Sunday, 23 February 2025

Ships being rerouted to Suez Canal

Egypt's Suez Canal Authority chairman Osama Rabei said on Sunday that 47 ships have been rerouted from Cape of Good Hope to Suez Canal since the start of February, reports Reuters.

Earlier this month, Rabie said that the Red Sea crisis did not create a sustainable alternative route to the canal and that there were positive indicators for the return of stability in the region.

Houthi militants have attacked vessels in the Red Sea area since November 2023, disrupting global shipping by forcing vessels to avoid the nearby Suez Canal and reroute trade around Africa, raising shipping costs.

A point worth noting is that Houthis had decaled to target ships owned by Israel and ships carrying cargo to and from Israel. US ships came under attack after Yemeni ports and other installation came under US attack.

Egyptian President Abdel Fattah al-Sisi said in December the disruption cost Egypt around US$7 billion in less revenue from the Suez Canal in 2024.

 

Hassan Nasrallah and Iran

The massive funeral processions held for Sayyad Hassan Nasrallah in Beirut on Sunday marked the end of an era, but also the beginning of a new one. Nasrallah, who led Hezbollah for over three decades, was not only the movement’s most visible figure but also a key player in regional politics, reports Tehran Times.

Born in 1960 in a Shiite community in Beirut, Hassan Nasrallah developed a strong interest in Islam and politics, influenced by Imam Musa al-Sadr. He started in the Amal movement but joined the newly formed Hezbollah in 1982 after the Israeli invasion. His political career quickly ascended; by 1985, he was leading Hezbollah's Executive Council and joined the Shura Council. His frequent visits to Iran strengthened the alliance between Hezbollah and Iran under the Wilayat al-Faqih doctrine. 

A turning point came in 1992, when Abbas Mussawi, Hezbollah’s then-Secretary General, was assassinated in an Israeli airstrike. Nasrallah, his closest confidant, took over the movement’s leadership and adopted a more uncompromising stance toward Israel.

During Mussawi’s funeral, he delivered a speech that would define Hezbollah’s trajectory, “We will continue on this path... even if we are martyred, even if our homes are destroyed over our heads, we will not abandon the choice of Islamic Resistance.”

From that moment on, his rhetoric left no room for ambiguity. Under his leadership, Hezbollah expanded its military capabilities, increased its influence in Lebanese politics, and strengthened its alliance with Iran.

The group’s ties with Tehran were not only ideological but also operational. Nasrallah’s longstanding relationship with Tehran shaped the group’s strategy and solidified its position as a major force in West Asia. 

Despite its close ties to Tehran, Hezbollah was never merely an extension of Iranian policy in the region. The notion that the movement operates as a proxy without autonomy has been challenged both inside and outside Lebanon.

The historical connection between Lebanese Shiites and Iran dates back centuries—long before Hezbollah’s creation in the 1980s.

In the 16th century, the Safavid dynasty invited Shiite clerics from the Lebanese region of Jabal Amil to help consolidate Twelver Shiism in Iran. Over the following centuries, thousands of Lebanese students traveled to Qom to study in Islamic seminaries, forging deep familial and political ties with the Iranian Shiite community. This interconnection grew stronger in the 20th century, when figures like Imam Musa al-Sadr and Mustafa Chamran played key roles in reshaping Shiite political identity in Lebanon.

Nasrallah himself consistently rejected the idea that Hezbollah was merely an artificial creation of Iran. He noted that the movement emerged organically as a response to the 1982 Israeli invasion. Nevertheless, he openly acknowledged the influence of the Islamic Revolution and Hezbollah’s alignment with the principles of Wilayat al-Faqih.

Beyond logistics and religious affinities, what binds Hezbollah and Iran is a shared political vision. Both see resistance to Western influence as a matter of survival.

Abdallah Safieddine, Hezbollah’s representative in Iran, once stated, “What unites us is our adherence to the principles of Wilayat al-Faqih, as well as our struggle against common enemies.”

Similarly, in a 2018 speech, Nasrallah made it clear that what binds Hezbollah and Iran is not military support, but a shared political vision.

“Westerners do not believe in things like ideology. Their biggest mistake is considering the Resistance merely as Iranian mercenaries,” he stated. According to Hezbollah’s leader, the West fails to understand that the Resistance does not operate under a logic of subordination but rather one of ideological harmony.

Nasrallah, who studied in the Shiite holy city of Najaf, Iraq, had long held the belief that the world is locked in a constant struggle between the oppressed (mostazafin) and the oppressors (mostakberin). When Hezbollah published its founding manifesto in 1985, the defense of the oppressed against the oppressors was one of its fundamental principles.

From this perspective, the relationship between Hezbollah and Iran is not based on a patron-client dynamic – as the West likes to portray – but on a political convergence. The concept of Wilayat al-Faqih—the authority of the leader of the Islamic revolution over the community—extends beyond the framework of the nation-state. For followers of this doctrine, Iran is not merely a country but the epicenter of an Islamic political-revolutionary project intended to serve as a model for the entire umma (Muslim community). This is why Ayatollah Seyyed Ali Khamenei is not seen solely as Iran’s leader but as a political authority beyond its borders.

Nasrallah has repeatedly asserted that Hezbollah does not operate under Tehran’s directives, “Alliance does not mean obedience. It does not mean that when one party makes a decision, others follow without questioning its motivations. That would be coercion, not alliance.” This independence is crucial to understanding the dynamics between both actors.

One of the most revealing episodes of this autonomy occurred during the Syrian war. According to Esmail Kowsari, a parliamentarian and member of Iran’s Islamic Revolution Guard Corps (IRGC), it was Hezbollah that told Iran the two countries needed to enter the fight against Daesh terrorists.

Iranian General Hossein Hamedani confirmed in his memoirs that Nasrallah orchestrated the Resistance’s strategy in Syria and that even operations involving the IRGC were designed by Hezbollah.

Furthermore, various estimates suggest that even if Iran were to withdraw its support, Hezbollah could continue to operate independently. This demonstrates that the movement has built a self-sustaining structure and a financial network that extends beyond Iranian backing.

Labeling Hezbollah as a mere extension is reductive. The group is not simply an arm of Iran’s policies but an actor with its own decision-making and operational capabilities. Their relationship is better described as symbiotic, while they share strategic objectives and a common worldview, Hezbollah maintains autonomy in its decision-making.

The funeral of Nasrallah and Hashem Safi al-Din was not only a farewell for the Hezbollah leaders but also a politically significant event. It marked a pivotal moment for the Resistance in Lebanon amid escalating tensions with Israel.

It will provide an opportunity for the Lebanese people to demonstrate unity in an increasingly complex regional landscape. The message is clear: the Resistance remains steadfast and will not yield to external pressures.

At the funeral ceremony on Sunday, Hezbollah's fourth secretary-general, Sheikh Naim Qassem, repeated remarks previously delivered by Nasrallah 32 years ago at his predecessor's funeral. “Resistance has not ended. A new era of Resistance has just begun,” he said to a sea of mourners.

 

Pakistan: Torkham crossing remains closed

According to Saudi Gazette, Pakistani and Afghani border forces remained on high alert on Sunday as the Torkham crossing, a key trade and transit route between the two countries, remained shut for a second consecutive day following a dispute over the construction of a new checkpoint.

The border closure has halted all trade and passenger movement between Pakistan’s Khyber Pakhtunkhwa province and Afghanistan’s Nangarhar province.

“Torkham border remains closed for all types of passenger and trade vehicles movement, and security forces on both sides are on alert,” a Pakistani security official stationed at the crossing told Anadolu.

No border flag meeting or communication committee talks have been scheduled to resolve the standoff, though efforts are reportedly underway to arrange discussions between officials.

The Torkham border is one of 18 crossings between Pakistan and Afghanistan, where decades of territorial disputes have led to frequent closures, disrupting trade and travel.

Tensions between the two countries have escalated since November 2023, when Pakistan launched a crackdown on illegal foreigners, mostly targeting Afghan refugees, and initiated their forced deportation.

Islamabad has also accused Afghanistan-based militants linked to the outlawed Tehreek-e-Taliban Pakistan (TTP) of carrying out cross-border attacks, claiming that the Taliban government in Kabul has failed to act against them—an allegation the Taliban denies.

In December 2024, the Pakistani military launched airstrikes in Afghanistan’s Paktika province, marking the second such cross-border military operation since March 2024.

The Afghan Taliban claimed that Pakistani jets killed 46 civilians, including women and children, while Islamabad denied that civilians were targeted. 

 

Saturday, 22 February 2025

Pakistan an important neighbor of Iran

Iranian Vice President for Strategic Affairs Mohammad Javad Zarif held a cordial meeting with Pakistan’s ambassador in Tehran, Muhammad Mudassir Tipu.

The two officials discussed the expansion of ties in various fields, including economy, security, and military domains. Cultural exchanges and the need to further increase them was another focus of discussions. 

“Pakistan is an important neighbor of Iran. This means that we should do our best to further enhance our ties,” Zarif said to the envoy.

The Iranian official who served as the country’s foreign minister for 8 years in the 2010s, traveled to Pakistan multiple times during his long tenure as a diplomat. 

For his part, Tipu briefed Zarif on the current state of bilateral ties, and reciprocated sentiments about the importance of enhanced cooperation between the two historically friendly countries. 

Iran and Pakistan have taken multiple steps to increase cooperation in recent years. Notably, a massive border market was inaugurated in 2023 by the leaders of the two countries.

Security collaboration has also become extremely significant, with the two nations facing similar threats posed by terrorists and smugglers.

 

Germany: Fragmented Political Landscape

Germans vote in a national election on Sunday which is expected to see Friedrich Merz's conservatives regain power and the far-right Alternative for Germany (AfD) score its best ever result as Europe's ailing economic powerhouse lurches rightwards, reports Reuters.

Merz's CDU/CSU bloc has consistently led polls but is unlikely to win a majority given Germany's fragmented political landscape, forcing it to sound out coalition partners.

Those negotiations are expected to be tricky after a campaign which exposed sharp divisions over migration and how to deal with the AfD in a country where far-right politics carries a particularly strong stigma due to its Nazi past.

That could leave unpopular Chancellor Olaf Scholz in a caretaker role for months, delaying urgently needed policies to revive Europe's largest economy after two consecutive years of contraction and as companies struggle against global rivals.

It would also create a leadership vacuum in the heart of Europe as it deals with a host of challenges, including US President Donald Trump's threats of a trade war and attempts to fast-track a ceasefire deal for Ukraine without European involvement.

Germany, which has an export-oriented economy and long relied on the US for its security, is particularly vulnerable.

Germans are more pessimistic about their living standards now than at any time since the financial crisis in 2008.

EU allies are cautiously hopeful the elections might deliver a more coherent government able to help drive forward policy at home and in the bloc.

Some also hope Merz will reform the "debt brake," a constitutional mechanism to limit government borrowing that critics say has strangled new investment.

The most likely outcome of this election, say analysts, is a tie-up of Merz's conservative bloc of Christian Democrats (CDU) and Christian Social Union (CSU) with the SPD, which is polling in third place in another uneasy "grand coalition".

"A lot of my friends are likely going to vote for the conservatives because this government didn't work so well and Merz's international standing is quite good," said Mike Zeller, 26, a civil servant.

"I just hope enough parties agree to a government so they can leave the AfD out."

 

 

 

Iran: Zolfaqar 1403 Joint Military Exercise

Iran commenced the large-scale Zolfaqar 1403 Joint Military Exercise on Saturday, spanning the Makran coasts, the Sea of Oman, and the northern Indian Ocean up to the 10-degree latitude.

Rear Admiral Habibollah Sayyari, overseeing the maneuvers, stated the exercise aims to bolster Iran's defensive capabilities and deterrent power against potential threats.

Speaking at a press conference on Friday, Rear Admiral Sayyari said, "As part of the annual military exercises of the Islamic Republic of Iran, the main phase of the Zolfaqar 1403 joint exercise will commence tomorrow..."

The exercise, operating under the slogan "Sustainable Security and Power," will involve elements from the Ground Forces, Air Defense Forces, Air Force, and the Strategic Navy of the Islamic Republic of Iran, along with the Joint Air Defense Headquarters of Khatam al-Anbiya.

Rear Admiral Sayyari emphasized the deterrent nature of the drill, stating, "The purpose of conducting this exercise is to enhance the defensive capabilities and deterrent power of the sacred Islamic Republic of Iran against any land, air, or sea threats. Any enemy that thinks it can harm our territorial integrity or our interests on land, in the air, or at sea will certainly know that it will suffer significant consequences."

The exercise will serve as a testing ground for new military tactics and weaponry, including the evaluation of "new, smart, precise, and guided munitions, as well as various types of missiles."

The Zolfaqar 1403 exercise follows almost two months of nationwide military drills involving various units of the Armed Forces. The Islamic Revolution Guard Corps (IRGC) Ground Force recently concluded the second round of its own maneuvers in Iran’s southwestern regions, where forces practiced fending off a potential attack in the Persian Gulf, while also unveiling various new drones, missiles, and defense systems.

 

 

PSX records modestly positive activities

Pakistan Stock Exchange (PSX) witnessed a modestly positive week, with the benchmark KSE-100 index gaining 716 points or 0.64%WoW, to close at 112,801 points on Friday, February 21, 2025. Market activity was largely driven by ongoing announcements of corporate results, particularly better than expected earnings by the cement companies.

The authorities' stance against imposing new taxes ahead of the upcoming IMF review boosted investor confidence, with expectations of smooth review process, expected next month.

On the macro front, foreign direct investment (FDI) surged by 56%YoY to US$1.5 billion in 7MFY25, primarily due to higher inflows from China into the power sector, especially Hydel projects.

Current account posted a deficit of US$420 million in January 2025 after three months of surplus, driven by 17%YoY increase in imports. However, the 7MFY25 balance remained in surplus at US$682 million.

Yields in the latest auction rose by 3 to 17bps, with 3-month yield on T-bills climbing to 11.82%.

Large-Scale Manufacturing (LSM) index declined by 1.87%YoY in 1HFY25, primarily due to a slowdown in construction-related sectors.

Market participation also improved, with average daily traded volume increasing by 14%WoW to 590 million shares, from 519 million shares a week ago.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$35 million to US$11.20 billion as of February 14, 2025.

Other major news flow during the week included: 1) IMF and Pakistan to discuss US$1bn climate finance talks next week, 2) overseas investors repatriate US$1.3 billion during first seven months of the current financial years, 3) IFC announces to invest US$2 billion annually in Pakistan’s infrastructure, 4) textile exports increased by 11%YoY in seven months, and 5) GoP decides to deregulate fuel prices and auction offshore blocks.

Glass ceramics, Jute, and textile spinning were amongst the top performing sectors, while Transport, Pharmaceuticals, and Close-end mutual funds reported were the laggards.

Major selling was recorded by Mutual Funds and Foreigners with a net sell of US$8.6 million and US$5.1 million, respectively. Insurance companies, Individuals, and Companies absorbed most of the selling with an aggregate buy of US$14 million.

Top performing scrips of the week were: BOP, FCCL, KTML, TGL, and DGKC, while laggards included: SAZEW, MEHT, SEARL, TRG, and ABOT.

According to AKD Securities market outlook remains positive, with the KSE-100 expected to be influenced by corporate earnings announcements, which could set the tone for sector-specific movements.

Any developments regarding the upcoming IMF review or the US$1.0 billion climate financing by IMF could further trigger positive momentum. Over the medium term, the KSE-100 is anticipated to sustain its upward trajectory, primarily driven by strong earnings in fertilizers, sustained ROEs in banks, and improving cash flows of E&Ps and OMCs, benefiting from falling interest rates and economic stability.