Iranian leader defends strikes on Israel

Iran's missile strikes on Israel were "correct, logical, and lawful", Ayatollah Ali Khamenei told a vast crowd that had gathered to hear him speak in Tehran on Friday.

The supreme leader described the attack as the "minimum punishment" for what he called Israel's "astonishing crimes" while leading Friday prayers in the capital, something he has not done since 2020.

Khamenei's speech came three days after Iran fired nearly 200 missiles at Israel, in what it said was retaliation for the assassination of Hezbollah’s leader, Hassan Nasrallah.

The Farsi-speaking supreme leader delivered part of his speech in Arabic.

During his sermon, Khamenei praised Nasrallah and voiced support for Hamas and Hezbollah, which he said provided "vital service to the entire region and the entire Islamic world".

He said Iran-aligned armed groups "will not back down" in their conflict with Israel, which entered a new phase after Hamas raided Israel almost one year ago.

Iran is the main supporter of Hezbollah and Hamas, as well as other armed groups around the Middle East which have attacked Israel. They often dub themselves the "Axis of Resistance".

In recent weeks, several senior leaders of Iran-backed groups and Iran's powerful military wing, the Revolutionary Guards, have been killed in Israeli strikes or presumed Israeli assassinations.

The supreme leader's appearance in front of a crowd of tens of thousands in Tehran is a sign of the gravity of the moment for the Iranian regime, which is facing widespread domestic discontent.

It could be read as an attempt to show strength and restore Iran’s credibility as leader of the “Axis of Resistance”.

The public appearance was also intended to show that Khamenei is not in hiding, after reports emerged that he had been taken to a secure location following Nasrallah's assassination.

The Grand Mosalla Mosque was flooded with people after Iranians were given free transport to attend the sermon. A large Palestinian flag was seen in the crowd. Khamenei holds ultimate power in Iran, but very rarely leads Friday prayers himself.

The last time he did was in 2020, after the US killed Iran's most senior military commander, Qassem Soleimani. The time before that was in 2012.

Iran is still reeling from the loss of its allies Nasrallah and Hamas's political leader Ismail Haniyeh, who was assassinated in Tehran in July.

Israel is widely considered to be behind Haniyeh's killing, though it has never commented on his death.

Khamenei also told the crowd that Iran would retaliate if, as expected, Israel launched a response to Tuesday's missile attack.

"If we needed to do that again, we would do it again in the future," Khamenei told supporters.

On Thursday, US President Joe Biden suggested a possible Israeli strike on Iran's oil infrastructure had been discussed, as Israel continued to weigh up how to strike back at Tehran.

Courtesy: Saudi Gazette

PSX benchmark index up 2.76%WoW

Pakistan Stock Exchange (PSX) continued its bullish momentum throughout the week ended on October 04 2024. With expectation of further interest rate cut and IMF’s EFF approval the benchmark KSE-100 index gained 2,240 points or 2.76%WoW to close at 83,532 points.

Overall, the bullish sentiments were driven by high dividend yielding sectors that included Fertilizers and E&P, as falling fixed-income yields led to a rerating of these sectors.

CPI dropped down 6.93%YoY in September 2024 since January 2021. Additionally, in the auction held on October 02, the yields for the 6-month and 12-month T-Bills decreased by 334 and 326 bps, respectively.

Trade balance for September 2024 posted US$1.78 billion deficit.

OMCs’ aggregate offtakes were reported at 1.27 million tons in September 2024, up 20%YoY

As against this cement offtakes for September 2024 were reported at 3.67 million tons, down 5%YoY, largely due to subdued domestic demand amid economic slowdown and higher constructions costs.

Average daily trading volume declined 12.1%WoW to 342.3 million shares, from 389.4 million shares traded a week ago.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$1.2 billion WoW after the receipt of first trance from the IMF to US$10.7 billion as of September 27, 2024.

The PKR largely remained stable against the greenback throughout the week, closing the week at PKR 277.52 to a US$.

Other major news flow during the week included: 1) Pakistan and Russia ink barter deal to boost agri trade 2) Refineries demand action on key issues before upgrades, 3) Pakistan and Malaysia pledge to deepen ties, 4) IPPs talk status remains under wraps and 5) the GoP buys back PKR351 billion treasury bills.

Textile Spinning, Leather & Tanneries, Oil & Gas Exploration Companies, Fertilizer and Tobacco were amongst the top performers, on the other hand, Modarbas, Vanaspati & Allied Industries, Close-End Mutual Funds, Woollen & Inv. Banks/ Inv. Cos/Securities Cos. were amongst the worst performers.

Major net selling was recorded by Foreigners with a net sell of US$26.1 million. Mutual Funds absorbed most of the selling with a net buy of US$26.1 million.

Top performing scrips of the week were: AIRLINK, NCPL, PKGP, PPL, and FFC, while laggards included: TRG, FHAM, INIL, EPCL, and EFUG.

According to AKD Securities, following the approval of the IMF’s executive board and the subsequent receipt of the first tranche of US$1.02bn, market sentiments are poised for improvement.

Additionally, easing inflation with September 2024 CPI reported at 6.93%YoY, coupled with ongoing monetary easing, is expected to keep equities in focus, with the market trading at an attractive P/E of 3.6x and a DY of 13.1%.

The brokerage house recommends the sectors benefiting from monetary easing and structural reforms, particularly high dividend yielding stocks, which are expected to rerate as yields align with fixed income returns. 

Message for Biden, No War with Iran

The day President Joe Biden said his administration and Israeli leaders were discussing an attack on Iranian oil infrastructure, a coalition of over 80 advocacy groups implored the US leader to halt Israel's march toward regional war.

The National Iranian-American Council (NIAC) led the groups in a letter to Biden asserted that it is not in the national interest for the US to be led into a war with Iran by Israeli Prime Minister Benjamin Netanyahu’s far-right government.

The letter's signatories include Just Foreign Policy, Friends Committee on National Legislation, IfNotNow, US Campaign for Palestinian Rights, CodePink, Peace Action, and the Quincy Institute for Responsible Statecraft.

"The primary ask behind this letter is that the Biden administration utilize the significant leverage it has to rein in Netanyahu as he continues to proceed with a consistently failed 'de-escalation through escalation' approach throughout the region that has cost countless civilian lives," NIAC explained.

As stated in the letter, "It is in the strong national interest to utilize diplomacy, backed by full American leverage—including withholding further offensive weapons transfers to Israel's military—to move all the parties back from the brink and toward a cease-fire that ends the devastation of Gaza and Lebanon and reverses the slide to regional war."

"Moreover, we urge you to recognize and respect that Congress has not authorized military force against Iran or militias backed by Iran, and that any potential military action against Iran could only proceed following a debate and passage of a war authorization before entering our troops into any imminent hostilities in the region," the groups continued.

"President Biden has recently spoken of steps he has taken to wind down America's military footprint abroad," the letter adds. "However, unless he acts quickly and decisively through diplomacy, it appears that a new endless war will be his legacy."

The US provides Israel with billions of dollars worth of armed aid and diplomatic cover for its yearlong war on Gaza, which has killed or wounded more than 148,000 Palestinians and is the subject of an International Court of Justice genocide case.

Fears of a full-blown regional war have mounted recently as Israel escalates hostilities by assassinating Hamas and Hezbollah leaders in Tehran and Beirut and as Israeli forces invade southern Lebanon accompanied by a bombing campaign that has left thousands of Lebanese dead and wounded.

Hezbollah, the Lebanon-based political and paramilitary group, has been engaged in limited cross-border projectile attacks on Israel in solidarity with Gaza, resulting in scores of deaths and injuries.

"The wars in the Middle East are just getting more and more dangerous, not only with Lebanon, but now with Iran," CodePink co-founder Medea Benjamin said Wednesday in a video urging Americans to call their members of Congress to demand peace. "Netanyahu has been trying to drag the US into a war with Iran for years, and unfortunately, there are many members in this Congress... who are all too eager to go along with him."

Benjamin highlighted remarks by US lawmakers including Rep. Jared Moskowitz (D-Fla.) who said Tuesday that attacks on Iranian nuclear facilities are "fair game."

"Let's remember it's Israel that has nuclear weapons, not Iran," said Benjamin, who added that attacking Iran would encourage Tehran's allies "to strike US soldiers in the region."

Benjamin also noted Sen. Robert Wicker's (R-Miss.) call for regime change in Tehran—one of the latest in a long line of such calls over the past 45 years—and admonished US officials for "forgetting the disastrous attempts of regime change that the US did recently in Iraq, in Libya, in Afghanistan," and that "the present government in Iran is there precisely because of the US overthrowing their democratically elected government in 1953."

"We want to live in peace," Benjamin added. "We want to stop supporting the genocide that Israel is carrying out... We don't want any more weapons sent to the region... We the American people don't want war with Iran. We want to live in peace."

 

Courtesy: Common Dreams

Iran’s Missile Assault on Israel, US perspective

Iran launched at least 180 ballistic missiles at Israel in a massive two-wave assault on October 01, 2024. Millions of civilians sought protection in bomb shelters. The risk of a regional war mounted as Jerusalem pledged retaliation.

Iran “made a big mistake – and it will pay for it,” warned Israeli Prime Minister Benjamin Netanyahu. “We will keep to the rule we have determined: Whoever attacks us – we attack them.” US National Security Advisor Jake Sullivan said that there would be “severe consequences” for Iran’s “significant escalation.”

Iran’s second direct attack on Israel in five months was retaliation for Israel’s killing of three men:

·         Ismail Haniyeh, the Hamas political chief who was killed on July 31 in Tehran

·         Hassan Nasrallah, the Hezbollah leader who was killed on September 27 in Beirut

·         Brig. Gen. Seyyed Abbas Nilforoushan, the Islamic Revolutionary Guard Corps (IRGC) commander who was killed in the same airstrike in Beirut

Reportedly, most of the Iranian missiles were intercepted by Israeli forces or US Navy destroyers or landed in open areas.

Israel’s layered air defenses include the Arrow 2 and Arrow 3, which are designed to intercept ballistic missiles. 

Jordanian forces also downed missiles.

Several missiles impacted in central and southern Israel but caused minimal damage. Two Israelis were slightly injured by shrapnel in Tel Aviv. But no Israeli fatalities were reported. One Palestinian civilian in the West Bank city of Jericho was also killed.

Iran’s primary targets appeared to be the headquarters of the Mossad spy agency in Tel Aviv, Tel Nof Air base in central Israel, and Nevatim Air Base in the southern Negev Desert, which houses advanced F-35 warplanes.

Iran said that Hatzerim Air Base in the Negev Desert was also a target. Some of the bases were hit, but no aircraft, munitions or critical infrastructure were damaged.

The attack “appears to have been defeated and ineffective, and this is testament to Israeli military capability and US military,” President Joe Biden told reporters on October 01.

Iranian officials claimed that the attack, dubbed Operation True Promise 2, was a resounding success. The IRGC said that 90 percent of the missiles hit their targets.

President Masoud Pezeshkian boasted that Israel’s air defenses were “more fragile than glass” and vowed a “more crushing response” to any retaliation.

Iran’s mission to the United Nations said that the assault was a “legal, rational, and legitimate response” to what it labeled as “terrorist attacks” by Israel. Iranians gathered to show their support for the armed forces on October 01 and 02 in Tehran and in the provinces.

The attack, dubbed Operation True Promise 2, appeared to be Iran’s attempt to establish deterrence against Israeli attacks on its territory as well as its allies in the so-called “Axis of Resistance.”

The death of Nasrallah following devastating strikes on Hezbollah commanders, weapons and infrastructure was a huge blow to Iran’s longstanding “forward defense” doctrine.

For decades, the Islamic Republic has relied on its militia allies across the Middle East to pressure Israel and deter strikes on Iranian soil. Hezbollah — sitting on Israel’s northern border with an arsenal of rockets, missiles and drones — was the centerpiece of this strategy.

Operation True Promise 2 was a follow-on to Tehran’s April 13-14 unprecedented assault on Israel, Operation True Promise.

The first attack was retaliation for Israel’s April 01 airstrike on Iran’s diplomatic mission in Damascus that killed three Revolutionary Guards generals as well as other military officials.

The October attack was approximately twice the size of the April assault in terms of scope, according to an initial Pentagon assessment.

Iran also exclusively fired ballistic missiles, including advanced Fattah-1 and Kheibar Sheykan models, which can travel to Israel within 12 minutes and are difficult to intercept.

The April attack included a wider variety of weapons but was easier for Israel to repel.

Iran launched 170 suicide drones, more than 120 ballistic missiles, including older types, and more than 30 cruise missiles.

Israel reported that 99 percent of the weapons were shot down or intercepted before even reaching Israel, with help from US, Jordanian and other unnamed regional players.

Cruise missiles, which take some two hours to reach Israel, and drones, which can take up to nine hours to reach Israel, are easier to shoot down and allow more time for defensive preparations.

Israel retaliated on April 19 with a strike that was calibrated to avoid further escalation but also send Iran a clear message.

Israeli warplanes, from outside of Iranian airspace, reportedly fired three missiles at an air defense radar system, part of the security umbrella over the Natanz nuclear facility. Not only did the missiles damage the target, they went undetected.

Courtesy: US Institute of Peace

 

Israel bans UN chief in row over Iran

The Secretary General of the United Nations, António Guterres, has been banned from entering Israel over his response to Iran's ballistic missile bombardment.

In a statement, Israel's Foreign Minister Israel Katz called Guterres an "anti-Israel secretary general who lends support to terrorists".

Writing on social media site X, formerly Twitter, after Iran fired about 180 missiles into Israel, Guterres said he condemned "the broadening of the Middle East conflict with escalation after escalation" and said these "must stop".

He said the region "absolutely" needed a ceasefire, but did not specifically mention the Iran attack.

In a statement on Wednesday, Katz declared the UN secretary general persona non grata, saying that anyone who "cannot unequivocally condemn Iran's heinous attack on Israel does not deserve to step foot on Israeli soil".

He specifically criticized Guterres for "his anti-Israel policy since the beginning of the war".

Tuesday's attack by Iran is the latest in a series of escalations, starting almost a year ago with attacks on Israel by Hamas, and recently involving increased fighting between Iran-backed Hezbollah and Israel.

Israel launched a military campaign in Gaza in response to the unprecedented attack on southern Israel on October 07, 2023 by Hamas gunmen, during which about 1,200 people were killed and 251 taken hostage

Since the attack, a military campaign in Gaza has now killed a total of 41,689 people, according to the Hamas-run health ministry.

Over the course of the conflict, there have been a number of clashes between Israel and the United Nations about the situation in Gaza and the West Bank.

There has also been friction between Israel and the UN over the role of the UN agency for Palestinian refugees, UNRWA.

In January 2024, Israel alleged that a number of the agency's staff members had been involved in the October 07 attacks.

In response to this, the agency launched an investigation - with a number of its international funders withdrawing support for it, before later reinstating it. In August, nine staff members were dismissed over potential involvement in the attacks.

During the conflict, UNRWA has criticized Israel for air strikes in Gaza which have killed its staff members.

Pakistan: Digitalization and Economic Development

Governor, State Bank of Pakistan, Jameel Ahmad has stated that rapid technological change has not only enabled banks to offer innovative financial services to customers but also empowered regulators to ensure compliance effectively and efficiently through advanced data collection and processing capabilities. He stated this in his keynote address at the 13th Bank of The Future Forum, focusing on the critical theme of ‘The Future of Banking’. The event, organized by Systems Limited, brought together distinguished dignitaries, eminent industry leaders, and fintech experts to discuss the evolving landscape of the banking sector in Pakistan and globally.

The Governor’s address covered many themes and underscored the SBP’s commitment to fostering innovation and digitalization within the banking sector, paving the way for a dynamic financial sector in Pakistan. The Governor shared the SBP’s digital transformation started in 2002, when SBP implemented the Temenos Banking System, and an ERP system for non-banking transactions, as well as a data warehouse for massive data-related requirements. In 2008, SBP implemented the Real-Time Gross Settlement System called PRISM for processing wholesale, large-value, institutional payments. Recently, SBP established its state-of-the-art, Tier-3 data center, the first of its kind in Pakistan.

The Governor shared that in 2008, SBP issued regulations for branchless banking services to enable the delivery of basic banking services from retail stores and kiryana shops. This initiative has resulted in a significant increase in the number of unique bank accounts, from 16% of the adult population in 2018 to 64% in 2024. He shared that in 2022, SBP issued the framework for establishing Digital Banks in Pakistan to further facilitate the entry of IT-enabled, non-banking entities into the financial services industry. As a result, in principle approvals were issued to five applicants who will shortly start pilot operations in the country.

The Governor shared that in line with international trends, SBP started working on transforming its retail payments industry by implementing the state-of-the-art ISO-20022 payment standard. Hence, Raast, our instant payment system based on the ISO 20022 standard, was launched in 2021. In a short span of almost three years, Raast has processed around 850 million transactions valuing over PKR 19 trillion. Today, with 38 million unique Raast IDs, the system processes an average of 2.5 million transactions a day. He shared that SBP is also working on integrating Raast with the Arab Monetary Fund’s instant payment system called Buna to facilitate millions of Pakistanis living in Arab countries in sending their remittances to Pakistan with ease and convenience.

The Governor shared that as a result of SBP’s efforts, today in Pakistan, we have around 59 million branchless banking wallets, 19 million mobile banking apps, another 3.7 million e-money wallets, and 12 million internet banking users. Since 2020, the overall number of retail transactions processed digitally has increased by 30%, and the share of digital payments in total retail payments by volume has risen from 76% in FY23 to 84% in FY24. The number of transactions processed using mobile and internet banking is growing at an annual rate of 70% and 30%, respectively. This is not surprising as the majority of our population is young and adept at using mobile apps.

The Governor shared that it is heartening to see the emergence of a vibrant fintech sector in Pakistan. These fintechs are striving hard to identify new markets and use cases and offer their tech-enabled services. He encouraged the IT sector to play a pivotal role in this transformation.

Israel with US fends off massive Iranian attack

Iran fired more than 180 missiles at Israel in retaliation for Israeli attacks that killed Hamas leader Ismail Haniyeh in July and Hezbollah chief Hassan Nasrallah last week.

White House national security adviser Jake Sullivan told reporters on Tuesday that the attack "appears to have been defeated and ineffective." 

"We do not know of any deaths in Israel," he said. "We do not know of any damage to aircraft or strategic military assets in Israel."

Pentagon press secretary Maj. Gen. Pat Ryder said at a briefing after the attack that Israel was able to intercept the majority of the incoming missiles and that there was minimal damage on the ground.

Ryder added that two US Navy destroyers helped shoot down the missiles, and fired around a dozen interceptors. 

The attack marked a significant escalation in the conflict between Israel and Iran, Ryder and Sullivan said.

Tehran previously attacked Israel in April in an attack defeated by the US and Israel, along with allied forces in the region.

Israeli military spokesperson Rear Adm. Daniel Hagari said there were a "small number" of hits in central and southern Israel, but the "majority of the incoming missiles were intercepted."

"Iran's attack is a severe and dangerous escalation. There will be consequences," he said in a video address. "We will respond wherever, whenever, and however we choose."

Vice President Harris, the Democratic presidential nominee, told reporters "I condemn this attack unequivocally."

"I'm clear eyed. Iran is a destabilizing, dangerous force in the Middle East, and today's attack on Israel only further demonstrates that fact," she said.

The Iranian attack comes after Israel began limited ground operations in Lebanon against the Iranian-backed Hezbollah militant group, which has been severely degraded by Israeli attacks in the past two months, including a strike last week that killed Nasrallah.

 

Israel has fought Hezbollah for nearly a year after the militant group began firing over the border following the October 07, 2023 attacks by Iranian-backed militant group Hamas, which sparked war in the Gaza Strip.

While the war in Gaza is still raging, Hamas's presence has been reduced over the past year, freeing up resources for Israel to move north and try to push Hezbollah back from the border to return some 60,000 residents displaced by the fighting there.

The US has pushed for a diplomatic agreement to resolve the Lebanon crisis, but Ryder indicated the Pentagon supported limited Israeli border attacks, saying the US "fully understands" the need to protect civilians, though Washington is asking questions about the operation.

Before the Tuesday attack, Israeli Prime Minister Benjamin Netanyahu on Monday appealed directly to Iranians, saying in a video message he supported efforts for regime change in Iran.

After the attack, Netanyahu said at a Security Cabinet meeting that Israel has the momentum and the axis of evil is in retreat, referring to Iran.

"This evening, " he said, "Iran made a big mistake – and it will pay for it."