Traffic in Suez Canal normalized

Shipping traffic in the Suez Canal was proceeding normally on Monday after tugs towed a cargo vessel that broke down during its passage through the waterway, the Suez Canal Authority said.

The breakdown caused only minor delays, with convoys of ships resuming regular transit by 09:00 GMT, shipping agent Leth said.

The MV Glory, which was sailing to China, suffered a technical fault when it was 38km into its passage southward through the canal, before being towed by four tugs to a repair area, the Suez Canal Authority (SCA) said in a statement.

The Suez Canal is one of the world's busiest waterways and the shortest shipping route between Europe and Asia.

In 2021, a huge container ship, the Ever Given was stuck in high winds across a southern section of the canal, blocking traffic for six days before it could be dislodged.

The MV Glory is a Marshall Islands-flagged bulk carrier, data from trackers VesselFinder and MarineTraffic showed.

It departed Ukraine's Chornomorsk port on December 25, 2022 bound for China with 65,970 metric tons of corn, according to the Istanbul-based Joint Coordination Centre (JCC) overseeing Ukraine grain exports.

The JCC, which includes representatives from the United Nations, Turkey, Ukraine and Russia, said the ship had been cleared to carry on its journey from Istanbul after an inspection on January 03, 2022.

 

QatarEnergy-Chevron Phillips US$6 billion deal

According to Reuters, QatarEnergy announced on Sunday the final investment decision on the US$6 billion Ras Laffan Petrochemicals Complex with partner Chevron Pillips Chemical which is expected to be the largest of its kind in the Middle East.

The complex, expected to begin production in 2026, includes an ethane cracker with a capacity of 2.1 million tons of ethylene per year.

The integrated complex will also include two high density polyethylene derivative units with a total production capacity of 1.7 million tons per year, QatarEnergy, Chief Saad al-Kaabi Kaabi said.

Originally announced in 2019, the project highlights how Middle East oil producers are expanding further into petrochemicals, used in the production of plastics and packaging materials, to move into new markets and find new sources of income beyond exporting crude oil and natural gas.

State-run QatarEnergy will hold a 70% stake in the venture with Chevron Phillips Chemicals holding 30% under the agreement signed on Sunday.

“This marks QatarEnergy's largest investment ever in Qatar's petrochemical sector," Kaabi said.

The complex, located in Ras Laffan industrial city, is an important milestone in Qatar's downstream expansion strategy, he said.

Qatar, one of the world's top producers of liquefied natural gas (LNG), will see its ethylene production capacity double on the back of the new complex. Local polymer production will also increase from 2.6 million to 4 million tons per annum.

The Gulf state, one of the most influential global players in the world's LNG markets, is expanding its North Field gas field that will see its liquefaction capacity increase from 77 million tons per annum to 126 million tons by 2027.

Iran export from Sistan Baluchestan up 32%

The value of non-oil export from Sistan-Baluchestan province, in the southeast of Iran, rose 32% in the first nine months of the current Iranian calendar year (March-December, 2022), as compared to the same period last year, according to a provincial official.

Mojtaba Shojaei, the Director General of the province’s governorate’s office of economic affairs coordination, said 1.165 million tons of products worth US$165 million were exported from Sistan-Baluchestan in the mentioned nine-month period, indicating also 78% growth in terms of weight YoY.

He named cement, clinker, travertine stone, coal coke, coal, dates, gas, vegetables, agricultural poison and agricultural products as the main exported items, and Pakistan, Afghanistan, India, Iraq, Kuwait, the United Arab Emirates (UAE), Turkmenistan, Uzbekistan and Indonesia as the major export destinations.

The official further announced that 1,157 tons of commodities valued at US$1.184 million were imported to the province in the first nine months of the present year, with 17% rise in value, while 26% drop in weight, year on year.

He named wheat, rice, cattle corn, cattle oats, mango, banana, sesame, potato, live livestock, fabric, tea, car spare parts, light and heavy car tires, cooling devices, spices, and fish as the main imported items, and Russia, Pakistan, France, Germany, India, Brazil, United Arab Emirates, China, Thailand and Afghanistan as the major sources of imports during the first nine months of the current year.

Based on the data released by the Islamic Republic of Iran Customs Administration (IRICA), the value of Iran’s non-oil export rose 19 percent from the beginning of the current Iranian calendar year (March 21, 2022) up to December 31, as compared to the same period of time in the past year.

According to the IRICA data, Iran exported 97.843 million tons of goods valued at US$43.088 billion in the mentioned period, also registering 2% increase in weight

Liquefied natural gas, liquefied propane, methanol, liquefied butane, and film-grade polyethylene were the main exported products in the said time span.

Major export destinations of the Iranian non-oil goods were China, Iraq, Turkey, the United Arab Emirates, and India.

The Islamic Republic has also imported 28.18 million tons of non-oil commodities worth $44.337 billion in the first 286 days of the present year, with a 14.7% growth in value and a 10% increase in weight, year on year.

The major items of goods imported into the country in the said period include corn, rice, wheat, soybeans, sunflower seed oil, and cell phones, based on the IRICA data.

The United Arab Emirates was the top exporter to Iran in the mentioned period, followed by China, Turkey, India, and Germany.

Reportedly, the value of Iran’s non-oil trade rose 17% during the mentioned period, as compared to the same time period last year.

Iran traded more than 126 million tons of non-oil products worth over US$88 billion with other countries in the mentioned period.

 

Israel has already annexed West Bank

The UN General Assembly has referred the West Bank issue to the World Court. There are again rumblings about possible annexation, especially with Benjamin Netanyahu’s far-Right government assuming power in Jerusalem.

Annexation is viewed as something terrible Israel might do to the Palestinians. However the reality is that Israel has already incorporated the West Bank long ago.

It has not formally annexed this not-very-large area in order to avoid provoking the region and the world – and mainly to avoid having to extend the right to vote for the Israeli parliament to the region’s three million Palestinians.

This is a neat little trick that has worked well; it has fooled most people most of the time, including, amusingly, a few clueless Jewish nationalists who never got the memo and are now calling for annexation.

To understand that the West Bank is already part of Israel, consider the following:

By law, Israelis abroad cannot vote in elections unless they are diplomats or other envoys of the state; generally only citizens present in Israeli sovereign territory on Election Day can vote. Are the half a million West Bank settlers allowed to vote? You bet they are, and in impressive numbers they do. That is in contrast to Palestinians who may be living in a village just across the road.

Countries do not generally build towns and villages on territory that does not belong to them (and democratic countries certainly do not build anything for only one ethnic group only). Is Israel building Jewish settlements in the West Bank? It certainly has, and now it will again; there’s an accredited university there as well.

Israel controls all entry and exit to and from the overall West Bank, as well as passage between the Palestinian Authority autonomy islands. Israel controls the airspace and the water, natural resources and construction rights in most of the territory, and also provides the currency. Israel has the overriding security and justice authority, and even the autonomous islands are essentially subordinate.

Is there any other country with such a level of control on territory that isn’t part of it? Certainly not democratic countries; the US territories like Puerto Rico are an interesting case – and the locals there are US citizens. The situation is analogous mainly to the colonial era, which wound down in the middle of the previous century.

Defenders of the situation will say the occupation is necessary for security reasons, because otherwise the West Bank would fall to Hamas and terrorists would fire rockets from strategic highland at Israel’s major cities. That’s a very reasonable concern, given that this precise thing happened after Israel pulled out of Gaza in 2005 – but it does not justify the settlements.

Apologists will argue that the occupation is temporary, until the Palestinians agree to Israel’s conditions for partition. But they will not agree to Israel’s terms. The excuse of temporariness is preposterous after 55 years, with no end in sight and the new government preparing to further deepen the settlement enterprise; it plans to legitimize illegal outposts deep inside the territory.

Some argue that most settlers live quite close to the old pre-1967 border, and incorporating them only, would usefully expand Israel’s narrow waist, which at its narrowest point is less than 20 kilometers (about 10 miles) wide. But this does not apply to the 100,000 settlers who live deep inside these territories – well beyond the security barrier established in the 2000s (and which eats into about 15% of the West Bank); the purpose of those settlements, and most of what the new government plans, is to make any partition impossible.

Some right-wingers now want Israel to stand supposedly strong by formally annexing so-called Area C, which is the 60% or so of the West Bank that surrounds the autonomy areas – an unwieldy map created by the 1990s Oslo Accords.

It is doubted that people know the map. Such an annexation, which would leave islands of non-annexed Palestinian areas surrounded by Israeli territory, would not produce what a reasonable person would consider a partition. If anything, it would invite comparisons to South Africa’s apartheid-era Bantustans. It is only slightly less childish than suggesting Israel annex everything except the homes of Palestinians.

If the current government actually lasts four years and deepens the settlement project, the situation will gradually escalate. The Palestinian Authority is likely to collapse – or at least move on from 87-year old leader Mahmoud Abbas. There may well be a renewed Palestinian uprising. And before long, there will be a growing Palestinian demand for Israel to really annex the West Bank – all of it, giving the Palestinians the same voting rights enjoyed by the two million Arab citizens in Israel proper.

This is the likely outcome of an occupation that includes colonization of the kind that is taking place. This is the only formal annexation scheme that will actually mean anything, and it will be backed by the entire world, probably with economic sanctions.

The result will be a country of some 13 million that is barely over half Jewish – and you can expect further conflicts, including between secular and religious Jews, that will cause mass emigration among the sector currently responsible for Israel’s economic and high-tech miracle.

The result will be a new country called Palestine, not Israel. This understanding of demographic reality (and the leverage it bestows) is why the Palestinians have not made things easy for Israel by seriously engaging with previous peace and partition offers made by more intelligent governments.

An Israel that wants to survive in the long term should freeze all settlement activity beyond the security barrier line – and project to all audiences that its strategic imperative is a secure way to separate from most of the West Bank.

In the wake of last week’s UN decision, the World Court could do peace a major service by expediting procedures and nudging Israel in this direction.

Annexation is not something Israel should threaten – but something it should strenuously seek to avoid. Instead, under the new government, it is headed off a cliff in a way that can only leave its enemies incredulous with joy. It is a genuine failure of democracy – and a very flawed one at that, because millions of Palestinians are effectively residents who cannot vote.

Iran exports to United States increase 10-fold

According to the data released by the US Census Bureau, the value of Iran exports to the United States registered a 10-fold increase in the first 11 months of 2022 from the same period in 2021.

As reported by IRNA, the United States imported commodities worth US$11 million from Iran in the first 11 months of year 2022, while the figure was only US$1.1 million in the same period in year 2021.

According to the data, the two countries traded US$51.3 million worth of goods during January-November which was 38% more than the figure in the first 11 months of 2021 when the trade between the two sides amounted to US$37.2 million.

The United States Census Bureau’s data shows that the value of US export to Iran also increased 11% to US$40.3 million in the 11-month period of this year, from US$36.8 million in the same time span of the previous year.

As previously reported by the bureau, the value of Iran’s exports to the United States increased by 11 folds in the first 10 months of 2022 from the same period in 2021.

The US imported commodities worth US$10.9 million from Iran in the first 10 months of this year, while the figure was only US$1 million in the same period of time in the past year.

The two countries traded US$46.5 million worth of goods during January-October which was 41% more than the figure in the first 10-months of 2021 when the trade between the two sides amounted to US$33.8 million.

The United States Census Bureau’s data shows that the value of US export to Iran increased eight percent to US$35.6 million in the 10-month period of this year, from US$32.8 million in the same time span of the previous year.

 

McCarthy elected speaker of US House of Representatives

Republican Kevin McCarthy was elected speaker of the US House of Representatives early on Saturday, after making extensive concessions to a group of right-wing hardliners that raised questions about the party's ability to govern.

The 57-year-old Californian suffered one final humiliation when Representative Matt Gaetz withheld his vote on the 14th ballot as midnight approached, prompting a scuffle in which fellow Republican Mike Rogers had to be physically pulled away.

McCarthy's victory in the 15th ballot brought an end to the deepest congressional dysfunction in over 160 years. But it sharply illustrated the difficulties that he will face in leading a narrow and deeply polarized majority.

He won at last on a margin of 216-212. He was able to be elected with the votes of fewer than half the House members only because six in his own party withheld their votes - not backing McCarthy as leader, but also not voting for another contender.

“I'm glad that it's over," McCarthy told reporters shortly after the vote.

McCarthy agreed to a demand by hardliners that any lawmaker be able call for his removal at any time. That will sharply cut the power he will hold when trying to pass legislation on critical issues including funding the government, addressing the nation's looming debt ceiling and other crises that may arise.

"We got the things that are transformational," said Republican Representative Ralph Norman, who voted to back McCarthy after opposing him for much of the week.

Republicans' weaker than expected performance in November's midterm elections left them with a narrow 222-212 majority, which has given outsized power to the right-wing hardliners who have opposed McCarthy's leadership.

Those concessions, including sharp spending cuts and other curbs on McCarthy's leadership, could point to further turbulence in the months ahead, especially when Congress will need to sign off on a further increase of the United States' US$31.4 trillion borrowing authority.

Over the past decade, Republicans have repeatedly shut down much of the government and pushed the world's largest borrower to the brink of default in efforts to extract steep spending cuts, usually without success.

Several of the hardliners have questioned McCarthy's willingness to engage in such brinksmanship when negotiating with President Joe Biden, whose Democrats control the Senate. They have raged in the past when Senate Republicans led by Mitch McConnell agreed to compromise deals.

The hardliners, also including Freedom Caucus Chairman Scott Perry and Chip Roy of Texas, said concessions they extracted from McCarthy will make it easier to pursue such tactics this year - or force another vote on McCarthy's leadership if he does not live up to their expectations.

"You have changes in how we're going to spend and allocate money that are going to be historic," said Representative Scott Perry, the chairman of the hard-right House Freedom Caucus.

"We don't want clean debt ceilings to just go through and just keep paying the bill without some counteracting effort to control spending when the Democrats control the White House and control the Senate."

One of those Democrats, Senate Majority Leader Chuck Schumer, warned that the concessions McCarthy made to win the job may come back to haunt him.

"Kevin McCarthy’s concessions to the extremists in his party make it far more likely that the MAGA Republican controlled House will cause a government shutdown or a default with devastating consequences to our country," Schumer said in a statement.

In a sharp contrast to this week's battles among House Republicans, Biden and McConnell appeared together in Kentucky on Wednesday to highlight investments in infrastructure.

McCarthy's belated victory came the day after the two-year anniversary of a January 06, 2021, attack on the US Capitol, when a violent mob stormed Congress in an attempt to overturn then-President Donald Trump's election loss.

This week's 14 failed votes marked the highest number of ballots for the speakership since 1859, in the turbulent years before the Civil war.

McCarthy's last bid for speaker, in 2015, crumbled in the face of right-wing opposition. The two previous Republican speakers, John Boehner and Paul Ryan, left the job after conflict with right-wing colleagues.

Wielding the speaker's gavel will give McCarthy the authority to block Biden's legislative agenda, force votes for Republican priorities on the economy, energy and immigration and move forward with investigations of Biden, his administration and his family.

But McCarthy has agreed to concessions that mean he will hold considerably less power than his predecessor, Democrat Nancy Pelosi, according to sources involved in the talks. That will make it hard for him to agree to deals with Democrats in a divided Washington.

Allowing a single member to call for a vote to remove the speaker will give hardliners extraordinary leverage.

He has also offered influential committee posts to members of the group, lawmakers said, as well as spending restrictions that aim to reach a balanced budget within 10 years. The agreement would cap spending for the next fiscal year at last year's levels - amounting to a significant cut when inflation and population growth are taken into account.

That could meet resistance from more centrist Republicans or those who have pushed for greater military funding, particularly as the United States is spending money to help Ukraine fend off a Russian assault.

Moderate Republican Brian Fitzpatrick said he was not worried that the House would effectively be run by hardliners.

"It's aspirational," he told reporters. "We still have our voting cards."

 

Pakistan stock Exchange remains under pressure

Pakistan Stock Exchange (PSX) benchmark index witnessed an overall volatile week ended on January 07, 2023. Depletion of foreign exchange reserves continued, fueling uncertainty. Reserves have fallen by approximately US$2 billion since December 2022 began, pulling import cover down to alarming low level.

Although, some respite was seen towards energy stocks such as PPL, OGDC and refineries with news amidst gas circular debt resolution and fresh investment in a coastal refinery from Saudi Arab (aided by the much anticipated refinery policy).

Overall, average daily trading volume remained low at 176 million shares, as compared to 214.2 million shares traded in the earlier week. The Index gained 588 points during the week, depicting a 1.45% increase.

The PKR also lost some footing against the US$ and depreciated 0.31% to end at PKR227.14/US$ parity on Friday. CPI was still at multi-year highs, at 24.5% for December 2022, lower than expectations as compared to 26.6% in October 2022.

Finally, Trade deficit for November 2022 was reported at US$2.79 billion, down 28.4%YoY. Foreign exchange reserves held by State Bank of Pakistan (SBP) were reported at US$5.6 billion as at December 30, 2022.

On the international front, crude oil remained volatile, averaging at US$82/bbl as the global commodity remained in a limbo on the back of on/off Chinese lockdowns and the emergence of the newer COVID Omricon variant.

Other major news flows during the week were: 1) Pakistan will have to repay by January 10, 2023, US$1.3 billion in foreign loans, 2) annual inflation measured by the Consumer Price Index (CPI) was recorded at 24.5% in December last year, 3) The federal cabinet, on Tuesday, approved the Energy Conservation Plan, barring fresh restrictions on wedding halls and markets, 4) Pakistan is eying generating around US$8 billion from the international community and donor agencies for the rehabilitation and reconstruction of the flood-affected people, 5) Finance Minister Ishaq Dar on Wednesday claimed that friendly countries have announced their support.

Sector-wise, amongst mainboard items, Miscellaneous, Refinery and Transport were the top performers. Vanaspati and allied industries, Leather & Tanneries and Cable & Electrical were amongst the worst performers.

Flow wise, net selling was recorded by Mutual Funds with net sell of US$2.9 million). Companies absorbed most of the selling with a net buy of US$3.2 million.

Company-wise, top performers during the week were: PSEL, SHIFA, ATRL, PPL, and SNGP, while top laggards were: PSMC, HCAR, KEL, GADT, and GATM.

The market is expected to remain under pressure in the near future, driven by the weakness in the PKR against the US$ and the concerns regarding the country’s fiscal health.

Pakistan will have to repay around US$8.3 billion in shape of external debt servicing over next three months of current fiscal year.

Additionally, the political uncertainty and any developments regarding the 9th review by the IMF would remain in the limelight, which would unlock inflows from friendly countries.

Consequently, the market will remain jittery amid uncertainty over economic fronts. Analysts continue to advise a cautious approach while building positions in the market.