Emerging Markets Daily - September 22

SE Asian Economies Hit by Low Vaccination, Africa Fintech, Iran-Saudi Diplomacy Grows, Zee and Sony Pictures India Merger, Xi Says No More Coal Plants Abroad

The Top 5 Stories Shaping Emerging Markets from Global Media - Sept 22

  1. Low Vaccination Rates Drags Down Southeast Asian Economies

    Financial Times

    “South-east Asian countries that failed to administer Covid-19 vaccines fast enough and are suffering outbreaks of the disease are causing a growing regional economic divergence, the Asian Development Bank said on Wednesday.”

    “The ADB cut its 2021 growth forecasts for leading economies including Thailand, Indonesia, the Philippines and Vietnam even as it raised its forecasts for China, Taiwan and South Korea…

    “The bank said recovery in several of the region’s largest economies was being held back by new waves of infections and slower progress on vaccination…  The bank said it expected south-east Asian economies to grow on average by 3.1 per cent this year, more slowly than the 4.4 per cent it forecast when it published its previous economic outlook in April."  

    The ADB cut its forecast for Indonesia, south-east Asia’s largest economy, by a percentage point to 3.5 per cent and for Thailand, the second largest, by more than 2 percentage points to 0.8 per cent, compared with its earlier forecasts…In Vietnam, formerly one of Asia’s fastest growing economies, where an outbreak of the Delta variant concentrated in Ho Chi Minh City has crippled business, the ADB slashed its growth forecast to 3.8 per cent, from 6.7 per cent.” John Reed reports. 

  2. Investors Flock to Africa Fintech

    African Business

    “..A majority of Africa’s newly emerging ‘unicorns’ – tech companies valued at over $1bn each – focus on payments. Nigeria’s Interswitch, which offers payment cards and digital payments and processes most of Nigeria’s electronic bank, government and corporate transactions, passed $1bn in 2019.

    “Its compatriot Flutterwave was valued at $1bn after closing funding of $170m in 2021. The firm offers partnerships with Visa and with Chinese e-commerce giant Alipay (part of Alibaba) for digital payments between China and Africa. Egypt’s Fawry offers financial services to customers and businesses through 225,000 locations and offers e-commerce with 29m monthly users and 3.1m transactions a day.” 

    “Other financial technology valuable firms with an African focus including OPay, Wave, Paga and Haystack. Investors from Silicon Valley to China have caught the African fintech bug. Lagos is attracting the lion’s share of investments after stealing Nairobi’s crown as leader of Africa’s tech revolution. Nigeria entices investors with the world’s seventh biggest population…” 

    Nigeria has attracted more than $1bn in venture capital investment in the last two years. In one week in November 2019 the inflow totalled $400m: Visa invested $200m in Interswitch, a group of investors led by Sequoia Capital China and SoftBank Ventures Asia invested $120m in OPay, and China’s Tassion invested $40m in PalmPay. This was a significant proportion of the total $1.2bn invested via venture capital tech in Africa in 2019…” Tom Minney reports.

  3. Geopolitics: Iran-Saudi Diplomacy Grows Amid Nuke Talks Momentum

    Bloomberg

    “Top diplomats from Iran, Saudi Arabia and the European Union met for the second time in less than a month on Tuesday in a sign of heightened efforts to reduce tensions in the Middle East as Tehran prepares to resume talks on the 2015 nuclear deal.”   

    The gathering at the Iraqi ambassador’s residence in New York brought together ‘foreign ministers and senior representatives’ of Iran, Saudi Arabia, Kuwait, Egypt, Qatar, Jordan, Turkey, France, the EU, the Arab League and Gulf Cooperation Council, according to Iran’s semi-official Mehr news agency…

    “Iran’s foreign ministry described the event with Arab neighbors as a follow-up to an Aug. 28 summit in Baghdad, which had provided a rare forum for official contact between the Islamic Republic and Saudi Arabia since they cut diplomatic ties in 2016. Participants agreed to meet again in Jordan at an unspecified date, the ministry said in a statement.”

    “Earlier on Tuesday, Iran said it expected talks with world powers to restore the 2015 multinational accord that the U.S. abandoned three years ago with Saudi Arabia’s backing, to resume within the month ahead.”

    “Europe has been urging Iran to restart the negotiations, which were stalled after the June election of Iran’s hardline President Ebrahim Raisi. Both Raisi and his U.S. counterpart Joe Biden want to resurrect the six-year-old nuclear agreement but need to bridge important differences over how they return to full compliance with its terms.” Patrick Sykes reports.  

  4. Zee to Merge With Sony Pictures India

    Hollywood Reporter and Financial Times

    “Zee Entertainment Enterprises and Sony Pictures Networks India are set to merge creating a new content powerhouse in India. The companies announced on Wednesday that they have entered exclusive merger talks that will combine both their linear networks, digital assets, production operations and program libraries.”

    “The deal brings together Zee’s strength in linear television, as well as its interests in print, internet, film production, mobile content and its 4,800 film library that will combine with SPNI’s film and television production and its entertainment and sports television networks

    “Sony Pictures Entertainment will inject capital into SPNI, approximately $1.575 billion, as part of the growth plan for the new entity that includes building out its digital platforms and bidding for sports rights.” Amid rahman reports.

    Meanwhile, the FT reports that “Zee’s Mumbai-listed shares surged 24 per cent on Wednesday after the deal was announced. News of the merger came days after Zee’s biggest shareholder, US investment group Invesco, launched an effort to overhaul the board and oust chief executive Punit Goenka, the son of founder Subhash Chandra, amid dissatisfaction with the media group’s performance and corporate governance.

  5. China’s Xi Pledges: No More Coal-Fired Power Plants Abroad

    Reuters

    “Chinese leader Xi Jinping said on Tuesday that China would not build new coal-fired power projects abroad, using his address at the United Nations General Assembly to add to pledges to deal with climate change.”

    Xi provided no details, but depending on how the policy is implemented, the move could significantly limit the financing of coal plants in the developing world. China has been under heavy diplomatic pressure to put an end to its coal financing overseas because it could make it easier for the world to stay on course to meet the goals of the Paris climate agreement to reduce carbon emissions.”

    Xi's announcement followed similar moves by South Korea and Japan earlier this year, and U.N. Secretary-General Antonio Guterres and U.S. climate envoy John Kerry have urged China to follow the lead of its Asian counterparts.” Reuters reports.

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