Iran: Zarif to lead transitional council

Iran's President-elect, Masoud Pezeshkian, has appointed former Foreign Minister Mohammad Javad Zarif as the head of the Strategic Council on Foreign Relations for the transition period in his first presidential decree. 

Zarif was one of the most prominent reformist figures backing Pezeshkian during his presidential campaign. The former foreign minister became a household name after he brokered the Joint Comprehensive Plan of Action (JCPOA) in 2015. 

The council, comprised of experts and advisors, will focus on assessing potential candidates for key cabinet positions and ensuring a seamless handover of leadership. 

In a message on his X account, Zarif said Pezeshkian has yet to choose candidates for any vice-presidency or ministerial positions. 

"So far, no candidate for any position, including first vice president, has even been considered,” the former top diplomat announced. "The review process will start after receiving proposals from NGOs, scientific associations, trade associations, and the private sector." 

The council is reportedly set to convene meetings with various stakeholders on Saturday to conduct thorough evaluations of potential candidates.

Pezeshkian's office had earlier issued a call for input on cabinet members, inviting a wide range of social groups and political parties to participate in the process. 

 

Pakistan Stock Exchange experiences volatility

During the week ended on July 12, 2024 Pakistan Stock Exchange remained volatile due to uncertainty surrounding the Supreme Court's verdict on reserved seats. The benchmark index closed at 79,944 points on Friday with a loss of 269 points or 0.33%WoW.

However, despite the verdict announced on Friday being in favor of the opposition party, the market managed to hold its ground.

On negotiations with IMF, the lender of last resort demanded the abolition of Sovereign Wealth Fund (PSWF) along with the implementation of 45% tax on agriculture income.

Prime Minister's announcement of a PKR50 billion subsidy for residential consumers of up to 200 units has yet to elicit a response from the IMF.

Alongside, NEPRA increased energy tariffs for other consumers’ categories by PKR3.9 to PKR7.1/kWh for FY25, while reducing rates for industrial consumers.

On the macroeconomic front, remittances for June 2024 rose to US$3.16 billion, an increase of 44%YoY. This brought the total remittances for FY24 to US$30.3 billion (up 11%YoY).

Meanwhile, passenger car and LCV sales dropped to their lowest level in 15 years, with only 104,000 units sold in FY24.

With the overall volatility in market, participation also remained down by 0.3%WoW, with the average daily traded volume remaining at 439 million shares.

On the currency front, PKR largely remained flat against the greenback, closing the week at PKR278.4/US$.

Other major news flows during the week included: 1) the GoP doubles PSDP spending to PKR705 billion, 2) GoP debt soars to PKR67.8 trillion in May, 3) Gop raises PKR442 billion through T-bills, yields fall by up to 18bps, and 4) Tax-to-GDP ratio in FY24 hovers 9%.

Auto assemblers, Automobile parts & accessories, and Woollen were amongst the top performers, while Miscellaneous, Vanaspati & allied industries, and RIET were amongst the worst performers.

Major net selling was recorded by Individuals and mutual funds with a net sell of US$2.58 million and US$2.48 million, respectively. Foreigners absorbed most of the selling with a net buy of US$3.96 million.

Top performing scrips of the week were: NBP, FFBL, UNITY, ABL and PKGP, while laggards included: SCBPL, TRG, THALL, YOUW and KTML.

According to AKD Securities, the market is expected to maintain a positive outlook, despite the potential for a short-term lackluster impact from recent political developments.

The rally overall is anticipated to persist due to the attractive valuations, with the forward P/E continuing to remain below 4.0x.

Market participants focus is anticipated to remain on upcoming inflation figures, the next Monetary Policy Committee meeting (schedule pending announcement), and ongoing negotiations with IMF over EFF program.

 

 

Gallant demands investigation against Netanyahu

Israeli Defence Minister Yoav Gallant on Thursday called for a state inquiry into failings around the October 07, 2023 Hamas attack, saying it should investigate Gallant himself and his boss, Prime Minister Benjamin Netanyahu.

Gallant made the comments at a graduation ceremony for new military officers, also attended by Netanyahu, whose coalition government is already strained by infighting.

The state inquiry, he said, "must be objective, it needs to investigate all of us, those who make decisions and those who carry them out, the government, the military, and the security agencies."

"It must investigate me, the defence minister, it must investigate the prime minister," Gallant said, to cheers from the crowd.

Netanyahu has dismissed past calls to form a state inquiry into the October 07 attack, which caught Israel off guard and sparked the war in Gaza, saying that examinations into what happened should be carried out once the war ends.

Only the government can decide to form a state commission of inquiry, which has a broad mandate and its findings carry weight. The chief justice of the Supreme Court chooses its members.

Gallant has broken ranks with Netanyahu before.

Last year, after months of nationwide protests against government plans to curb Supreme Court powers, Gallant said proposed legislation should be dropped, warning the public dispute could hurt national security.

Netanyahu immediately sacked him, spurring tens of thousands of Israelis to take to the streets in support of Gallant. The veteran prime minister eventually relented and Gallant kept his job.

Gallant has since clashed with Netanyahu over Gaza strategy, prompting some members of their Likud party to call for him to be dismissed from his post.

 

 

 

 

 

Oil tanker seized by Iran in 2023 bound for Oman port

According to Reuters, a Chevron-chartered oil tanker seized by Iran more than a year ago is heading toward the Sohar port in Oman, LSEG ship tracking data showed on Friday.

On Thursday, ship tracking data showed the vessel moving to international waters, with the destination showing as Khor Fakkan in the United Arab Emirates.

The Marshall Islands-flagged Advantage Sweet was boarded by Iran's military in the Gulf of Oman in April 2023 after an alleged collision with an Iranian boat.

There was no immediate comment from Chevron.

The US State Department called in March for the immediate release of the tanker.

To read details of the arrest click https://shkazmipk.blogspot.com/2023/04/iran-seizes-oil-tanker-in-gulf-of-oman.html

 

 

China hits back at NATO

Chinese foreign minister Wang Yi has hit back at NATO's "groundless accusations" that Beijing is helping Russia in its war on Ukraine. He has also warned the Western alliance against stirring up confrontation.

Wang's comments, made in a call with his Dutch counterpart, came hours after leaders of NATO member states gathered in Washington DC and issued a declaration on the war.

They accused China of being a "decisive enabler" of Russia through its "large-scale support for Russia's defense industrial base", in some of their harshest remarks yet about Beijing.

They called on China to stop "all material and political support" to Russia's war effort such as the supply of dual-use materials, which are items that can be used for both civilian and military purposes.

Western states have previously accused Beijing of transferring drone and missile technology and satellite imagery to Moscow.

The US estimates about 70% of the machine tools and 90% of the microelectronics Russia imports now come from China.

Beijing was also accused of conducting "malicious cyber and hybrid activities, including disinformation" on NATO states.

On Thursday, while speaking to the Netherlands' new foreign minister Caspar Veldkamp, Wang said "China absolutely does not accept" all these accusations and insisted that they have "always been a force for peace and force for stability".

In comments carried by state media, he said that China's different political system and values "should not be used as a reason for NATO to incite confrontation with China", and called for NATO to "stay within its bounds".

His remarks was the latest in a flurry of angry responses from Beijing.

Earlier on Thursday, a foreign ministry spokesperson said NATO was smearing China with "fabricated disinformation", while Beijing's mission to the European Union told the alliance to "stop hyping up the so-called China threat".

Beijing has long rebutted accusations that it has been aiding Russia in the war and insists that it remains a neutral party. It has called for an end to the conflict and proposed a peace plan, which Ukraine has rejected.

Besides the growing accusations of military support, observers have also pointed out that Beijing's purchases of vast amounts of oil and gas have helped prop up Russia's economy crippled by sanctions and replenish coffers drained by war spending.

Beijing's official rhetoric on the conflict often mirrors Moscow's — like them, China still does not call it a war — and Chinese President Xi Jinping has maintained a close relationship with President Vladimir Putin, with both of them famously declaring their partnership has "no limits".

Beijing has accused the US and other Western states of pouring "fuel on the fire" by supplying lethal weapons and technology to Ukraine for its defense.

In recent weeks, several countries have gone a step further and allowed Ukraine to use their weapons to hit targets inside Russia.

Biden refers to Zelenskiy as Putin

Joe Biden has been under intense scrutiny in recent days and has faced doubts, including from members and donors of his own Democratic Party, about his re-election chances after a weak and faltering performance in a debate late last month against Republican former President Donald Trump. He provided his critics yet another chance by addressing Zelenskiy as Putin at NATO Summit.

According to Reuters, US President Joe Biden on Thursday mistakenly referred to Ukrainian President Volodymyr Zelenskiy as Russian President Vladimir Putin before correcting himself at the NATO summit in Washington.

"And now I want to hand it over to the president of Ukraine, who has as much courage as he has determination, ladies and gentlemen, President Putin," Biden said, referring to Zelenskiy.

While correcting himself about two seconds later, Biden added: "President Putin, you're going to beat President Putin, President Zelenskiy. I am so focused on beating Putin."

The room at the summit gasped when Biden misidentified Zelenskiy as Putin. The comments came at an event in the summit during which Biden launched an initiative with allies aimed at supporting Ukraine's security needs.

Zelenskiy responded to Biden's comments by saying, "I am better than Putin."

Biden replied: "You are a hell of a lot better," as some in the room laughed, before Zelenskiy began his own address.

Biden has been under intense scrutiny in recent days and has faced doubts, including from members and donors of his own Democratic Party, about his re-election chances after a weak and faltering performance in a debate late last month against Republican former President Donald Trump.

Biden has thus far vowed to push on with his re-election bid and refused to step aside as his party's presidential candidate, while claiming he is best positioned to beat Trump in the November elections.

German Chancellor Olaf Scholz defended Biden on Thursday after the president's mistake. Scholz said, "Slips of tongue happen, and if you always monitor everyone, you will find enough of them."

British Prime Minister Keir Starmer, in a press conference of his own, repeatedly avoided answering the question as to whether Biden was fit enough to run for the US presidency. He instead praised Biden's role in organizing and leading what he said was a successful meeting of the NATO alliance.

Later on Thursday, Biden held a solo press conference at the NATO summit, his first time facing press alone since November, in which he was asked about his gaffe. He responded by saying the NATO summit was successful under his leadership.

"Have you seen a more successful conference?" Biden said to reporters when asked about potential concerns among foreign officials about his fitness for re-election.

At the summit in Washington, NATO members have extended support to Ukraine to combat the Russian invasion that began in February 2022. The United States has been Ukraine's most important partner in military assistance during the war.

Earlier in the day, ahead of a bilateral meeting, Biden told Zelenskiy, "We will stay with you”.

 

Turkey disapproves cooperating with Israel

Turkish President Tayyip Erdogan said on Friday it is not possible for NATO to continue its partnership with the Israeli administration.

"Until comprehensive, sustainable peace is established in Palestine, attempts at cooperation with Israel within NATO will not be approved by Turkey," Erdogan said at a news conference at the NATO summit.

Turkey also continues its diplomatic efforts to end the Russia-Ukraine war, he said.

Erdogan said as well that he has instructed Turkish Foreign Minister Hakan Fidan to meet Syrian President Bashar al-Assad to start to restore relations with Syria.

Turkey will extend an invitation to Assad "any time" for possible talks to restore relations between the two neighbours, Erdogan had said on Sunday.

Regarding F-16 sales to Turkey, Erdogan said, "I talked to Mr. Biden. I will solve this problem in 3-4 weeks”.

In March, the United States Senate defeated an effort to stop a US$23 billion sale of F-16 jets and modernization kits to Turkey allowed by President Joe Biden's administration after Turkey approved Sweden joining the NATO alliance.

He also said Turkey expects solidarity from NATO allies in its fight against terrorism.

"It is not possible for us to accept the crooked relationship that some of our allies have established especially with the PYD/YPG, the extension of the terrorist organization PKK in Syria," he said.

Turkey says the YPG militia is a terrorist organization, closely tied to the Kurdistan Workers Party (PKK) militant group. Turkey's Western allies list the PKK as terrorist group, but not the YPG.

Turkey's goal is to become a permanent member, not just an observer, of the Shanghai Cooperation Organization (SCO), Erdogan also said.

The SCO is a security, political and economic club launched in 2001 by Russia and China and Central Asian states as a counterweight to Western alliances.