, by force if necessary,’ said Adam Ni, an Australian analyst of Chinese military policy who is based in Germany. ‘The aim of this is to assert Beijing’s power and show military muscle.’” The New York Times reports.
"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat." - Theodore Roosevelt, April 23, 1910