Pakistan Stock Exchange index up 2.58%WoW

Pakistan Stock Exchange maintained its bullish momentum during the week ended on April 26, 2024. Despite some profit-takings, challenged its previous highs and closed the week at its highest ever level of 72,742 points, marking a weekly gain of 1,833 points or 2.58%.

Overall, the positive momentum was largely driven by anticipation of investments from Saudi Arabia, the successful visit of Iran’s President, and inclusion of Pakistan in the IMF’s executive board agenda.

On the macroeconomic front, trends remained encouraging. Firstly, current account balance for March 2024 clocked in at a surplus of US$619 million, taking 9MFY24 total CAD to US$508 million, down by 87%YoY.

Foreign direct investment in March witnessed an increase of 89%MoM, reaching US$258 million.

Inflation is expected to ease; with April 2024 CPI estimated at 16.9%YoY compared to increase of 36.4%YoY during the same period last year. This easing inflationary pressure signaled monetary easing to investors, which resulted decline in secondary market yields, with the yield on 12-month paper decreasing to 20.21%. The weekly inflation index, SPI has been on a downward trajectory for the past two weeks, indicating a favorable outlook for inflation for next month as well.

Consequently, the possibility of monetary easing beginning in the upcoming monetary policy meeting scheduled for Monday cannot be ruled out.

On the flip side, concerns regarding smuggling have begun to emerge, particularly in the petroleum sector, which is beginning to impact the refinery sector.

With the market enjoying positivity, participation also improved WoW with average daily traded volume increasing to 650 million shares as compared to 492 million shares in the earlier week, up 32%WoW.

Foreign exchange reserves held by State Bank of Pakistan declined by US$74 million to US$7.98 billion as at April 19, 2024. PKR depreciated by 0.03%WoW to close at 278.4/US$.

Other major news flows during the week included: 1) Pakistan's IT exports were up 37% to record US$306 million in March, 2) RDA inflows rose to US$7.66 billion, and 3) GDP expected to grow 2.6% during FY24.

Top performing sector were: Fertilizers, Synthetic & Rayon, and ETFs, while Tobacco, Miscellaneous, and Refinery were amongst the worst performers.

Flow wise, major net selling was recorded by Insurance companies with a net sell of US$13.1 million. Mutual Funds absorbed most of the selling with a net buy of US$6.0 million.

Top performing scrips of the week were: FATIMA, DGKC, AVN, EFERT, and FFBL, while laggards included: FHAM, PAKT, PSEL, BIPL, and NRL.

Looking ahead, the upcoming monetary policy meeting scheduled for April 29, would remain in the limelight, with start of monetary easing poised to further support the ongoing bullish trend of the market, that would be led by debt-heavy sectors.

Additionally, the disbursement of the third tranche of the IMF’s SBA and initiation of talks with IMF for next EFF will be closely monitored.

Given the market at its highest, analysts advise investors to focus on fundamentally strong companies.

   

 

Netanyahu faces imminent arrest

Reportedly, the Israeli National Security Council held secret discussions on the possibility of issuing international arrest warrants for Prime Minister Benjamin Netanyahu, Defense Minister Yoav Gallant and Army Chief of Staff Herzi Halevi.

Israel’s Channel 13 reported that the discussions took place in anticipation of the possibility of international arrest warrants being issued in the coming days against senior officials in Israel.

“According to the information and indications available to senior officials in Israel, there is a possibility that the International Criminal Court in The Hague will issue arrest warrants for Netanyahu, Gallant and Halevi,” the channel added.

It said that as part of the discussions, several immediate measures were approved for Israel to take in response to this potential move, including launching a political campaign at the international level against it.

The channel revealed that Netanyahu would hold talks later Wednesday with his counterparts from the Netherlands, the Czech Republic and Austria as part of efforts to hinder the potential step.

Meanwhile, Israeli Minister of Strategic Affairs Ron Dermer and Israel’s ambassador to the US, Michael Herzog, would contact the US Congress and President Joe Biden’s administration.

The channel cited unnamed senior Israeli officials as saying that if this step were taken, it brings to mind the measures taken against Russia and its president, Vladimir Putin, in light of the war it has been waging against Ukraine since February 2022.

The officials added that the International Criminal Court is expected to focus on policy makers rather than low-ranking soldiers in the arrest warrants.

In this context, Israel’s political-security Cabinet was scheduled to hold a meeting Thursday which was expected to address the issue of potential arrest warrants, according to the private broadcaster.

Last Friday, Israel’s private Channel 12 reported that the International Criminal Court is considering issuing international arrest warrants in the near future against Netanyahu and other senior officials for committing war crimes against Palestinians in the Gaza Strip.

At the time, the channel said that Netanyahu urgently met with Strategic Affairs Minister Dermer, Justice Minister Yariv Levin and Foreign Affairs Minister Israel Katz to discuss the matter and appeal to Western allies for assistance.

More than 34,200 Palestinians have been killed and 77,200 others injured amid a tight siege imposed by Israel, which left the entire population, especially residents of northern Gaza, on the verge of starvation.

More than six months into the Israeli war, vast swathes of Gaza lay in ruins, pushing 85% of the enclave’s population into internal displacement amid a crippling blockade of food, clean water and medicine, according to the UN.

First step to make Gaza a US military base

A maritime corridor is expected to commence operations early May. Construction began in the Mediterranean Sea Thursday off the coast of Gaza to assemble the pier.

Once assembled, the pier will facilitate 90 trucks loaded with humanitarian aid a day into Gaza, with up to 150 when fully operational.

A senior US military official said around 1,000 US Army and Navy soldiers and sailors will work on the mission and live out of a British ship called the Cardigan Bay.

The mission will not involve US boots on the ground, and the military is coordinating closely with Israel to ensure safety and security.

"We believe we have developed a comprehensive integrated security plan with the Israeli Defense Forces to address force protection of American troops," the official said.

Another US administration official said the pier comes amid a deepening humanitarian crisis.

"This is a humanitarian initiative with a humanitarian purpose," the official said.

Aid will be coming in off pallets from the island of Cyprus through the transport of commercial ships, and arrive at a large floating dock miles from Gaza.

Small Army boats will transport trucks with cargo to a pier anchored to Gaza's shore and drive into the strip and a secure area.

The United Nations has warned of a coming famine in northern Gaza unless the humanitarian crisis is addressed.

President Biden first announced the pier in March and initial estimates were slated to be completed by the end of April or early May.

 

United States crucifying right to protest and freedom of expression

The United States sermons other countries about the right to protest and freedom of speech but it is suppressing dissenting voices on college campuses throughout the country.

The police are cracking down on students in universities who are protesting Washington’s financial, political, and arms support for Israel, which has been committing unthinkable crimes in the Gaza Strip since October last year.

Stifling peaceful protests and freedom of speech in American universities has put into serious question the values that the US has been claiming it stands for.

President Joe Biden, like many other Congress members and pro-Israel bigots, has accused the students protesting Israel’s crimes of anti-Semitism.

When asked on Monday what is his message to the protesters at college campuses, Biden said, “I condemn the anti-Semitic protests.”

The statement by the president is absurd and a sheer lie. The students, some of them Jews, are clearly noticing that Israel is committing genocide in the Gaza Strip. In fact, organizations such as Jewish Voice for Peace have played a leading role in the protests.

Possibly, Biden and hawks in Congress are using the anti-Semitic slander to justify financial, military, political, and diplomatic support for the bloodthirsty regime of Benyamin Netanyahu.

Those people around the world who had been cherishing the United States for its self-proclaimed defense of democracy, freedom of opinion, and right to peaceful protests now feel disappointed and realize that they were badly mistaken.

Crackdown on students on campuses brings to mind the Kent State massacre of May 4, 1970, in which four Ohio college students were killed by the Ohio National Guard during a protest against the Vietnam War.

House representative Marjorie Taylor Green and senators Tom Cotton and Josh Hawley, and other leading Senate Republicans, including Lindsey Graham and Charles Grassley, are demanding that Biden go even further. The senators signed a letter on Tuesday calling on the administration to carry out criminal prosecutions and deportations for participants in the demonstrations.

The content of their letter is shameful as it declares that there is an outbreak of anti-Semitic, pro-terrorist mobs on college campuses, led by pro-Hamas rioters. 

On Sunday, Columbia Law School faculty condemned mass arrests and suspensions of students, saying such moves cast serious doubt on the university’s respect for the rule-of-law values that we teach.

“While we as a faculty disagree about the relevant political issues and express no opinion on the merits of the protest, we are writing to urge respect for basic rule-of-law values that ought to govern our University,” 54 law professors wrote, The Intercept reported.

A country that claims it is the leader of the free world but its police are storming the universities to arrest peaceful students is a serious cause of concern. Surely, it would embolden despots and dogmatic parliament members, like Tom Cotton and Taylor Green, in certain other countries.

The Biden administration is providing highly sophisticated lethal arms to Israel and vetoes UN Security Council resolutions against the regime. Congress is also ratifying billions of dollars in military aid for Israel, yet they expect nobody to protest either Israel’s horrible crimes or their complicity in these acts.

According to the Washington Post, one of the demands of the students is for universities to separate themselves from any companies that are empowering Israel's military efforts in Gaza. 

Washington’s support for Israel’s war on Gaza has gone to the extreme. Decision makers in the US are refusing to look into the mirror to find out that their support for Israel has been causing anger and disappointment in the US and around the world.

It is for such illogical and immoral support for hawks in Israel that prominent literary group PEN America has canceled its annual award ceremony after dozens of nominated writers withdrew in protest of the Israeli war in Gaza. The group, which is dedicated to free expression, announced that it was canceling the April 29 event.

A series of open letters signed by PEN nominees in recent weeks have criticized the group for choosing sides against Gaza in the war.

In a letter signed last month, several famous writers including Michelle Alexander, Naomi Klein and Zaina Arafat said the group was acting as a "cultural front for American exceptionalism" and was complicit in "normalizing genocide".

The U. has sent freedom of expression and the right to peaceful protests to the slaughterhouse through its unlawful and immoral support for butchers in Israel.

It is not just the administration, Congress or pro-Israel lobbyists who are coming hard on universities, movements and organizations that are calling for an end to the carnage in Gaza.

Most media outlets in Israel have also resorted to censorship in the Gaza war. For example, according to the Intercept, the New York Times has instructed journalists covering Israel’s war on Gaza to restrict the use of the terms “genocide” and “ethnic cleansing” and to “avoid” using the phrase “occupied territory” when describing Palestinian land.

 

 

Excerpts from the speech of Abu Obeida

Abu Obeida, the military spokesman for the Al-Qassam Brigades, the armed wing of the Palestinian Resistance movement Hamas, gave a speech on the 200th day of war, to illustrate the achievements of the Resistance and the failures of the criminal Israeli army.

We call on the masses of our nation to escalate their movement in support of the resistance. The criminal enemy is trying to restore its image 200 days after the Battle of Al-Aqsa Flood

 “The criminal enemy continues to try to salvage its image, only to further receive shame and disgrace.

200 days have passed and the Zionist army is still trapped in the quagmire of Gaza, exploiting its predicament on the ground for more killing and destruction.

 The occupation army failed against our resistance and our people after its image was shattered in front of the world.

We say to Netanyahu, Your death, the end of your occupation, and your downfall are inevitable, and your lamentations before the world will not change your image.

We in Al-Qassam Brigades have documented only a fraction of our heroes’ strikes against the enemy.

Our strikes and resistance will continue as long as the aggression of the occupation or its presence persists on any inch of our land.

The world witnessed the might of our fighters and their painful strikes not only in repelling enemy attacks but also during its withdrawal.

Among the lies of the enemy government is attempting to deceive the world into believing that it has eliminated the Al-Qassam Brigades and only the Rafah Brigade remains.

The occupation forces are trying to deceive the world into believing that they have eliminated all factions of the resistance, and this is a big lie.

In 200 days, the enemy could only achieve mass killings, destruction, and murder.

The defeat suffered by the occupation army in 60 minutes couldn’t defeat us in 200 days. They search for an imaginary victory everywhere, but wherever they look for it, they find us there shedding their soldiers’ blood.

Our strikes against the enemy will continue, adopting renewed tactics as long as they remain present on every inch of our land.

The occupation’s claims of linking victory to entering Rafah and destroying what remains of the brigades there are merely attempts to feel a false sense of triumph.

The army that focuses on killing children and women, destroying graves, seeking revenge against the martyrs’ bodies, targeting innocent civilians, bombing aid trucks, and assassinating members of international and local humanitarian aid organizations is the mark of an army feeling significant defeat and disappointment, not one confident in its alleged achievements.

We will not relinquish the fundamental rights of our people, foremost among them withdrawal, lifting the siege, and the return of the displaced to their homes.

The occupation is trying to evade all its promises in negotiations and wants to gain more time.

The scenario of Ron Arad may perhaps be the most likely scenario to be repeated with the enemy’s prisoners in Gaza. The ball is in the court of those concerned, namely the occupation’s public, but time is short, and opportunities are few to release the prisoners.

The so-called military pressure will only push us to stand firm on our positions and preserve the rights of our people without compromise.

To the families of the Israeli prisoners, We are more truthful than your government.

The blood toll paid by our people will only be met with the snatching of our natural rights and the rights of our resistance.

One of the goals of Al-Aqsa Flood is to unify our peoples and arenas after attempts by the occupation to isolate the Palestinian cause.

We appreciate every military and popular effort that joins Al-Aqsa Flood, and we salute the fronts of fighting in Lebanon, Yemen, and Iraq.

The hysterical reaction of the Zionists towards resistance actions from various fronts indicates the importance of resistance action.

The foremost front of resistance is the West Bank front, and we salute every inch of our steadfast free bank.

Jordan is from us and we are from it; it is one of the most important Arab arenas in terms of popular and public engagement and it occupies the enemy’s mind significantly.

Iran’s response in its size and nature, setting new rules and disrupting the calculations of the occupation, and we call on the masses of our nation to escalate their supportive movement for the resistance.

Abu Obeida concluded the speech by calling on the masses of our nation to escalate their supportive movement for the resistance.

Courtesy: Information Clearing House

Resilience of Russian Economy, beyond doubt

Bloomberg reports that Russian government has touted robust domestic demand in boosting its 2024 growth forecast on Tuesday. While some might be tempted to dismiss the move as geopolitical bravado in the face of the US stepping up Ukraine aid, Russian economic strength is real.

In fact, Moscow’s new 2.8% GDP projection weighs in under the IMF’s latest ‑ also upgraded forecast, of 3.2%, released last week.

It might be tempting to put this resilience down to a massive defense build-up. But the Washington-based IMF had much the same assessment as President Vladimir Putin’s team: a strong job market and swift wage rises are helping to power consumer spending. The fund even cautioned “there are some signs of overheating,” with unemployment at a record low.

What about all the Western sanctions, the mass emigration of Russian talent and the departure of a number of global corporate giants? Alexander Isakov at Bloomberg Economics offers some insight.

The sanctions on Russian energy aren’t as tight as they were for, say, Venezuela and Iran, thanks in large part to the West not wanting to worsen its own cost-of-living shock with a further surge in oil prices.

Some financial sanctions had already been imposed in 2014 after the Crimea invasion, and Russia had already amortized that cost.

Russian households remain confident thanks to a tight labor market, with the jobless rate at 2.8%. A largely voluntary military recruitment model, using monetary incentives, has let consumers keep calm and carry on.

Since some large multinationals have stayed in place, will Russia’s economy just keep on ticking?

Isakov notes that part of job market’s tightness is indeed a side effect of fiscal outlays tied to the war, funded in part by energy exports. Moscow needs crude prices to stay around the current US$90 a barrel levels to keep the budget balanced — a slump to, say, US$60 could make things difficult.

The IMF sees growth slowing to 1.8% next year, and cautioned that Russia’s potential growth rate has dropped to around 1.25% from 1.7% before the war.

This would mean that Russia’s income per capita may no longer converge toward Western European levels in the medium to long term, but for now, Russia’s chugging right along

 

US warns Pakistan of potential risk of sanctions

The United States warned on Wednesday countries doing business with Iran faced the “potential risk of sanctions,” as President Ebrahim Raisi concluded a three-day visit to Pakistan where his government signed eight memoranda of understanding (MoUs) for cooperation in different fields and to boost trade to US$10 billion.

The Iranian president arrived in Islamabad on Monday as the two Muslim neighbors sought to mend ties after unprecedented tit-for-tat military strikes earlier this year. The visit also took place as tensions continued to remain high in the Middle East after Iran launched airstrikes on Israel a week ago and Israel retaliated with its own attack on Friday.

During his stay in Pakistan, Raisi held several official meetings in Islamabad, Lahore and Karachi to discuss issues related to trade, connectivity, energy and people-to-people contacts.

Asked about his engagements in Pakistan and signing of MoUs, US State Department Deputy Spokesperson Vedant Patel cautioned against possible sanctions in a brief response.

“Just let me say broadly, we advise anyone considering business deals with Iran to be aware of the potential risk of sanctions,” he said. “But ultimately, the Government of Pakistan can speak to their own foreign policy pursuits.”

He was also asked about the US administration’s decision to announce sanctions against three Chinese and one Belarus-based entity supplying missile components to Pakistan last week.

“The sanctions were made because these were entities that were proliferators of weapons of mass destruction and the means of their delivery,” Patel said. “These were entities based in the PRC (Peoples Republic of China), in Belarus, and that we have witnessed to have supplied equipment and other applicable items to Pakistan’s ballistic missile program.”

“We’re going to continue to disrupt and take actions against proliferation networks and concerning weapons of mass destruction procurement activities wherever they may occur,” he added.

 

US Senate passes Ukraine and Israel funding

The Senate on Tuesday passed a US$95 billion emergency foreign aid package, ending months of bitter fighting over US$61 billion for the war in Ukraine that had deeply divided the Republican Party. The measure passed by a vote of 79 to 18 and now goes to President Joe Biden for his signature.

The package also includes US$15 billion in military aid for Israel and US$9 billion in humanitarian aid for Gaza and other war-torn areas, which became another flashpoint among conservative Republicans who argued it didn’t have adequate safeguards to keep it from going to Hamas.

It provides US$8 billion in security assistance to deter Chinese aggression in the Indo-Pacific.

It includes language to force the Chinese owner of TikTok to divest from the popular app, which is used by more than 140 million Americans, or otherwise face a ban within the United States.

The centerpiece of the package is US$47.7 billion that would flow through the Defense Department to provide training, equipment, weapons, logistics support and supplies to help Ukraine’s military, as well as US$13.4 billion to replenish US equipment sent to Ukraine and US$20.5 billion for US Armed Forces support in Europe.

It also includes US$9.5 billion in economic aid to Ukraine structured as a forgivable loan, an idea that former President Trump gave life to when the Senate passed a previous version of the US$95 billion assistance package in February.

Senate Majority Leader Chuck Schumer and Senate Republican Leader Mitch McConnell, who worked for months to get Ukraine aid passed, hailed the vote as a landmark moment.

“Today the Senate sends a unified message to the entire world. America will always defend democracy in its hour of need. We tell our allies we will stand with you. We tell our adversaries don’t mess with us,” Schumer declared on the Senate floor.

McConnell took to the floor to hail the prosperity the United States has enjoyed because it’s a global leader but told colleagues that that leadership comes with responsibilities to allies who help maintain peace and order throughout much of the world.

And he chastised colleagues who dragged out the debate over helping Ukraine based on what he called the “sheer fiction” that supporting the war is not a vital national security interest.

Evaluating Iran’s calibrated response

This is not the first time that Iran and Israel have faced each other. One of the reasons for not expanding the level of tension between these two actors is the agreed level of action and reaction by both the countries.

After October 07, it seems that the Zionist regime is no longer a rational actor due to the shocking blow it received, along with the preference of Netanyahu's personal and party interests over other issues.

The number of killings and civilian casualties, the targeting of hospitals, and the shutting off of water, electricity, and food have made even the regime's traditional allies criticize its irrational behavior.

This irrational behavior emanated from the lack of accurate calculation of Iran's behavior in response to changing the red line drawn in the parties' actions. However, it is also possible that due to the understanding of Tehran's intention not to expand the war and engage in a conflict with economic problems and sanctions, there was hope for continued strategic patience from Iran.

Iran, whose security is based on deterrence, considered the attack on the embassy a serious violation of its existential interest.

In a situation where targeting Iran's nuclear infrastructure has been among the goals of Israel and America for years, the main factor that caused such a decision was Iran's significant deterrence. 

However, after this attack on the embassy, what could be the perception about Iran's deterrence? Iran's determination to respond was inevitable; the question of its ability and design was raised.

Iran wanted to give a clear response to Israel in a situation where the Zionist regime was under pressure in the field of public opinion due to numerous violations of human rights, its widening gap with the West and the United States regarding the handling of operations, and future of Gaza.

All these elements indicate that Iran did not seek to expand the conflict with Israel and other actors to open a new front and disrupt this situation.

Therefore, the puzzle of the response to the attack on the consulate had two apparently contradictory and paradoxical variables.

First, the answer must be given in such a way that the damaged deterrence is revived and causes a change in the enemy's perception of this type of strike.

Second, the conflict should not spread, neither in the geographical field nor in the increasing of actors involved.

According to Iran's previous experiences reviving its deterrence, solving this problem and paradox have been two conceivable tools and leverages: 1) Designing a type of military operation that demonstrates its capability (at the tactical and design level) but not at the level of forcing the target to respond and 2) Through political tools. The uncertainty in the minds of the regional and global states regarding their goals should be reduced. 

Now, if we examine the True Promise operation with this statement, these things are evident. According to previous experiences, Iran and the Axis of Resistance have a specific knowledge and understanding of the weak points of the Zionist regime.

One of the most obvious of these weaknesses is the lack of strategic depth and a clear vulnerability regarding the number of strikes and the number of fronts. Also, using the principle of surprise usually increases the success rate.

However, Iran, knowing these cases, presented a designed response in which it did not involve all the actors of the resistance axis who were active during the past months; at the same time, it responded with minimal quantity and quality (according to the Israeli regime's statistics, Hamas in Al-Aqsa Storm operation had used about 3,500 projectiles) and of course, the start of the attack was already known hours ago.

At the same time, during the days before the operation, Tehran had expressed to the regional and extra-regional countries its intention to carry out this "calibrated response."

This operation has shown Iran's maturity in design and implementation. In general, it should be kept in mind that the main audience of deterrence is not public opinion but decision-makers.

Security officials must know the type of target selection, weapons, and tactics used better than anyone else. Until now, it seems that Western officials and experts have received this calibrated response.

 

Pakistan and Iran sign agreements

Pakistan and Iran agreed to increase the volume of bilateral trade to US$10 billion in the next five years following the signing of as many as eight agreements and memorandum of understanding (MoUs) for cooperation in different areas.

Speaking after witnessing the signing of the agreements and MoUs between the two sides, Prime Minister Shehbaz Sharif said that a fruitful discussion was held between the two sides including security and investment during the meeting. He said that Iran was among those countries which recognized Pakistan after 1947.

The premier said that these relations would now be used for the prosperity, mutual benefit, and welfare of the people of both sides as this day provides an opportunity for development.

President Raisi and the prime minister expressed strong and unequivocal condemnation of the indiscriminate use of force by Israeli occupation authorities in Gaza for over seven months and reiterated the call for international efforts to an immediate and unconditional ceasefire, lifting of the siege and humanitarian relief to the people of Gaza.

The prime minister said that Indian atrocities are continuing in Kashmir as well, Iran has always raised its voice in favour of Kashmiris, and Kashmiris will definitely get their basic rights.

The President of Iran, Ibrahim Raisi, thanked the prime minister and the government of Pakistan for the warm welcome. He said that the UN and the UNSC and other international powers that talk about human rights have proved that they are inefficient and the UNSC could not deliver its task and responsibility with regard to Palestine. He said that today Muslims, people of Iran and Pakistan, and Muslims and non-Muslims are raising their voices all over the world against these human rights violations. He said that the struggle of Palestinians will be successful one day.

The Iranian president said that Pakistan and Iran relations are not only limited to the neighbourhood but are connected with civilization, culture, and religion, which cannot be separated.

The Iranian president said that there are great opportunities for the development of existing relations between Pakistan and Iran. In today’s meeting, it has been agreed to expand political, diplomatic, economic, and commercial relations to the maximum extent possible.

He said that Pakistan and Iran are fighting a war against terrorism, and cooperation between the two countries is necessary in this war, there is a need to work together against organized crime and narcotics etc. as these are threats to both countries and region. Pakistan and Iran are determined to strengthen their bilateral relations and added that the volume of trade and economic cooperation between Pakistan and Iran is very small.

He added,“We have decided to increase the volume of trade to $10 billion in the first phase.”

He said that the brave people of Iran have turned the illegal sanctions into opportunities that achieved development and prosperity for Iran, and Pakistan can benefit from Iran’s development and technological experiences. He said Pakistan and Iran have a common, long and joint border and emphasized for development and prosperity of the people living across the border by going beyond establishing border markets.

Earlier, the two sides signed agreements on judicial assistance in civil matters, veterinary and animal health and in security and MoUs on the establishment of a special economic zone, film exchanges, and cooperation between the Ministry of Information and Broadcasting and the Organization of Cinema and audio visual affairs of Iran, and cooperation between the Ministry of Overseas Pakistanis and Human Development, and Ministry of Cooperatives, labours and social welfare of Iran, as well as MoU between Pakistan Standards and Quality Control Authority and National Standards Organization of Iran, and MoU on legal cooperation.

Iranian President Seyyed Ebrahim Raisi has declared that Pakistan’s territory is respectable for his country, and both Tehran and Islamabad are committed to fight against terrorism and other manifestations of insecurity which endanger the two neighbours and the wider region.

Addressing a joint presser with Prime Minister Shehbaz Sharif after their delegation-level talks in Islamabad on Monday, President Raisi said the anti-terrorism cooperation between the two countries is inevitable.

President Raisi conveying best regards from the people and the Supreme Leader of Iran to the people of Pakistan said the great people of Pakistan had always been supporting the oppressed people of various areas of the world specially the people of Gaza and had always been defending Islam and raising their voice for the freedom of Quds Al-Sharif.

 

World Economic Forum Special Meeting

Saudi Crown Prince and Prime Minister Mohammed bin Salman will patronize the World Economic Forum (WEF) Special Meeting on Global Collaboration, Growth, and Energy for Development on April 28 and 29 in Riyadh.

More than 1000 global leaders, including heads of state and government, and thought leaders from across the public and private sectors, as well as from international organizations, academic institutions, and non-government organizations will participate in the two-day event convened by Saudi Arabia.

The Special Meeting, which will focus on three central themes of Global Collaboration, Growth, and Energy for Development, will address the most pressing present day global development challenges.

The sessions will witness productive dialogues to enhance global collaboration and stimulate collective international action to devise sustainable solutions in a world marked by growing social and economic disparities, as developed nations surpass pre-pandemic levels of activity, while emerging economies continue to play catch-up, the Saudi Press Agency reported.

Under Global Collaboration, dialogues will explore how to overcome today’s geopolitical upheavals and challenges, especially with the mounting humanitarian crises in the Middle East and Eastern Europe, while looking to foster inclusive dialogues between the Global South and North.

On the topic of Growth, the deliberations at Special Meeting will examine how the trends of transformation, innovation and economic policy-making are helping to create inclusive growth models through new investment frameworks, while looking to outline solutions to the deepening inequalities between developed and developing economies.

Under Energy for Development, leaders attending the meeting will focus on the need to achieve a net-zero future through an inclusive global energy transition.

The Special Meeting marks a continuation of the long-standing technical and policy-making collaboration between Saudi Arabia and the World Economic Forum, and builds on the impact of the Kingdom’s active participation and contributions at the Forum’s annual meetings held in Davos, Switzerland each year.

The agenda of the Special Meeting, which has been designed to revive the spirit of cooperation and collaboration, includes several panel discussions, workshops, and networking opportunities, and represents a unique convergence of global leaders and experts committed to forging a path towards a more resilient, sustainable, and equitable world.

The choice of Riyadh as the host for the WEF Special Meeting is tipped to be as a testament to Saudi Arabia’s global role in fostering international cooperation and collaboration. Since the launch of Saudi Vision 2030, Riyadh has emerged as a global capital and platform for thought leadership and action, innovation, and solutions that deliver worldwide impact, it was pointed out.

Iran to prosper despite external pressures

In mid-April, Iran launched a barrage of rockets and drones at Israel—an unprecedented direct attack that marks a major escalation of tensions between the two perennial geopolitical enemies. Yet even as the external threats to Iran’s economy have increased, the country’s energy sector has appeared to go from strength to strength, with news reports highlighting that Iranian oil exports have recently risen to a six-year high.

Iranian oil exports to rise

Iran’s oil production is estimated to average 3.1 million barrels per day this year, which would be the highest reading since 2018—the year then-US President Donald Trump withdrew from the nuclear deal and reimposed sanctions on Tehran. This will be in stark contrast to the Middle East’s other major oil exporters, which unlike Iran are mostly subject to OPEC curbs ‑ output from Iraq, Kuwait, Saudi Arabia and the UAE is seen falling this year. As a result, Iran’s economy is expected to grow more quickly than the Middle East and North Africa average in 2024.

Further sanctions to be ineffective

Though Western nations are reportedly readying further sanctions on Iran’s oil sector, they are likely to miss the mark, given Iran’s considerable experience and skill at averting sanctions, and the fact that almost all the country’s oil is already being sold to China, not the West. US President Joe Biden is unlikely to push hard to enforce sanctions given that lower oil supply could spur already-persistent inflationary pressures and dampen his chances of beating Trump in the November elections.

Iran’s economy to be subdued domestically

Deteriorating geopolitics may not overly harm the oil sector, but the same is not true of domestic demand. The national currency has depreciated by over a quarter so far this year in the parallel market as a result of political tensions, which will leave Iran with the unenviable record of having the region’s second-highest inflation rate this year after Lebanon. This will entrench already tough domestic economic conditions and hit consumer spending and investment in turn.

Conflict with Israel is the elephant in the room

The probability is that there will be no all-out war between Iran and Israel. If this were to occur—which is not off the table, given the hawkish military leadership in both countries and the high risk of political miscalculation—all bets would be off, and Iran’s economy would quickly wave goodbye to its current resilience.

 

United States godfathering Israel

Lately, the United States blocked a United Nations Security Council resolution that would have recognized a Palestinian state. Twelve members of the Security Council had voted in favor of the resolution, while two countries – the UK and Switzerland – abstained. The United States vetoed it.

The Palestinian Authority President, Mahmoud Abbas, sharply criticized the US veto, saying in a statement that it was unfair, immoral, and unjustified, and defies the will of the international community, which strongly supports the State of Palestine obtaining full membership in the United Nations.

Israel’s Foreign Minister Israel Katz praised the US for vetoing what he called a shameful proposal.

US State Department deputy spokesperson Vedant Patel had announced earlier that the US would vote against the Security Council resolution, saying that the US has been very clear, consistently, that premature actions in New York, even with the best intentions, will not achieve statehood for the Palestinian people, referring to the headquarters of the United Nations.

He also noted there was no unanimity as to whether the Palestinians met the criteria for membership as a state in the UN, saying the US believes future statehood should be dependent on negotiations between Israel and representatives of the Palestinians.

“The most expeditious path towards statehood for the Palestinian people is through direct negotiations between Israel and the Palestinian Authority with the support of the United States and other partners who share this goal,” Patel said.

Palestinian attempts for recognition as a full member state began in 2011. They are currently a non-member observer state, a status that was granted in November 2012.

At the time, UN Ambassador of the Palestinian Territories Riyad Mansour called the step a historic moment, adding that he hoped the Security Council will elevate itself to implanting the global consensus on the two-state solution by admitting the state of Palestine for full membership.

Israel’s UN Ambassador Gilad Erdan condemned Friday’s move as consideration of a Palestinian terror state.

“This won’t be a regular state. It will be a Palestine-Nazi state, an entity that achieved statehood despite being committed to terror and Israel’s annihilation,” Erdan added.

The Saudi Ministry of Foreign Affairs has expressed disappointment over the UN Security Council's failure to pass a draft resolution that would have granted full UN membership to the State of Palestine.

The ministry said this decision contributes to the ongoing challenges faced by the region, particularly by allowing the continuation of Israeli occupation forces' actions without repercussions.

The ministry emphasized that the obstruction of Palestine's full membership in the UN hinders peace efforts and allows violations of the international law to persist.

Saudi Arabia reiterated its call for the international community to take decisive actions to stop attacks on civilians in the Gaza Strip and to support the Palestinian right to self-determination and statehood. This state, according to Saudi Arabia, should be established within the 1967 borders with East Jerusalem as its capital, aligning with the parameters set forth by the Arab Peace Initiative and other relevant international resolutions.

 

Israel-Iran encounters and US military strategy

The US military's success in helping Israel stop a recent massive wave of Iranian missiles and drones might suggest Washington is well prepared militarily for whatever comes next as Iran and Israel move from shadow warfare to direct confrontation.

Current and former US officials say US forces are not positioned for a major, sustained Middle East conflict and the Pentagon may have to revisit assumptions about military needs in the region if the crisis deepens.

"I don't think we have all the forces that we would want to support Israel if there was a direct war between them and Iran," said Michael Mulroy, a former deputy assistant secretary of defense for the Middle East under the Trump administration.

Though Tehran has indicated it had no plans to retaliate for an apparent Israeli strike on Friday, the tit-for-tat attacks have raised fears of an unpredictable regional war that the United States has sought to prevent.

In the months since an attack by Hamas militants on Israel triggered a war in Gaza that has ignited unrest throughout the Middle East. The United States has rushed thousands of US service members to a region that had seen a steadily declining US presence over years.

Many of those new US troops are on warships and aircraft that move in and out of the region, and are only temporarily deployed. That US strategy to rely on surge forces could be tested now Iran and Israel have broken the taboo of open military strikes against each other.

"What it means for the US military is that I think we have to revisit this idea of what are the necessary, sustainable military capabilities that we have to maintain in the region," said Joseph Votel, a retired four star Army general who led US troops in the Middle East.

Votel and other former officials said the US military's success in downing Iran's drones and missiles last Saturday was presumably aided by detailed US intelligence that allowed the Pentagon to anticipate the timing and targets of Iran's attack.

"I think the bigger concern is our ability to be responsive over a sustained period of time," Votel said.

US officials say Iran does not appear to want an all-out war with Israel, and Tehran has played down Friday's strike. Still, experts warn the situation is unpredictable, particularly as long as the Israel-Hamas conflict rages.

US Army General Michael "Erik" Kurilla, the current head of Central Command, told lawmakers last month that he had requested more troops than the Pentagon had sent to his region, which President Joe Biden's administration has said is a lower priority than the challenge from China.

In written testimony to the House Armed Services Committee, Kurilla said a dangerous shortfall in US intelligence assets, targeting expertise and linguists contributes to gaps and seams in our ability to detect and disrupt plots, increasing freedom of movement for violent extremist organizations.

Although Kurilla's comments appeared more focused on Afghanistan, some intelligence shortfalls have already affected US strategy since the start of the war in Gaza.

For example, a lack of detail about Houthi weapons stockpiles before the Iran-backed group started attacking commercial shipping in the Red Sea has made it hard to determine the effect of months of strikes on the group's arsenal of missiles and drones, said officials.

Still, sending more US troops to the Middle East and bolstering intelligence assets longer-term could prove difficult, officials say.

"Troops are spread around Europe and those that aren't are going through overdue maintenance cycles," one US official said, speaking on condition of anonymity.

"And Asia is supposed to be the focus."

Another official said it was still unclear whether the US military was prepared to pull forces from Asia or Europe, despite the increase in tensions.

Prior to October, the last time the United States surged thousands of troops into the Middle East was under former President Donald Trump, during a series of escalatory actions that culminated in the US killing of Iran's top general and a retaliatory missile attack by Tehran on a US base in Iraq.

The first US official noted that the surge of troops in 2019 and 2020 was possible because, unlike today, Washington did not have to dedicate so many personnel and resources to Europe, a new reality following Russia's 2022 invasion of Ukraine.

Mulroy said the United States should strengthen its position in the Middle East without abandoning its China-first focus.

 

 

Western media: Bias against Palestinians

A series of studies have been published in recent weeks analyzing coverage of the war in Gaza, and the results reveal an overwhelming bias against Palestinians.

In the first six weeks of the war, the New York Times, Washington Post, and Los Angeles Times used the terms "slaughter" and "massacre" 60 times more frequently in reference to Israelis than Palestinians, despite Palestinian deaths outnumbering those of Israelis by an order of magnitude.

CNN, MSNBC, and Fox News mentioned Israeli deaths four times as often as Palestinians during roughly the same time frame.

And on the four major Sunday morning TV talk shows, Israeli guests outnumbered Palestinians 10 to 1.

In the words of Mehdi Hasan — the former MSNBC journalist whose show was canceled after he committed the unpardonable sin of asking tough questions of a senior Israeli government official — "What else do you call that other than the deliberate dehumanization of the Palestinian people?"

Need to check Israeli attempts

The Iran-Israel shadow war has very much come out into the open. Tel Aviv had been targeting Tehran’s assets for over a decade, particularly in Syria, taking advantage of the chaos engendered by that country’s civil war. A number of Iranian scientists, especially those associated with the Islamic Republic’s nuclear program, had been assassinated within Iran in hits widely considered to have been orchestrated by Israel.

While the Iranians are known for their strategic patience, and for playing the long game, the April 01 Israeli strike on an Iranian diplomatic facility in Damascus, in which a number of senior Iranian generals were killed, had crossed a red line. There was tremendous pressure on Iran from within to reply to this Israeli transgression, and the ayatollah and his generals had to respond without triggering a major regional war.

Tehran’s response came in the shape of the April 13 assault on Israel, a barrage that was short on destructiveness, yet scored a major strategic and PR victory for Iran. The suspected Israeli strikes targeting Iranian facilities in Isfahan early on Friday are the latest move on this dangerous chessboard.

While Tel Aviv has officially kept mum about the Isfahan misadventure — Israel rarely owns up to subterfuge outside of its borders — some politicians in the Zionist state have celebrated the attacks, while American media, quoting sources, have said this is Israel’s handiwork. The Iranians themselves appear to be downplaying the event, and an airbase and nuclear facilities in the area seem to be safe.

Once again, the clamour for de-escalation has been echoing from global capitals. Surely a wider war is in no one’s interest — except perhaps for the extremists in Israel — but true de-escalation means Israel must start behaving like a normal state, not a rogue nation that threatens the entire region, as well as the forsaken Palestinians captive in the occupied territories.

The UN secretary general has said “one miscalculation … one mistake, could lead to the unthinkable”. But this is perhaps just what Benjamin Netanyahu and the cabal of zealots in the unruly coalition that backs him may want. After all, Israel has been facing global opprobrium for its butchery in Gaza, while Netanyahu is facing significant domestic opposition for his handling of the debacle.

Thus, a war with Iran may be a useful distraction to shift the focus from Palestine, and rally Israel’s Western friends behind it to protect the Middle East’s ‘only democracy’ against Tehran.

Suffice to say, any scenario pitting the Israeli-Western collective against Iran and its ‘axis of resistance’ allies will result in an explosion in the Middle East, causing oil prices to skyrocket, and global trade to be upended. To avoid this, Washington, London and Brussels need to check Israel’s destabilizing behaviour.

Courtesy: Dawn

Warmongers approve US$95 billion package

The US House of Representatives on Saturday with broad bipartisan support passed a US$95 billion legislative package providing security assistance to Ukraine, Israel and Taiwan, over bitter objections from Republican hardliners, reports Reuters.

Passage of the long-awaited legislation was closely watched by US defense contractors, who are in line for huge contracts to supply equipment for Ukraine and other US partners.

The legislation now proceeds to the Democratic majority Senate, which passed a similar measure more than two months ago. US leaders from Democratic President Joe Biden to top Senate Republican Mitch McConnell had been urging embattled Republican House Speaker Mike Johnson to bring it up for a vote.

The Senate is set to begin considering the House-passed bill on Tuesday, with some preliminary votes that afternoon. Final passage was expected sometime next week, which would clear the way for Biden to sign it into law.

The bills provide U$60.84 billion to address the conflict in Ukraine, including US$23 billion to replenish US weapons, stocks and facilities; US$26 billion for Israel, including US$9.1 billion for humanitarian needs, and US$8.12 billion for the Indo-Pacific, including Taiwan

Ukrainian President Volodymyr Zelenskiy expressed his thanks, saying US lawmakers moved to keep "history on the right track."

"The vital US aid bill passed today by the House will keep the war from expanding, save thousands and thousands of lives, and help both of our nations to become stronger," Zelenskiy said on X.

The Biden administration is already finalizing its next assistance package for Ukraine so it can announce the new tranche of aid soon after the bill becomes law in order to meet Ukraine’s urgent battlefield needs, a White House official said.

Biden, who had urged Congress since last year to approve the additional aid to Ukraine, said in a statement, "It comes at a moment of grave urgency, with Israel facing unprecedented attacks from Iran and Ukraine under continued bombardment from Russia."

The vote on passage of the Ukraine funding was 311-112. Significantly, 112 Republicans opposed the legislation, with only 101 in support.

"Mike Johnson is a lame duck ... he's done," far-right Republican Representative Marjorie Taylor Greene told reporters afterward.

Marjorie has been a leading opponent of helping Ukraine in its war against Russia and has taken steps that threaten to remove Johnson from office over this issue. Greene stopped short of doing so on Saturday.

During the vote, several lawmakers waved small Ukrainian flags as it became clear that element of the package was headed to passage. Johnson warned lawmakers that was a "violation of decorum."

The House's actions during a rare Saturday session put on display some cracks in what generally is solid support for Israel within Congress.

Recent months have seen progressive Democrats express anger with Israel's government and its conduct of the war in Gaza.

Saturday's vote, in which the Israel aid was passed 366-58, had 37 Democrats and 21 Republicans in opposition.

Johnson this week chose to ignore ouster threats by hardline members of his fractious 218-213 majority and push forward the measure that includes Ukraine funding as it struggles to fight off a two-year Russian invasion.

The unusual four-bill package also includes a measure that includes a threat to ban the Chinese-owned social media app TikTok and the potential transfer of seized Russian assets to Ukraine.

Some hardline Republicans voicing strong opposition to further Ukraine aid argued the United States can ill afford it given its rising $34 trillion national debt. They have repeatedly raised the threat of ousting Johnson, who became speaker in October after his predecessor, Kevin McCarthy, was ousted by party hardliners.

"It's not the perfect legislation, it's not the legislation that we would write if Republicans were in charge of both the House, the Senate, and the White House," Johnson told reporters on Friday. "This is the best possible product that we can get under these circumstances to take care of these really important obligations."

Representative Bob Good, chair of the hardline House Freedom Caucus, told reporters on Friday that the bills represent a "slide down into the abyss of greater fiscal crisis and America-last policies that reflect Biden and (Democratic Senate Majority Leader Chuck) Schumer and (House Democratic leader Hakeem) Jeffries, and don't reflect the American people."

But Republican presidential candidate Donald Trump, who carries huge influence in the party, on April 12 voiced support for Johnson and in a Thursday social media post said Ukraine's survival is important for the US.

United States targets Chinese steel, maritime and logistics sectors

President United States, Joe Biden has called for tripling the existing tariff rate on Chinese steel and aluminium, just as the US Trade Representative’s (USTR) office announced the launch of yet another Section 301 investigation into China’s maritime, logistics, and shipbuilding sectors.

Biden told the USTR to raise the tariff on steel and aluminium imports from China – already under Trump-era duties – from 7.5% to 22.5%, according to a statement by the White House.

He also sent senior envoys to pressure Mexico to prevent Chinese steel and aluminium from transferring through Mexico to evade tariffs.

Biden’s move was made public just ahead of his visit to the headquarters of the United Steelworkers Union in Pittsburgh as part of his re-election campaign in the swing state of Pennsylvania.

The new investigation under Section 301 of the Trade Act of 1974 was launched after reviewing a “serious and concerning” petition by five national labour unions accusing China of using “unfair, non-market policies and practices” to “dominate the maritime, logistics, and shipbuilding sectors”, the USTR office said.

“The allegations reflect what we have already seen across other sectors, where China utilizes a wide range of non-market policies and practices to undermine fair competition and dominate the market, both in China and globally,” US trade representative Katherine Tai was quoted as saying.

“I pledge to undertake a full and thorough investigation into the unions’ concerns.”

A Section 301 investigation examines whether a foreign government’s acts, policies, or practices are unreasonable or discriminatory, and whether they burden or restrict US commerce.

If the investigation determines foreign practices have unfairly affected US commerce, the USTR may take “appropriate and feasible action” to remedy the unfair practices, including imposing duties and other import restrictions such as fees.

The USTR was seeking public comments and would hold a public hearing in connection with the investigation, the statement said.

The USTR added that it had requested consultations with the Chinese government about the investigation.

The 137-page petition, along with hundreds of supporting documents, was presented to the USTR office on March 12.

The petition lists the Chinese government’s actions, including providing loans from state-owned banks, equity infusions and tax preferences as well as provisioning steel at below-market prices and issuing loans to support the construction of thousands of vessels in China for export.

It highlights some unfair practices by Beijing, including ordering Chinese companies to buy and use Chinese-built products, directing mergers, and blocking alliances with foreign companies.

The coalition of labour unions includes the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union; the International Association of Machinists and Aerospace Workers; the International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers; the International Brotherhood of Electrical Workers; and the Maritime Trades Department.

The petition was also endorsed by two US senators, Democrats Tammy Baldwin of Wisconsin and Bob Casey of Pennsylvania.

During his administration from 2017 to 2021, former US president Donald Trump launched various Section 301 investigations into Chinese imports and imposed punitive tariffs, which triggered retaliation by China and began a trade war that continues today.

 

Pakistan Stock Exchange closes at highest level

At Pakistan Stock Exchange trading session during the week ended on April 19, 2024 remained erratic. However, concluded on a stronger note on the Friday with the benchmark index posted highest-ever closing at 70,909 points posting 0.85%WoW gain.

Overall, average trading volume was reported at 492.37 million shares, up 43.51%WoW, clocking in at 2.46 billion shares, as compared to 1.72 billion shares traded in the earlier week.

The volatility may be attributed to the general uncertainty surrounding over international crude prices, primarily due to the ongoing rifts in the Middle East, with the tensions largely emanating due to the scuffle between Iran and Israel. The key highlight of the week was the successful visit of the Saudi delegation to Pakistan, promising major investments in various sectors. Additionally, KSA’s acquisition of a 25% minority stake in the Reqo Diq Mining project for US$1.0 billion appears to be progressing well, with the deal anticipated to finalize soon.

With regards to FIPI flows, net foreign investments remained consistent throughout the outgoing week, culminating to US$33.86 million by Friday close.

Finally, authorities repaid the maturing US$1.0 billion Eurobond on April 12th, resulting in the SBP’s FX reserves to end the week at US$8.0 billion.

With regards to fuel price, Motor Gasoline and Diesel prices were raised, attributed to rising crude oil prices.

Other major news flows during the week included; 1) PIB sale falls short, yields dip on shorter maturities, 2) Pakistan claimed to complete gas pipeline project with Iran, 3) Wheat production target of 32.2 million tons set for the current season is at high risk due to rainfall, 4) Government does not anticipate any significant currency devaluation.

Sugar & Allied industries, Refinery, Synthetic & Rayon, Vanaspati & Allied Industries, Textile Weaving were amongst the top performing sectors, while laggards included Miscellaneous, Woolen, and Paper & Board.

Major net selling was recorded by Individuals (US$14.43 million) & Banks (US$10.97 million). Brokers absorbed most of the local selling with a net buy of US$1.23 million.

Top performing scrips of the week were: PSX, FABL, FATIMA, AKBL, NRL, while top laggards included: PTC, ISL, KTML, SEARL, and MUGHAL.

Going forward, market is expected to return its focus to negotiations with the IMF regarding The EFF program, upcoming monetary policy announcement, and the corporate results which are expected to be announced throughout the coming two weeks.

Despite the market reaching its new highest, the forward P/E continues to remain below 5.0x, which instills positivity regarding the market's fundamentals.

Israel has just handed Iran a major victory

What was supposed to be an attack to restore deterrence, the Israeli attack on Iran managed to do the opposite; it further proved to the Islamic Republic that the United States, Israel, and their allies are alien to this concept, an op-ed published in The Telegraph on Friday concluded.

The piece titled, “Israel has just handed Iran a major victory,” considered that the early Friday attack on Isfahan and Tabriz, which according to latest reports included several small drones that were launched from within Iran and were shot down by the country’s air defenses, has emboldened Iran even more to carry out a larger strike against the occupation entity any time in the future.

The writer accused the entity’s international allies of muting its attack and trying to contain it by attaching limited to it in fear of escalation, pointing out that this would hardly strike fear in the heart of the Islamic Republic.

Additionally, by not publicly claiming responsibility, Israel stuck to deniability with an inbuilt exit from the spiral of escalation.

He expressed frustration over the scope and extent of the Israeli aggression, comparing it to Iran’s massive operation.

Was that really it? Was that really the only response to hundreds of missiles and drones fired at Israel last week, costing a reported US$1 billion in defenses and demanding an international response?

“If the price for such a major assault is one limited jab at an air base, then that is extremely favorable to Iran. The lesson for the Ayatollah is clear: next time, double the payload. It’s worth it.”

The United States, following years of appeasement to Iran, is happy to play defense, the author said, criticizing Washington’s role in the event.

He mocked the US’ temerity to dub the operation they led to repel Iran’s retaliatory attack as a win, stressing that when it comes to hitting back, it is cowardly.

According to the publication, Iran’s foreign policy approach is gradual and strategic. It advances its agenda slowly and cautiously, testing the limits of what it can achieve. This incremental approach allows Iran to make gains over time while avoiding a decisive confrontation that could jeopardize its objectives.

But in the case that adversaries try to sneak up on the Islamic Republic, it would intervene decisively to deter further advances.

In conclusion, the author said that the West, including the United States, has failed to effectively counter Iran’s action policy, and thus Tehran was able to advance its plans with relative impunity.

Israel-Iran playing 'ping pong' under US supervision

Israel has carried out a military strike inside Iran; a US official told CNN Friday, the latest move is a dangerous escalation that threatens to push the already volatile region into all-out war.

The US was given advance notification Thursday of an intended Israeli strike in the coming days, but did not endorse the response, the senior US official said.

Iran’s air defense systems were activated in several locations after three explosions were heard close to a major military airbase near the Iranian city of Isfahan, state media reported early Friday morning. Iran’s semi-official FARS news agency said fighter jets were located at the airbase and that military radar was a possible target.

Multiple state-aligned news agencies reported that sites associated with Iran’s nuclear program were “completely secure” and the attack appeared to be limited in scope.

“Following the activation of air defense in some parts of the country to deal with some possible targets, reports indicate that so far, no large-scale strikes or explosions caused by any air threat has been reported,” Iranian state-run media reported.

Reports of Friday’s strike came hours after Iran’s Foreign Minister Hossein Amir-Abdollahian told CNN that if Israel takes any further military action against Iran, its response would be “immediate and at a maximum level.”

“If the Israeli regime commits the grave error once again our response will be decisive, definitive and regretful for them,” he added, noting that this warning had been communicated to the White House via the Swiss Embassy in Tehran.

Tensions across the Middle East remain on a knife edge, following Iran’s unprecedented direct strike against Israel late Saturday. The attack, during which Iran launched more than 300 drones and cruise missiles toward Israel, came in response to a suspected Israeli strike on an Iranian diplomatic complex in the Syrian capital, Damascus, on 01 April, which killed a top commander, and several others.

Outgoing flights from several Iranian airports were briefly canceled or suspended early Friday but aviation authorities later lifted all restrictions.

Iran’s National Cyberspace center spokesperson Hossein Dalirian said on X that three drones “have been successfully shot down by the country’s air defense, there are no reports of a missile attack for now.”

Senior Iranian military commander Second Brigadier General Mihandoust said the sound of a loud explosion near Isfahan was caused by “air defense firing at a suspicious object” and that there was no “damage or incident,” according to the state-aligned Tasnim news agency.

Prior to Friday’s Israeli strike, the US expectation was the country would not target Iran’s civilian or nuclear facilities, another senior US official told CNN.

CNN has previously reported that Israel told the US its response would be limited in scope. US intelligence had suggested Israel was weighing a narrow and limited strike inside Iran because they feel like they have to respond with a kinetic action of some kind given the unprecedented scale of the Iranian attack.

The range of targets was “never specified in precise terms but nuclear and civilian locations were clearly not in that category,” the second official added.

Israel’s Western allies have both rallied to its defense in the wake of Iran’s attack Saturday, while also urging restraint.

Pakistan: Likely impact of Middle East conflict

Iran’s unprecedented drone/missile attacks on Israel on April 13 has raised the risk of a wider regional conflict in the Middle East. The attacks by Iran were largely intercepted by Israel. Still, any further retaliatory exchanges between the two countries could worsen the disruption of shipping routes through the region and thus lift global freights – in turn leading to higher commodity prices in the coming months. The escalation is likely to affect Pakistan in multiple ways.

From the Pakistan market’s standpoint any escalation will test two key expectations that have driven the YTD rally at Pakistan Stock Exchange, monetary easing and Pakistan’s negotiation with the IMF for another program.

On the flipside, the market will draw comfort from the prospect of fresh bilateral assistance and investments from Saudi Arabia and the release of final tranche of US$1.1 billion by end April.

Global shipping costs and commodity prices are likely to rise. Even in case of a de-escalation of the conflict, it threatens to worsen the disruption of shipping routes through the region, similar to that through the Red Sea. There is an increased risk of the following in the near term:

Surge in global oil prices toward US$100/bbl: The Red Sea disruption since November 2023, along with the extension of OPEC Plus supply cuts, has lifted Brent from US$78/bbl at the start of 2024 to nearly US$90/bbl, despite a weak global economic recovery.

Surge in the global shipping costs, through elevated insurance premiums on shipments through the region.

Global food prices could also rise, because of the rise in shipping costs and higher fertilizer prices, which the region exports. Food exports from South Asia, such as rice from India and Pakistan, to the rest of the world could be disrupted as well.

Potential delay in the start of interest rate cuts: An escalated conflict will have negative implications for Pakistan’s CA balance and inflation. In a scenario where global prices of crude oil, chemicals and food commodities rise by 10% in the coming months, Pakistan’s trade and CA deficit could expand up to US$300 million per month.

It is also likely that, in an escalated conflict, Pakistan’s exports and remittances may shrink, due to a disruption in shipping routes and economic concerns in the GCC, respectively.

Together these could spell a reversal in the exchange rate parity which has been stable around 280 since the start of year 2024. Note that, as per the SBP, Pakistan has a funding gap of around US$3 billion until June 2024, excluding the US$1 billion Eurobond repaid on April 12, 2024.