Economic and Political Weekly 25-08-2019

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World 

Politics

·  One minute it was an Afghan wedding. The next, a funeral for 63

One minute, it was a wedding – nearly 1,000 guests packed under one roof, a thin partition segregating them by gender. Men shimmied to a live band, women spun to a DJ. Their invitation cards read: We celebrate “with a world of hope and desire”. The next minute, a suicide bomber walked into the men’s section of the Kabulhall and turned it into carnage. Dozens were dead, on the dance floor and around their tables. The band perished on the stage. The women were left broken, wailing, and searching. Even by the standards of Afghanistan, where dozens are killed every day in a long war that seems out of control, the attack on Saturday night was a shock. And not just because one bomber could end at least 63 lives, wound nearly 200, and scar hundreds of others for life. It also was because of the choice of target and the timing, just as US negotiators are finalizing a deal with Taliban insurgents to extricate US forces from Afghanistan after 18 years. The Islamic State terror group asserted responsibility on Sunday for the blast and identified the bomber in such a way as to suggest he was from neighboring Pakistan, underscoring just some of the complexities in the conflict that the Americans will be leaving behind.

·  Dutch strategy of alliance with EU is opposite of UK solo run

They’ll be remembered – by statisticians at least – as three golden months for the Dutch economy, March, April and May 2019, when seasonally adjusted unemployment fell to 3.3 per cent, its lowest since before the global financial meltdown in 2008 and the euro crisis that hit the following year. Even in a world of Trump and Brexit, it seemed reasonable to see those months as evidence of a new stability after the turmoil of “the lost decade”. Especially since here was an economy with an AAA rating that had created 3.3 million new jobs between 2014 and 2017, with no sign of slowing. What Ireland’s erstwhile social partners used to call “the challenges of prosperity” were – and still are, for the time being at least – everywhere to be seen. Higher wages as a result of a more competitive jobs market have led to increased consumer spending. Heartened by customers’ new optimism, businesses have responded by digging into their cash reserves, investing 5.3 per cent more in the second quarter of 2018 than in the first. Almost unnoticed, the first quarter of this year broke two records: first, it generated the highest number of new job vacancies ever for a quarter, at 316,000 – and second, it filled the highest number of vacancies ever in a single quarter, at 302,000.

·  Ex-Sudan president Bashir got millions from Saudis, court hears

Sudan’s ousted President Omar Hassan al-Bashir acknowledged receiving millions of dollars from Saudi Arabia, a police detective told a court on 19th August at the start of a corruption trial that many Sudanese thought they would never see. Mr Bashir listened to the testimony without comment, sitting in a metal cage and wearing traditional white robes and a turban in his first appearance in a Khartoum courtroom.

· Turkish convoy hit by air strike in Syria

Air strikes on 19th August halted a Turkish armored convoy by targeting its route as it entered Idlib province in northwest Syria. The Turkish defense ministry condemned the attack on what it said was a supply column bound for ceasefire monitoring positions near the town of Khan Sheikhoun in Idlib, and that three civilians were killed.

·  Key town after rebel withdrawals

Syrian government forces look set to recover a strategic town that has been in rebel hands since 2014 in a major Russian-backed offensive into the opposition’s last major stronghold. An organization that monitors the war and a pro-Damascus military source said insurgents had withdrawn from Khan Sheikhoun overnight, though the main insurgent group in the area said rebels still held part of the town and fighting continued.

·  Brexit: Merkel gives Johnson 30-day deadline to avoid no-deal

British Prime Minister Boris Johnson has welcomed a potential “blistering timetable of 30 days” to find an agreement with the EU on the terms of Brexit. He was responding to a suggestion by German chancellor Angela Merkel that a short timeframe for negotiations on a Brexit deal was possible.

  • The United States and the Taliban officials resumed talks in Qatar on 22nd August to firm up a deal enabling the withdrawal of US troops from Afghanistan in return for the Taliban security guarantees, the Taliban and senior US official said.

After 18 years of war and months of direct talks with the Taliban leaders, the US appears to be at the cusp of reaching a deal that could allow a pullout of foreign forces followed by a ceasefire between the warring sides. Two Taliban spokesmen said the ninth round of talks between the US and the Taliban representatives started on Thursday evening, and a senior US official privy to the peace negotiations said the “crucial meeting iron out smaller details had begun” in Qatar’s capital city, Doha. About 20,000 foreign troops, most of them American, are now in Afghanistan as part of a US-led NATO mission to train, assist and advise Afghan forces. Some US forces carry out counter-terrorism operations.

· Thunderstorm in Poland kills five and injures more than 100

Four people, two of them children, died and more than 100 were injured during a thunderstorm in Poland’s Tatra Mountains on 22nd August, prime minister Mateusz Morawiecki has said. A fifth person was killed by the storm in the West Tatras in neighboring Slovakia, mountain rescue services reported.

· Cracks are appearing in the Mideast’s most important alliance. That’s bad news for Trump

The partnership of Saudi Arabia and the United Arab Emirates is the closest anywhere in the Middle East. It goes back decades, fashioned by antipathy towards Iran and support for Sunni causes across the Muslim world. So when Mohammed bin Salman, now Crown Prince of Saudi Arabia, launched a military campaign against the Houthi rebels in Yemen four years ago, it was no surprise the UAE joined the offensive. The two states have also spearheaded an embargo against Qatar and have been vociferous supporters of the Trump administration’s sanctions against Iran. They have both supported, financially and rhetorically, President Abdel Fattah el-Sisi in Egypt. And there is a close personal relationship between Mohammed bin Salman and the effective leader of the UAE, Crown Prince Mohammed bin Zayed. But cracks have begun to appear in the region’s most important alliance, as the Yemen campaign staggers toward stalemate and tactics differ over confronting Iran’s behavior in the Gulf. And that may become a headache for the Trump administration, already frustrated by the Saudi-UAE spat with Qatar. The original purpose of the Yemen offensive was to blunt Iranian influence wielded there through the Houthi rebels. But ‘Operation Decisive Storm’ has turned out to be far from decisive. It became a quagmire — and a PR disaster because of the huge civilian suffering. The UAE seems to have concluded that the war is unwinnable and too costly to pursue and began drawing down its forces in Yemen in July — though it remains committed to counter-terrorism strikes against the Yemeni affiliates of al Qaeda and ISIS.

·  Hong Kong protesters form human chains ‘up to 40km long’

Supporters of Hong Kong’s pro-democracy movement created human chains on both sides of the city’s harbor, inspired by a protest 30 years ago in the Baltic States against Soviet control.

They linked hands at first, then many switched on their Smartphone lights and held them up to create a row of white lights against the night-time skyline.

Economy

  • Can Fed chief dig himself out of a (Jackson) Hole?

 

Jerome Powell may be “clueless” according to US President Donald Trump. But when the Federal Reserve head takes centre stage at a gathering of the banking elite this weekend there’ll be plenty of people watching for his clues on restoring global economic balance. It’s the annual symposium of central bankers from around the world, held in the picturesque Wyoming mountain village of Jackson Hole. Mr. Powell’s keynote speech is the much-anticipated highlight. According to Sarah House, senior economist at Wells Fargo Securities: “The whole point [of Jackson Hole] is to get away, take a step back from what we are currently seeing in the economy, and talk about some of the longer term issues.” But will Mr. Powell have that luxury? Such is the anxiety gripping financial markets, there’s an expectation he needs to address immediate issues: interest rate direction, conflicting signals on Wall Street, the China trade row, stimulus, perhaps even Mr. Trump’s constant sniping. Mr. Powell faces a balancing act: Calm jittery financial markets without antagonizing. 

GLOBAL INDICES AS OF 23rd and 24th August 2019

As compared to 16th and 17th August 2019

 

Global indices as of 23rd and 24thth August 2019
Name Current Value Prev.

Close

US MARKETS
 NASDAQ (Aug 23) 7,751.77 7991.39
EUROPEAN MARKETS
 FTSE (Aug 23) 7,094.98 7128.18
 CAC (Aug 23) 5,326.87 5388.25
 DAX (Aug 23) 11,611.51 11747.04
ASIAN MARKETS
 SGX NIFTY (Aug 24) 10,865.50 10829.50
 NIKKEI 225 (Aug 23) 20,710.91 20628.01
 STRAITS TIMES (Aug 23) 3,110.35 3127.74
 HANG SENG (Aug 23) 26,179.33 26048.72
 TAIWAN WEIGHTED (Aug 23) 10,538.11 10529.78
 KOSPI (Aug 23) 1,948.30 1951.01
 SET COMPOSITE (Aug 23) 1,646.68 1633.56
 JAKARTA COMPOSITE (Aug 23) 6,255.60 6239.25
 SHANGHAI COMPOSITE (Aug 23) 2,897.43 2883.44

 

Global indices as of 16th and 17th August 2019
Name Current Value Prev.

Close

US MARKETS
 NASDAQ (Aug 16) 7,895.99 7766.62
EUROPEAN MARKETS
 FTSE (Aug 16) 7,117.15 7067.01     
 CAC (Aug 16) 5,300.79 5236.93     
 DAX (Aug 16) 11,562.74 11412.67     
ASIAN MARKETS
 SGX NIFTY (Aug 17) 11,069.50 11054.00     
 NIKKEI 225 (Aug 16) 20,418.81 20405.65     
 STRAITS TIMES (Aug 16) 3,115.03 3126.09     
 HANG SENG (Aug 16) 25,734.22 25495.46     
 TAIWAN WEIGHTED (Aug 16) 10,420.89 10327.13     
 KOSPI (Aug 16) 1,927.17 1938.37     
 SET COMPOSITE (Aug 16) 1,631.40 1604.03     
 JAKARTA COMPOSITE (Aug 16) 6,286.66 6257.59     
 SHANGHAI COMPOSITE (Aug 16) 2,823.82 2815.80

 

Pakistan

Politics

  • The Supreme Court on 23rd August wrapped up a set of petitions on a video leak scandalinvolving former accountability court judge Arshad Malik.

“We find that it may not be an appropriate stage for this court to interfere in the matter of the relevant video and its effects” since the video may have relevance to a criminal appeal presently sub judice before the Islamabad High Court (IHC), the judges said in the detailed verdict.  The verdict, authored by Chief Justice Asif Saeed Khosa, noted that five main issues needed to be attended by the top court; among them was the possible impact of the video — if proven to be authentic — on the ruling by judge Malik in the Al-Azizia Steel Mills corruption reference that had put away former premier Nawaz Sharif last year. Separately, the Lahore High Court (LHC) formed a committee to proceed with an inquiry against judge Malik. The top judge, in the Supreme Court judgment, had heavily reprimanded judge Malik for his conduct. “His admitted conduct emerging from that press release and the affidavit stinks and the stench of such stinking conduct has the tendency to bring bad name to the entire judiciary as an institution,” the judgment read. “His sordid and disgusting conduct has made the thousands of honest, upright, fair and proper judges in the country hang their heads in shame,” the CJP said.

  • Amid rising tension over occupied Kashmir, Prime Minister Imran Khan has said there is “no point” talking to Indian officials, adding that his overtures for peace and dialogue with New Delhi so far have proven futile.

In an interview with The New York Times journalists Salman Masood and Maria Abi-Habib, published on Wednesday, Prime Minister Imran said: “There is no point in talking to them. I mean, I have done all the talking. Unfortunately, now when I look back, all the overtures that I was making for peace and dialogue, I think they took it for appeasement.” During the interview at the Prime Minister’s Office in Islamabad, which NYT said was Imran’s first with an international news organization aimed at publicizing anger over the situation in occupied Kashmir, the premier said: “There is nothing more that we can do.” The prime minister’s remarks come after India stripped Kashmiris of their seven-decade-long special autonomy through a rushed presidential order on August 5. A communications blackout and heavy restrictions on movement imposed by the Indian authorities from the eve of the intervention entered their 18th day on Thursday. At least 4,000 people have been detained in Indian-occupied Kashmir since then.

·  Pakistan calls on UNICEF to drop actress Priyanka Chopra as an ambassador

Pakistan has demanded that Indian actress Priyanka Chopra be stripped of her UNICEF Goodwill Ambassador role, saying that her “support for war” and the Indian government amid heightened tensions in the disputed region of Kashmir make a “mockery” of the position. In a letter addressed to UNICEF Executive Director Henrietta Fore and posted online Wednesday, Pakistan’s Human Rights Minister Shireen Mazari asked for the 37-year-old former Miss World to be “immediately denotified” from her role. Chopra was accused of “jingoism” and showing “support for war” by publicly endorsing the Indian government’s position on Kashmir, a disputed region that is claimed in full by both India and Pakistan. Earlier this month, Indian Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) announced it would strip autonomy from the state of Jammu and Kashmir — its part of the Himalayan region. India imposed curfews and an blackout. The move provoked a fierce reaction from Pakistan and demonstrations in support of Kashmir around the world.

  • Prime Minister Imran Khan has ordered all deputy commissioners and heads of development authorities to identify benami properties within their jurisdictions in a month, a notice issued by the Prime Minister’s Office on 23rd August said.

“The prime minister in a meeting held on August 20 on benami properties stressed upon the implementation of the Benami Act, 2019 in order to harvest its true potential in the national and global contexts,” read the notice, which was issued to all provincial chief secretaries. “The deputy commissioners, being collectors and custodians of the land record have a key role in collection of property records,” added the notice.

Economy

  • The total foreign investment plunged by 22 per cent in the first month of this fiscal year, reported the latest data from the State Bank of Pakistan (SBP) on 21st august.

The total investment fell to $107.2 million during July, lower by 21.64pc over $136.8m recorded in same month of the previous year. This could possibly be a worrying sign for the government which has been met with a severe shortage of dollars since coming into power, thanks to the massive current account deficit. This was led by net foreign direct investment (FDI) of $73.4m during the period under review, plummeting by 57.79pc, from $173.9m. On the other hand, portfolio investment was down 19.66pc to $33.9m, as against a net outflow of $42.2m in July last year.

  • The stock market took a surprise turnaround last week with almost a decade high weekly returns. Besides many other positives, the investors were also enthused by the visit of the newly appointed regulator who held deliberations with participants on market malaise.

The major issue that surfaced was the dry up of liquidity. Meetings held between the Securities and Exchange Commission of Pakistan (SECP) chairman Aamir Khan and National Clearing Company of Pakistan Ltd (NCCPL) considered ways and means to facilitate flow of funds in the market.

F.C Exchange Rates of PKR as of 23rd August 2019 as compared to 16th August 2019
Countries PKR rate as of 16th August 2019 PKR rate as of 23rd August July 2019
U.S.A. 159.40 157.90
U.K. 193.00 192.50
Euro 176.50 174.50
Japan 1.48 1.48
Saudi Arabia 42.25 41.75
U.A.E. 43.25 42.75

 

Pakistan Stock Exchange Indices

As of 23rd August 2019 As Compared

To 16th August 2019

 

Position as of 23rd August 2019
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 123

(Curr)

Current 31350.01 Current 14726.97
Decline 177

(High)

High 32100.56 High 14996.98
Unchanged 15 (Low) Low 31225.06 Low 14667.62
Total Change 315  -534.44  -191.06

 

 

Position as of 16th August 2019
Symbols KSE100 Index PSX-KMI All Shares Index
Advance 73 (Curr) Current 28764.63 Current 13453.11
Decline 194 (High) High 29429.07 High 13764.61
Unchanged 16 (Low) Low 28691.79 Low 13409.42
Total Change 283  -664.44  -311.50

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