Call for ending attacks on ships in Red Sea

The International Maritime Organization (IMO) on Friday demanded an immediate cessation of hostilities against ships and seafarers navigating through the strategic Red Sea and Gulf of Aden. The call comes in response to increasing maritime threats in these crucial waterways.

The IMO's Maritime Safety Committee adopted a resolution in London condemning these acts as "illegal and unjustifiable," highlighting their direct threat to the freedom of navigation and the substantial disruptions they cause to regional and global trade.

This resolution marks the first such formal stance by the IMO member states since the seizure of the MV Galaxy Leader cargo ship by the Yemeni Houthi group in November in the Red Sea.

"Since then, around 50 dangerous and destabilizing maritime attacks have occurred, resulting in the loss of several seafarers' lives, while the 25 crew members of the Galaxy Leader remain hostages," the agency reported, calling for their "immediate and unconditional release."

The resolution criticized the Houthis' actions for endangering lives, impeding vital humanitarian aid deliveries, increasing the cost of such aid, and destabilizing the region. It also emphasized the importance of resolving the crisis through peaceful dialogue and diplomacy.

IMO Secretary-General Arsenio Dominguez appealed to governments and relevant organizations to assist affected seafarers and to intensify efforts to resolve the crisis. He highlighted the Red Sea's significance as one of the world’s busiest maritime routes, especially for oil and fuel shipments.

China and India vying for influence Bangladesh

Bangladesh faces a complex diplomatic challenge as it navigates the competing interests of India and China regarding the Teesta River project. India is concerned about strategic security and maintaining regional influence, while China's involvement offers economic benefits and potential infrastructure development, raising India's geopolitical concerns. Bangladesh faces the challenge of balancing these interests while safeguarding its sovereignty, security, and development priorities.

The Teesta River Comprehensive Management and Restoration Project, estimated to cost US$1 billion, has attracted significant interest from China, which has submitted a proposal for the project. An agreement might be signed during Prime Minister Sheikh Hasina’s upcoming visit to China. In response, India has sent its foreign secretary, Vinay Mohan Kwatra, to Bangladesh, offering Indian funding for the Teesta project to counter China's involvement, putting Dhaka in a difficult position.

Both China and India have been vying for influence in Bangladesh. In the past, Bangladesh canceled the China-backed Sonadia deep-sea port project due to India's discomfort with China's growing presence in a strategically important area.

Now, the Teesta project has become the latest focal point of this geopolitical competition. India's keen interest in the project is driven by geographical and strategic factors, particularly the project's proximity to the "Chicken Neck" corridor, a vital area connecting India’s Northeast with the rest of the country.

Despite the strong relations between Bangladesh and India, the Teesta River water-sharing issue remains unresolved, heightening Dhaka’s impatience. India’s shift from promising a water-sharing treaty to offering to fund the project seems to be a strategic move to counter China's involvement. This approach raises questions about why India prefers to finance the project instead of ensuring Bangladesh's access to water.

The Teesta River project has significant implications for Bangladesh's relations with India and China. Bangladesh has to maintain neutrality in its foreign policy, as the project could force it to choose sides.

Engaging with India could strengthen bilateral relations but might alienate China. Conversely, partnering with China could yield economic benefits but strain relations with India.

Prime Minister Hasina might find it challenging to replace China with India in the project due to India's strict loan terms, slow disbursement, and questionable capacity to execute such a large-scale project.

Moreover, abandoning the project with China after already canceling the Sonadia port project could severely strain Bangladesh’s ties with Beijing, its top trade and defense partner.

Successful implementation of the Teesta River project requires nuanced diplomacy and strategic decision-making by Bangladesh. Dhaka must leverage its diplomatic channels to engage constructively with both India and China to ensure neither feels slighted, aligning the project with Bangladesh’s national interests and priorities.

How long will Biden protect Israeli war criminals?

This week the prosecutor from the International Criminal Court (ICC) announced it was seeking arrest warrants for Israeli prime minister and top Hamas leaders, then came a ruling from the ICC ordering Israel to immediately halt the assault on Rafah.

As usual, Israel responded to this news with defiance, denials, and deceit.

The official statement released by Israel via X/Twitter flatly denied that they are even conducting military operations against civilians in Rafah and lied about keeping the Rafah passage open to allow aid in. Everyone can see the truth of what is happening there. Some will choose to disbelieve their own eyes, and they will have to live with that choice.

Many will not close their eyes to Israel’s atrocities, and also not stop until Palestine is free.

In the forthcoming election of United States, scheduled for November many of the citizens stand unequivocally with the people of Gaza. Their fight is for people, planet, and peace as inextricable from the fight for Palestinian liberation.

Benjamin Netanyahu may have a close, personal friend, Joe Biden, who may not be there after November 2024.

The first thing the new president may do, end the supply of weapons and military aid to Israel that is in violation of international law, including its practice of genocide, ethnic cleansing, and the occupation of Gaza and the West Bank.

The new president may also push the Senate to ratify the Rome Statute recognizing the legal authority of the International Criminal Court. He may also direct all US federal agencies with the proper authority to recognize and execute any valid arrest warrant issued by the ICC over Israel’s war crimes.

If he has the spine, he may not allow the foreign policy of the most powerful and influential nation on earth to be dictated by a despot clinging to the last threads of his power in a genocidal apartheid state.

Cordial Saudi-Iranian ties to continue, say MBS

Iranian interim president, Mohammad Mokhber, received a phone call from Saudi Crown Prince Mohammad bin Salman on Friday afternoon in which he underscored that the cordial relations between Tehran and Riyadh will continue after the passing of President Ebrahim Raisi. 

“The incident was very painful for us. The loss of Raisi hurt all of us, and the loss of the Minister of Foreign Affairs of Iran, who was very friendly with our Minister of Foreign Affairs, was also sorrowful,” the Saudi crown prince was quoted by Iranian media as telling Mokhber. 

Bin Salman stressed that Saudi Arabia will continue the path of developing relations with Iran, a goal that he described as being pursued by President Raisi and Foreign Minister Hossein Amir Abdollahian. 

He announced his country's readiness to expand economic relations with Iran.

Mokhber, for his part, thanked Saudi Arabia for its messages of condolences with Iran over the demise of its president. 

Describing the expansion of relations with neighboring countries as one of the important strategies of the late President Raisi, Mokhber noted, “It was difficult for us to lose a popular and hardworking president like Raisi, but the course of the country will not change and the same spirit of interest and trust between Iran and Saudi Arabia during the martyred president's term will continue.”

He stressed, “The continuation of the neighborhood policy of the 13th government and the development of relations with the countries of the region is the only option before all of us, and companionship and empathy with each other is the guarantee of stability and prosperity in the region.”

In this call, Mokhber invited the Saudi crown prince to pay a visit to Iran. Bin Salman accepted the invitation and extended an invitation for Mokhber to visit Saudi Arabia. 

 

Pakistan Stock Exchange posts lackluster movement

The market experienced volatility during the week ended on May 24, 2024 due to a lack of progress in negotiations between the Pakistan Government (GoP) and the International Monetary Fund (IMF) regarding the staff level agreement. Despite the talks, both the parties denied officially labeling the discussions as negotiations, contributing to uncertainty and fluctuations in the market.

However, Friday saw news of progress on a new EFF program emerged, boosting market confidence and leading to the KSE-100 Index achieving its highest-ever closing. This positive development counteracted previous market volatility, signaling optimism among investors regarding the economic outlook and financial stability. Overall, the benchmark index closed at 75,983 points on Friday, with a gain of 640 points or 0.85%WoW.

Further, SPI weekly inflation remains consistently on downward trend as per recent readings, suggests a slowing down of CPI data for the current month.

Yields in the mid-week PIB auction also declined slightly.

Positivity soared with news of the forthcoming UAE's pledge of a US$10 billion investment.

Negotiations regarding Reko Diq deal between Pakistan and Saudi investors gained ground, added to the optimism.

Additional revenue measures are being proposed by the authorities by adding 18% sales tax on various zero-rated and exempted goods in the upcoming budget.

Overall, average trading volumes were up by 0.7%WoW, clocking in at 558.18 million shares, as compared to 554.51 million shares traded in the earlier week.

On the currency front, PkR remained flat WoW to close at 278.21.

Other major news flows during the week included: 1) IMF unsatisfied with Pakistan’s steps of bringing real estate into tax net, 2) UN projects Pak economy to grow by 2pc in 2024, 3) Pakistan’s current account records surplus of US$491 million in April and 4) Nepra questions 25% proposed hike in ‘PPP’.

Power Generation & Distribution, Leather & Tanneries, Tobacco, Commercial Banks and Technology & Communications were amongst the top performing sectors, while Sugar & Allied Industries, Automobile Parts & Accessories, Transport, Modarbas and Refinery were amongst the worst performers.

Major net selling was recorded by Foreigners with a net sell of US$12.08 million. Banks/DFI absorbed most of the selling with a net buy of US$10.44 million.

Top performing scrips of the week were: SCBPL, KEL, NPL, SRVI and SHFA, while laggards included: THALL, NRL, DAWH, PSEL and SEARL.

Market is anticipated to remain focused on FY25 budget-related news in the near term. Overall, some profit-taking can be expected with the index hovering at its record high.

With foreign buyers consistently purchasing, the rally is expected to continue amidst the market's attractive valuations. Furthermore, the upcoming Monetary Policy Committee, scheduled just after the budget, will also be in the limelight.

Despite real interest rates being significantly positive, new taxation measures could pose a risk to the inflation outlook and possible start of monetary easing.

 

 

 

Indian export of refined fuels on the decline

Use of crude oil vessels to ship refined fuels such as diesel to key European markets by Indian refiners has declined in May after volumes neared two-year high levels last month.

That is because of rising inventories in the Antwerp-Rotterdam-Amsterdam region and shaky east-west diesel price spreads undermining the case for sellers to ship large volumes of the industrial fuel to West.

While higher April shipments from India to Europe provided a floor for Asian margins, fewer such voyages in May will likely compel Indian refiners to shift diesel sales back to Asia, exacerbating a supply glut in the region, analysts and traders said.

Diesel exports using Suezmax and Aframax vessels Mesta, Pertamina Halmahera and Marlin Santorini - mostly from Reliance Industries' Jamnagar refinery - reached a near two-year high of around 380,000 metric tons (2.831 million barrels) in April, Kpler, Vortexa and LSEG shiptracking data showed.

Shiptracker Kpler in February estimated a switch by 35 Aframax crude tankers to carry refined products instead of crude.

Traders switched to using Suezmax and Aframax tankers - that typically load so-called "dirty" crude oil and residue fuel - for carrying "clean" refined products after freight rates for long-range (LR) tankers spiked following Houthi attacks on ships in the Red Sea that forced longer voyages and tightened vessel availability.

"At the time it was a reflection of how tight the LR1 and LR2 clean product tanker market was given the additional tonne miles vessels were having to do to avoid the Red Sea, and the lack of available prompt tonnage to book because ships were massively displaced given the additional sail times," said Wood Mackenzie's research analyst Emma Howsham.

The crude oil market was also weaker, as refinery maintenance in the United States and Middle East dented demand for dirty vessels, making it attractive to ship diesel using them, she added.

The cost for shipping 65,000 tons of fuel on a LR1 tanker averaged US$75 per ton in March and April from India to northwest Europe as compared to US$60 a ton in February, pricing data from SSY Tanker showed.

Even after the cost for scrubbing and cleaning a vessel to load ultra-low sulphur diesel, that was still nearly twice the cost for shipping up to 130,000 tons of fuel on a Suezmax vessel on a similar route, traders said.

Traders have been among the biggest shippers of Indian-origin diesel, and they have the option for several discharge destinations and thus have room to ship using bigger vessels, one Europe-based trade source said.

The trend has abated for May with no dirty tankers carrying diesel on the India-northwest Europe route, shiptracking data showed, as analysts expect Europe's supply to be long.

The economics for Indian refiners to supply to Europe via the Cape of Good Hope looks challenging as "European supply looks ample in the coming months", said Woodmac's Howsham.

 

Rafah: Food distribution suspended

The United Nations said it has suspended food distribution in the southern Gaza city of Rafah, where more than a million Palestinians are sheltering.

A spokesperson for the UN's World Food Program (WFP) announced that food aid would halt in Rafah because of a lack of supplies and insecurity, according to The Associated Press.

Writing on X, the WFP wrote that the rest of Gaza was also at risk. "Our stocks are fast running out without continued access."

Palestinians are struggling to access basic necessities in Gaza as Israel carries out its war against Hamas.

Israeli troops seized a border crossing that had facilitated supply deliveries in Rafah earlier this month, and Israel now controls every aid checkpoint. Humanitarian aid groups have accused Israel of impeding aid efforts.

Israeli Prime Minister Benjamin Netanyahu told CNN on Tuesday that Israel has been trying to get aid into Gaza but Hamas has been "looting" it.

"They were taking it for themselves or extorting the population. We were letting the aid in from the start," Netanyahu said. "We're getting hundreds of trucks every day in."

A State Department review earlier this month said the US has "deep concerns" about Israel potentially impeding aid into Gaza, though it did not reach a conclusion on the matter. It also found the country is taking steps to improve the situation, even if still inadequate.

To address the crisis, the US military constructed a pier that connects to a beach in Gaza. It allows aid coming from the island nation of Cyprus to reach Gaza through a maritime corridor.

But for the past two days, no aid has gotten into Gaza from the pier area, U.N. officials told Reuters.

Pentagon Press Secretary Maj. Gen. Pat Ryder said more than 569 metric tons of humanitarian assistance has been delivered through the pier, though that means it has arrived for distribution and not all of it has been delivered yet.

Noting the difficulties, Ryder said there are discussions to find alternative routes for the safe movement of staff and cargo from the pier distribution area but said Gaza was a combat zone, complicating distribution. 

"We've been very clear from the beginning that we are going to take a crawl-walk approach to make sure that we are implementing this system in a way where we're working out the processes, the procedures," he said.

"You're going to see as we work together the amount of aid increase and the ability to get it distributed increase."