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Emerging Markets Daily - September 2
Taliban Rise Threatens India-Pakistan Ties, Oil Prices and OPEC+, Chinese Tech Stocks Surge, Somaliland Port Lifts Off, S. African Retailer to Exit East Africa
The Top 5 Stories Shaping Emerging Markets from Global Media - September 2
Taliban Takeover Threatens to Raise India-Pakistan Tensions
The Wall Street Journal
“The Taliban’s swift takeover has brought to power an Afghan government more closely aligned with Pakistan, stirring security concerns in neighboring India and potentially raising tensions between the two nuclear-armed rivals.”
“Officials in India, who supported the U.S.-backed government in Kabul, have warned in recent days that the Taliban’s return could again make the country a haven for terrorists. The Taliban have said they would no longer allow Afghanistan to be used against other countries, but Indian officials are skeptical.”
“‘It’s the same Taliban that was there 20 years ago,’ India’s Chief of Defense Staff Bipin Rawat said last week at a meeting on U.S.-India partnership.”
“Indian authorities are particularly concerned about security in the disputed region of Jammu and Kashmir, where a heavily militarized line of control has separated India and Pakistan since partition in 1947. India doesn’t share a border with Afghanistan, but Islamist militant groups have long targeted India over its control of a portion of Muslim-majority Kashmir…”
“Violence in the Kashmir region has the potential to escalate into a broader conflict. In 2019, India sent warplanes into Pakistan for the first time since the rivals were at war in 1971 after a Kashmiri militant killed 40 Indian paramilitary police officers. The attacker claimed in a video released after the attack to be a member of Jaish-e-Mohammed, and the Indian air force carried out strikes on what Indian officials said was a training camp of the group.”
“On Tuesday, New Delhi said the Indian ambassador to Qatar met the head of the Taliban’s political office in Doha, Sher Mohammad Abbas Stanekzai. The discussions focused on safety, security and the return of Indian nationals stranded in Afghanistan, India’s Ministry of External Affairs said. India also raised concerns about Afghan soil being used for terrorist activities, and the Taliban representative assured the ambassador that it wouldn’t be.” Rajesh Roy reports.
Oil Price Rises After OPEC+ Agrees to More Supply
“Oil prices rose in early afternoon trading on Thursday after Opec+ kept policy unchanged at its ministerial meeting, agreeing to bring 400,000 barrels per day back to markets this month.”
“Brent, the international benchmark, rose 0.46 per cent to trade at $71.92 per barrel at 1.09pm UAE time. West Texas Intermediate, which tracks US crude grades, was up 0.42 per cent at $68.88 per barrel.”
“Opec+, the oil exporters alliance headed by Saudi Arabia and Russia, has begun to taper a historic production restriction pact and plans to bring 2 million bpd back to the markets by the end of the year.”
“The group also did not succumb to pressure from the White House, which last month urged producers to bring more supply to the markets.” Jennifer Gnana reports.
Chinese Tech Stocks Hit Five Week High in Hong Kong, Pushing Back the Bears
South China Morning Post
“Hong Kong stocks rose for a fourth day as investors drove Chinese technology companies to their highest levels in five weeks as values emerged from months of sell-off.”
“The Hang Seng Tech Index, which tracks 30 of China’s biggest tech juggernauts, surged by as much as 3.2 per cent on Thursday morning, approaching the highest level since July 29. Kuaishou Technology, the worst-performing mega-listing in the city this year, rallied by as much as 11 per cent. Tencent Holdings and Alibaba Group Holding rose at least 1.7 per cent.”
“The broader Hang Seng Index gained 0.1 per cent to 26,047.95 while the Shanghai Composite Index advanced 0.6 per cent.” Zhang Shidong reports.
Somaliland Gears Up for ‘Healthy’ Battle of Ports
”Anchored at the deepwater port of Berbera, an Ethiopian-flagged ship offloads its cargo of sugar and rice coming from India in what officials hope is a sign of a fresh era of trade in the self-declared east African state of Somaliland. Thanks to a $442m investment from the Dubai-based ports operator DP World, Berbera is shaping up to regain its centuries-old trade lustre, setting up a battle of ports over a maritime thoroughfare traversed by about a third of ships worldwide.”
“The revamped port of Berbera now offers an alternative to Djibouti as a gateway to lucrative trade routes through the Suez Canal. Berbera was once the capital of the British Somaliland protectorate.”
“For centuries, until a civil war destroyed much of its facilities three decades ago, it was a hub of maritime trade between the Horn of Africa, the Arabian peninsula, and India thanks to its key location on the Gulf of Aden opposite Yemen. Now, ‘we are getting another chance to become an international business centre,’ said Berbera’s mayor, Abdishakur Mohamed Hassan.”
“Outside his office, rows of camels and herds of goats are heading to the dock, destined for the port of Jeddah in Saudi Arabia. ‘There will be a healthy competition between the neighbouring ports,’ he added.”
“Berbera’s terminal, which opened in June, can handle the world’s largest ships. Its container capacity increased from 150,000 20ft containers (TEU) to 500,000 TEU annually, and work is already under way for an expansion to handle up to 2m TEU a year.”
“The main aim of the port is to serve Ethiopia, Africa’s second most populous country, which needs ‘multiple gateways’, according to Supachai Wattanaveerachai, chief executive of DP World’s port of Berbera.” Andres Schipani reports.
Major South Africa Retail Store to Exit East African Market
The East African
“South African retail giant Massmart that operates the Game Stores has revealed its plan to sell its stores in Kenya, Uganda and Tanzania, marking the latest of a string of retreats from East Africa by a southern African firm.”
“The Johannesburg Stock Exchange-listed retailer announced on Friday it had put up 14 Game stores in East and West Africa for sale, citing a need to focus on its ‘core strengths’ as the group’s losses narrowed during the half-year ended June 2021.”
“Massmart chief executive Mitchell Slape said the chain had begun a formal sales process to divest in five Game stores in Nigeria, four in Ghana, three in Kenya, one in Uganda, and one in Tanzania.”
“‘We have reached the conclusion that the performance and complexity in running the 14 stores in five markets in the East and West Africa is something frankly that we needed to address,’ said Mr Slape during the group’s virtual financial results presentation on Friday.”
“The exit plan ends a five-year stint for the Sandton-headquartered retailer in Kenya and further extends the poor run by South African retailers and companies who have faced headwinds trying to crack the local market.”
“Mr Slape said the company was in advanced discussions with potential purchasers to take over its Game stores in Kenya, adding that the country alongside other regional markets remain a difficult business environment.” Brian Ngugi reports.
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