Aramco to maintain oil production at 12 million bpd

Saudi Aramco, the world's largest oil-producing company, announced on Tuesday that it has received directives from the Ministry of Energy to maintain its maximum sustainable capacity (MSC) at 12 million barrels per day. This directive puts a hold on previous plans to increase production to 13 million barrels.

The determination of MSC, as outlined in the press release, is a responsibility of the state under the Hydrocarbons Law, which was enacted by Royal Decree M/37 on December 20, 2017. This law provides the framework for Saudi Arabia's oil production strategies and capacity decisions.

Aramco also indicated that it would provide an update on its capital spending guidance when it announces its full-year 2023 results in March. This update is eagerly anticipated by investors and market analysts, as it will provide insights into the company's strategic planning and investment priorities in light of the current market conditions and the ongoing energy transition.

Iran denies involvement in killing of US troops

Iran’s mission to the United Nations has noted that Tehran is not embroiled in last night’s drone attacks on the US troops stationed in Jordan.

In a statement on the late Sunday, it said that this matter is not tied to Iran but a kind of conflict between US forces and resistance groups.  

The statement comes in the wake of drone attacks on a US base on the border of Jordan and Syria that left three American forces killed and at least 34 wounded.

It went on to add that there is no link in the attack, underling that the incident was part of the conflict between the army of the United States of America and resistance groups in the region, which reciprocate retaliatory attacks.”

The US President Joe Biden purportedly said that Iranian-backed groups are culprits of the attack.

The escalation of menacing rhetoric started a day after the incident among certain world countries and anti-Iran media outlets, alleging that Iran has provided weaponry to its so-called proxies in Iraq and Yemen. Such a spurious claim was vehemently dismissed by Iranian officials.   

The attack marks the first time that US military personnel were killed since the onset of the Israeli onslaught on Gaza on October 7.

Biden, in his statement, pointed out that all kinds of efforts are underway to garner information about the culprits and then bring them to justice.    

“Have no doubt – we will hold all those responsible to account at a time and in a manner of our choosing,” he said.

Based on a statement issued by the United States Central Command (USCENTCOM or CENTCOM), it was stated that there is a possibility that the number of those injured in the attack would increase.  

Eight personnel were evacuated from Jordan for higher-level care, but are in stable condition.

The US president vowed revenge for those involved in the attacks, saying, “These service members embodied the very best of our nation: Unwavering in their bravery. Unflinching in their duty. Unbending in their commitment to our country — risking their own safety for the safety of their fellow Americans, and our allies and partners with whom we stand in the fight against terrorism. …  have no doubt – we will hold all those responsible to account at a time and in a manner our choosing.”

Iranian Foreign Ministry spokesman Nasser Kanaani reacted to the attacks on Monday, saying, “As we have clearly stated before, the resistance groups in the region are responding to the war crimes and genocide of the child-killing Zionist regime and… they do not take orders from the Islamic Republic of Iran.”

The spokesman ruled out the baseless accusations against Iran, describing them as a blame game and a plot by those who try to protect their own interests and cover up their problems by dragging the US into a new conflict in the region and provoking it to intensify the crisis.

He went on to add, “These groups decide and act based on their own principles and priorities as well as the interests of their country and people.”

Kanaani also averred that the allegations of Iran’s involvement are popped up by certain countries having political machinations to distort the realities and are under the direct influence of the child-killing Zionist regime. 

The Islamic Resistance in Iraq claimed responsibly for the attacks on three bases, including one on the Jordan-Syria border.

Since the start of Israel’s onslaught on the Gaza Strip on October 7, there have been around 160 attacks on US forces in Iraq and Syria. Most of those have been claimed by regional resistance forces.

Iranian officials have frequently said resistance groups act on their own in response to Israeli crimes in Gaza.

 

US attack on Iran could prove a fatal mistake

The killing of three United States troops and wounding of dozens more on Sunday is piling political pressure on President Joe Biden to deal a blow directly against Iran, a move he's been reluctant to do out of fear of igniting a broader war.

However many in the United States believe that direct attack on Iran or its bases in the neighboring countries could prove a big mistake

"As we see now, it is spiraling out of control. It's beginning to emerge as a regional war, and unfortunately the United States and our troops are in harms way," Democratic Representative Barbara Lee said, renewing calls for a ceasefire in the Israel-Palestinian war.

Democratic Representative Seth Moulton, who served four tours in Iraq as a Marine, urged against Republican calls for war, saying "deterrence is hard; war is worse.”

"To the chicken hawks calling for war with Iran, you're playing into the enemy's hands—and I’d like to see you send your sons and daughters to fight," Moulton said. "We must have an effective, strategic response on our terms and our timeline."

Experts caution that any strikes against Iranian forces inside Iran could force Tehran to respond forcefully, escalating the situation in a way that could drag the United States into a major Middle East war.

Jonathan Lord, director of the Middle East security program at the Center for a New American Security, said striking directly inside Iran would raise questions for Tehran about regime survival.

"When you do things overtly you represent a major escalation for the Iranians," Lord said.

Charles Lister of the Washington-based Middle East Institute said a likely response would be to go after a significant target or high-value militant from Iran-backed groups in Iraq or Syria.

"What happened this morning was on a totally different level than anything these proxies have done in the past two to three months... (but) despite all of the calls to do something in Iran, I don't see this administration taking that bait," Lister said.

"Unless the US is prepared for an all out war, what does attacking Iran get us," the official said.

Israel had hit Iranian targets in Syria for years, without dissuading Iran, including four Iranian Revolutionary Guard Corps officials in Damascus.

The United States has also struck Iranian-linked targets outside of Iran in recent months.  

But Lister said the US had gone after Iranians outside of Iran in the past, like the 2020 strike against top Iranian general Qassem Soleimani, and only yielded a response during a limited period of time.

"So to an extent, if you go hard enough and high enough, we have a track record of showing that Iran can blink first," Lister said.

According to a Reuter report, Biden's response options could range anywhere from targeting Iranian forces outside to even inside Iran, or opting for a more cautious retaliatory attack solely against the militants responsible.

The US forces in the Middle East have been attacked more than 150 times in Iraq, Syria, Jordan and off the coast of Yemen since the Israel-Hamas war erupted in October.

But until Sunday's attack on a remote outpost known as Tower 22 near Jordan's northeastern border with Syria, the strikes had not killed the US troops nor wounded so many. That allowed Biden the political space to mete out US retaliation, inflicting costs on militants without risking a direct war with Tehran.

Republicans accused Biden of letting American forces become sitting ducks, waiting for the day when a drone or missile would evade base defenses. They say that day came on Sunday, when a single one-way attack drone struck near base barracks early in the morning.

"He left our troops as sitting ducks," said Republican US Senator Tom Cotton. "The only answer to these attacks must be devastating military retaliation against Iran's terrorist forces, both in Iran and across the Middle East."

The Republican who leads the US military oversight committee in the House of Representatives, Representative Mike Rogers, also called for action against Tehran.

"It's long past time for President Biden to finally hold the terrorist Iranian regime and their extremist proxies accountable for the attacks they've carried out," Rogers said.

Former President Donald Trump portrayed the attack as a consequence of Joe Biden's weakness and surrender.

One Democrat openly voiced concern that Biden's strategy of containing the Israel-Hamas conflict to Gaza was failing.

 

 

 

Pakistan Elections 2024: Likely Outcomes

According to a report by Pakistan’s leading brokerage house, Topline Securities, after a lot of uncertainties, Pakistan Elections are all set for February 8, 2024, to elect representatives for the National and Provincial Assemblies for the next five years.

Many political analysts a few weeks back were not sure about timely elections due to legal, operational, and weather-related issues. Now it seems that all these issues have been settled, and the process is likely to be completed on time.

According to detailed strategy note titled 'Stock Market Recovery Has Just Begun; Index Likely to Reach 75,000 in 2024,' dated November 18, 2023, mentioned that things are now looking stable, and elections are likely to happen on February 8, 2024, contrary to earlier fears that elections may be delayed for a few years.

A smooth transfer of power to an elected government will help overcome concerns of bilateral and multilateral lenders, including the IMF, at a time when Pakistan is facing a severe external debt repayment challenge.

IMF in its country report in July 2023, stated that the new Stand By Agreement (SBA), can play a crucial role in anchoring policies ahead of the national elections due in the fall and until a new government is formed. IMF team also met with leaders of major political parties in Pakistan to get assurances of support for key objectives ahead of final approval of US$3 billion SBA in July 2023 crucial to save the country from default.

With only two weeks left for the Elections, political activities and election campaign is not what it used to be. This could be due to lack of interest by political parties or may be due to lesser competition in most of the constituencies after PTI did not get the “Bat” symbol.

Looking at the manifestos and promises of major parties, it seems no one is addressing the key economic challenges faced by Pakistan. Most of the parties are focusing more on the popular measures to gain public confidence amid record high inflation.

Comparing the performance of three large political parties in their last tenure, PML-N and PTI have performed relatively well on key economic indicators as against PPP. This has also being endorsed by a recent news analysis by Bloomberg whereas per Misery Index, PML-N (score 14.5%) has better record on managing the economy followed by PTI (score 16.1%) and then PPP (score 17.2%).

Considering the recent developments, the question investors are interested in is not who will win the elections but whether the new government will get a majority or if it will be a weak coalition government. As reported by leading political experts, it looks like PML-N will form a new coalition government. This is also supported by few recent surveys.

The brokerage house believes that in case one party gets 50% plus seats, that will definitely boost investors' confidence and markets will react positively. This will also give a positive signal to the IMF and other lenders. On the contrary, a coalition government with support of smaller parties will remain fragile and may struggle to implement the much-needed economic reforms.

Another key area to look for is how the new government will manage economic challenges, especially to deal with the IMF for a long-term program. Considering the not-so-pleasant experience with the PML-N nominated Finance Minister in the last opposition-led government of PDM, investors are eager to see the finance team of the new government.

The new government and its Finance Minister can play a significant role in negotiating with friendly countries for debt rollover/debt re profiling and finalizing a new IMF program that requires a lot of painful reforms.

Furthermore, it will be interesting to evaluate the new government's relationship with the establishment. Pakistan has a poor history of worsening civil-military relationships that have badly affected the political continuity, with negative implications for the economy and the markets.

Pakistan Stock market recovery is likely to continue in the year 2024. The brokerage house expects benchmark KSE-100 total return index to reach 75,000 by December 2024. However this is based on current low PE multiples without assuming any re rating amid high risk of debt sustainability. Investors may also see a post election rally in line with historical trend.

Smooth transfer of power to new government after elections, new long term funding program from IMF and expected fall in Interest rate will be the key drivers of equity market in 2024.

In spite of recent rally, Pakistan market is currently trading at PE of 3.7x based on 2024 estimated earnings. This is far lower than last 5 year and 10 year average PE of 6x and 8x respectively. This is even lower than countries that have defaulted on external debt. 

The brokerage house prefers high quality private sector companies with strong cash flows. In cyclical sectors it prefers Cement and Steel due to expected decline in policy rate and better volumetric sales. It also likes Banks due to unmatched valuation.

Its 2024 top picks include Meezan Bank (MEBL), United Bank (UBL), MCB Bank (MCB), Mari Petroleum (MARI), Lucky Cement (LUCK), Maple Leaf Cement (MLCF), Fauji Cement (FCCL), Engro Corporation (ENGRO), Pak Elektron (PAEL), Indus Motors (INDU) and Interloop (ILP).

On the other hand some mid and small caps have the potential to provide above average gains that includes Pakistan Aluminium Beverage Cans (PABC), Mughal Iron & Steel (MUGHAL), Image Pakistan (IMAGE), Tariq Glass (TGL), Century Paper & Board (CEPB), Panther Tyre (PTL), and Murree Brewery (MUREB).

 

Julia Sebutinde: Only ICJ judge opposes all measures against Israel

Julia Sebutinde, Uganda’s representative to the International Court of Justice (ICJ), has become a hero amongst Israel supporters, though her country distanced itself from her. She was among the 17 judges who deliberated on interim measures in the case concerning the Application of the Genocide Convention in the Gaza Strip. She uniquely voted against all proposed provisional measures, standing out as the sole permanent judge to do so, in contrast to Ad hoc Judge Aharon Barak, who opposed most but supported two.

In her dissenting view, she argued that the core of the dispute was fundamentally political, not legal, and asserted the absence of a credible indication of genocidal intent by Israel.

Adonia Ayebare, Ambassador and Permanent Representative of Uganda to the United Nations, criticized Sebutinde on X.

“Justice Sebutinde ruling at the International Court of Justice does not represent the Government of Uganda’s position on the situation in Palestine. She has previously voted against Uganda’s case on Democratic Republic of the Congo (DRC).

Uganda’s support for the plight of the Palestinian people has been expressed through Uganda’s voting pattern at the United Nations,” the ambassador tweeted.

69-year-old Julia Sebutinde is a distinguished judge from Uganda, serving her second term on the International Court of Justice (ICJ) since March 2012. She is the first African woman to hold this position. She has a rich background in law, having graduated from Makerere University, obtained a diploma from the Law Development Centre in Kampala, and a Master of Laws from the University of Edinburgh, after which she worked in various legal capacities in Uganda, Britain and Namibia. Sebutinde's notable career includes serving as a judge in the Special Court for Sierra Leone, presiding over high-profile corruption inquiries in Uganda, and her election to the ICJ, reflecting her significant contributions to international justice.

“In my respectful dissenting opinion, the dispute between the State of Israel and the people of Palestine is essentially and historically a political one,” she wrote in her dissenting opinion.

“Calling for a diplomatic or negotiated settlement, and for the implementation in good faith of all relevant Security Council resolutions by all parties concerned, to find a permanent solution whereby the Israeli and Palestinian peoples can peacefully coexist,” she wrote.

 

 

 

 

 

Genocide in Gaza by Israel would have not been possible without silence of Muslim rulers

Many analysts, including me, have not been able to comprehend the reasons of silence of Muslim rulers on the genocide going on in Gaza for more than 100 days. Today, I read a post at LinkedIn and sharing it with readers of my blog.

In November 2023 Israeli Prime Minister Benjamin Netanyahu said, "I say to the Arab leaders, if you want to preserve your interests, you must do one thing, Remain silent."

They have complied with this demand as if it were a command revealed by Allah (God). Abdullah of Jordan has mobilized his armed forces to protect the border for the IDF, Sisi of Egypt has ensured the Israeli terrorist genocide continues in all its forms including starvation and preventing aid from reaching Gaza. Even Erdogan from Turkey did not want to be left out in serving Netanyahu, he has increased trade with the Zionist entity ensuring they have essential resources such as steel for weaponry and munitions.

It will not be wrong to say that the Muslim rulers have played a pivotal role in this genocide and have worked tirelessly to silence their own populations and have threatened their own armed forces from even thinking of taking action to save the people of Gaza.

It is easy to infer that these rulers are truly loyal servants of Israel and without their help genocide in Gaza would not have been possible.

Israeli President Herzog should confer the most prestigious award, ‘The Israeli Presidential Medal of Honor’ to these rulers.

 

Bangladesh: Apparel export to EU falls 20%

Bangladesh’s apparel exports to the European Union (EU) in the 11 months, from January to November 2023, declined by 19.92% to 16.26 billion euro from 20.30 billion euro during the same period of 2022.

Exporters said that the shipment of readymade garments to the EU market decreased in recent months due to the economic slowdown caused by the Russia-Ukraine war.

Global brands and buyers also placed orders in lower quantity due to the election time in Bangladesh but the orders started to increase after the national election in the country.

They hoped that the export to EU would rebound in the next quarter as buyers started to increase their orders thanks to easing inflation.

According to data from Eurostat, the statistical office of the European Union, the readymade garment imports of the EU from the world in January-November 2023 fell by nearly 10% cent to 82.71 billion euro from 91.89 billion euro during the same period of 2022.

Apparel imports of the EU from China in the first 11 months of 2023 declined by 21.42% to 21.15 billion euro from 26.92 billion euro during the same period of 2022.

Although China remained the top apparel exporter to the EU in value, the Eurostat data showed that, in terms of volume, Bangladesh emerged as the highest knitwear exporter to the market in January-November 2023.

Bangladesh’s woven garment exports to the EU in the first 11 months of 2023 were reported at 6.89 billion kilogram while those of China were 5.74 billion kilogram.

In value terms, Bangladesh’s knitwear exports to the EU in January-November of 2023 were reported at 9.94 billion euro against China’s exports of 10.48 billion euro during the period under review.

Bangladesh Garment Manufacturers and Exporters Association President Faruque Hassan recently said that apparel exports to the EU would come back on a positive track in the second quarter of 2024 as the inflation was coming down in the western countries and retail sales were getting better.

He also said that not only Bangladesh but also all the major RMG suppliers witnessed negative growth in the EU and the United States as the global demand decreased due to the economic turmoil.

Apparel imports of the EU from Turkey in January-November of 2023 declined by 13.42% to 9.20 billion euro from 10.62 billion euro during the same period of 2022.

India’s RMG exports to the EU in the first 11 months of 2023 also fell by 11.87% to 3.81 billion euro from 4.33 billion euro during the same period of 2022.

As against this, apparel imports of the EU from Vietnam during January-November of 2023 grew by 2.48% to 3.49 billion euro from 3.40 billion euro during the same period of 2022.