South Asia: More of a meow than a roar

In the bubble years of the late 1980s, the appreciation of the Japanese yen sent a flood of investment from corporate Japan to the fast-growing economies of Southeast Asia. That was before the rise of China as a manufacturing powerhouse in the 1990s. But today, the optimism accompanying China's ascent has waned ‑ China is more likely to compete with ASEAN economies than support them.

According to Nikkei Asia, such diverse national circumstances suggest that, sadly, Southeast Asia remains less than the sum of its parts -- its once-promising Tiger economies have mostly lost their roar.

Nowhere is this reversal in ASEAN's economic fortunes more apparent than in Thailand, where auto sales have collapsed. Indonesia, which has vast natural and mineral resources, should also be doing better than it is.

While Vietnam is struggling in finding enough workers, not all of Southeast Asia has lost its "Tiger" dynamism.

Laos sells hydropower to its neighbors at a time when cheap power is an increasingly valuable competitive advantage.

Malaysia has benefited from its proximity to Singapore.

Lebanon: Saad Hariri’s promising return

In February 2005, the young man, Saad Hariri, who was grieving the loss of his father, Rafik Hariri was not knowledgeable enough in the muzzy maze of Lebanese politics; by capitalizing on his experiences, he has now reemerged seriously to lead the Sunni public and is approaching his fellow compatriots.

Upon Hariri’s instructions, Martyrs Square in the center of Beirut was overcrowded with his supporters who waved the national flag without the Future Movement’s flag, the largest Sunni movement.

“I will remain with you. Everything will be fine in its time,” he said, hinting at his intention to contest the municipal elections scheduled for May 2025 and the parliamentary elections in May 2026.

“I bow before all the martyrs from our people in the South, the Bekaa, Beirut, the southern suburb and all the regions,” Hariri said, describing the recent US-backed Israeli war on Lebanon as “crazy and criminal” targeting “our country”. 

He said, “It killed our people. It destroyed their homes, institutions, crops and society.”

Hariri’s rational speech has foiled the relentless efforts to put Sunnis and Shiites against each other; he also praised his popular base’s solidarity with the displaced as they confirmed – in action and not in words – that “Lebanon is one and the Lebanese are one body.” 

During the recent September-October 2024 Israeli war on Lebanon, the mainstream Arab media refused to say how those Sunnis welcomed the displaced Shiites in their own homes. Instead, they repeated the claim driven by Israel’s secretive cyber warfare unit 8200 that Hezbollah was involved in the assassination of his Prime Minister Rafik Hariri. 

Further, Hariri pointed to the responsibility of rebuilding the destroyed areas. “This is everyone’s responsibility, just as it is their responsibility to solve the economic crisis and restore development in all regions. Today, after electing a new president and a prime minister, we have a golden opportunity,” he stressed.

Hariri addressed his “partner”, the Shiite duo, without explicitly naming it, saying: “You are partners in this opportunity, and without you it cannot be achieved.”

“You are partners in opening bridges of relations with our Arab brothers and partners in reconstruction. Most importantly, you are strong partners in restoring the prestige of the state, which alone, with its army, security forces and institutions, protects all Lebanese,” he maintained.

Saad Hariri, who served as the prime minister of Lebanon from 2009 to 2011 and 2016 to 2020, added, “We are with the state and our national army. We support every effort they make to impose the implementation of the ceasefire and Resolution 1701 in full, with the withdrawal of the Israeli occupation from all the villages it still occupies.”

Besides, Hariri announced his support for the choices of the Syrian people and his rejection of the settlement of Palestinian refugees.

Since Hariri’s absence, the active role of the Sunni component has declined in favor of rogues selected and oriented by the US embassy in Beirut and suspicious NGOs funded by George Soros.

Those have neither a popular base nor a comprehensive national discourse that is keen on Lebanon’s sovereignty, which contributed to the dispersion of the Sunnis as reflected during the formation of the current government, as Nawaf Salam was imposed from the outside and does not represent the Sunnis’ national agenda.

Relentlessly, those pro-US renegades have spared no efforts to pave the way for the decentralization of Sunni leadership, separating the premiership from the leadership of the Sunni component.

It is worth noting that 3 out of 27 Sunni MPs are affiliated with the Shiite duo. The rest are distributed among the National Consensus Bloc, headed by MP Faisal Karami, and the National Moderation Bloc, which was absent from the new government for the first time since the 1990s.

Hariri’s national speech reconfirmed that there is no victor or vanquished in Lebanon, but rather a crucible with diverse identities that requires concessions, cooperation, and thwarting the Israeli conspiracy threatening the people and the state.

Amid the sensitive situation that Lebanon is going through, activating the moderate Sunni presence is an urgent Lebanese need, given Hariri’s extensive relations both regionally and internationally. 

 

Trump policy rattles European allies

Vice President Vance and Defense Secretary Pete Hegseth on Friday made separate speeches that rattled European leaders. US officials said Europeans cannot expect American troops to be on the continent forever.

Speaking at a press conference in Warsaw, Poland, Hegseth said that US force levels in Europe are important but must be scrutinized.

"What happens five, 10, 15 years from now is part of a larger discussion that reflects the threat level, America’s posture, our needs around the globe, but most importantly the capability of European countries to step up," he said.

"That’s why our message is so stark to our European allies — now is the time to invest because you can’t make an assumption that America’s presence will last forever."

His comments come on the end of a week-long trip through Europe that included stops in Germany to visit US Africa Command and Brussels for a two-day meeting of NATO defense ministers. While at the alliance headquarters, he hinted that Europeans would have to step up conventional deterrence against Russia.

Hegseth also sparked fears as to whether the US would largely abandon investment in NATO moving forward after he expressed “that stark strategic realities prevent the United States of America from being primarily focused on the security of Europe.”

No decision has yet been made on changing US force presence in Europe, though the Trump administration has said it is reviewing where it puts troops globally.

Vance, meanwhile, in remarks at the Munich Security Conference, argued the biggest threats facing Europe were not China or Russia, but the issue of mass migration and laws that restrict free speech.

“While the Trump administration is very concerned with European security and believes we can come to a reasonable settlement between Russia and Ukraine … the threat that I worry the most about vis-à-vis Europe is not Russia, it’s not China, it’s not any other external actor,” Vance said.

“And what I worry about is the threat from within,” he continued. “The retreat of Europe from some of its most fundamental values, values shared with the United States of America.”

Vance’s remarks did not delve into the conflict in Ukraine, where the Trump administration is pushing for a ceasefire negotiation, nor did he discuss at length President Trump’s desire for Europe to commit more to defense spending.

Instead, Vance accused European officials of using laws meant to minimize misinformation and disinformation to marginalize populist voices and voters, which garnered a tepid reception in the room. 

 

Iran Hosting Caspian Economic Forum

Iran is hosting the Third Caspian Economic Forum on February 17-18, with the participation of prime ministers and ministers from Russia, Turkmenistan, Kazakhstan, and Azerbaijan, an Iranian trade official informed.

According to Iran's Trade Promotion Organization (TPO), Akbar Godari, Director General for Central Asia, the Caucasus, and Russia at the TPO, said on Wednesday that the forum aims to enhance economic, trade, scientific, and technological cooperation among Caspian littoral states. Key topics include healthcare, energy, finance, tourism, investment in free trade zones, and logistics.

Godari noted that Iran’s Trade Promotion Organization has organized seven specialized panels for the first day of the event, covering areas such as trade, industry, and agriculture (Ministry of Industry, Mine, and Trade); economic, customs, banking, and investment cooperation (Ministry of Economic Affairs and Finance); transportation, transit, and engineering services (Iran's Transport and Urban Development Ministry); environmental, health, and tourism cooperation (Department of Environment); energy collaboration, including oil, gas, electricity, and renewables (Ministry of Oil and Ministry of Energy); scientific and technological cooperation (Vice Presidency for Science and Technology); and discussions among the heads of chambers of commerce (Iran Chamber of Commerce, Industries, Mines, and Agriculture).

On the second day, the prime ministers of the five Caspian littoral states will sign a final declaration outlining measures to strengthen cooperation and implement agreements through periodic ministerial follow-ups.

The first Caspian trade and economic cooperation agreement was signed in August 2018 in Kazakhstan and ratified by Iran’s Parliament in January 2023. Under Article 5 of the agreement, the Caspian Economic Forum is to be held periodically in each of the coastal nations.

The inaugural Caspian Economic Forum and exhibition took place in August 2019 in Awaza, Turkmenistan, with the participation of prime ministers and trade delegations.

The second forum was held in Moscow in October 2022, attended by Iran’s former First Vice President Mohammad Mokhber and other leaders. During that meeting, it was agreed that Iran would host the third edition in 2024.

 

DOGE: Trump-Musk Purge of Federal Workers

There is growing impression that mass firing spree is about gutting the federal government, silencing workers, and forcing agencies into submission to a radical agenda that prioritizes cronyism over competence.

The Trump administration intensified its large-scale purge of the federal government on Thursday by moving to fire potentially hundreds of thousands of probationary employees, an effort that one leading union condemned as a power grab aimed at forcing agencies to capitulate to the whims of a lawless president.

The new flurry of terminations impacted workers across at least seven federal agencies, from the Department of Veterans Affairs—which said it fired 1,000 employees—to the Forest Service, Department of Education, Office of Personnel Management (OPM), and Consumer Financial Protection Bureau (CFPB).

Everett Kelley, national president of the American Federation of Government Employees—a union that represents more than 750,000 federal workers—said no one should fall for the Trump administration's claim that the mass firings are about federal employees' performance or enhancing government efficiency.

“This administration has abused the probationary period to conduct a politically driven mass firing spree, targeting employees not because of performance, but because they were hired before Trump took office," Kelley said in a statement Thursday.

"These firings are not about poor performance—there is no evidence these employees were anything but dedicated public servants. They are about power. They are about gutting the federal government, silencing workers, and forcing agencies into submission to a radical agenda that prioritizes cronyism over competence."

Vowing to "fight these firings every step of the way," Kelley said terminated employees were "given no notice, no due process, and no opportunity to defend themselves in a blatant violation of the principles of fairness and merit that are supposed to govern federal employment."

"We will stand with every impacted employee, pursue every legal challenge available, and hold this administration accountable for its reckless actions," said Kelley.

"Federal employees are not disposable, and we will not allow the government to treat them as such."

"None of this is about saving money, it is about Musk and Trump enriching themselves and their wealthy friends while making huge cuts to services Americans depend on."

The new purge targeting more recently hired government employees marks the latest salvo in the Trump administration's far-reaching assault on federal agencies, an effort spearheaded by unelected billionaire Elon Musk and his so-called Department of Government Efficiency, or DOGE.

President Donald Trump has given the advisory commission unprecedented authority over federal hiring, effectively installing Musk as the leader of a shadow government in Washington DC.

Yemen vows to confront Trump's Gaza plan

The leader of Yemen’s Ansarallah, Sayyed Abdul-Malik al-Houthi, has warned United States regarding the plan to displace the Palestinian people from their homeland. 

He threatened if the US attempts to implement this plan, Yemen “will intervene militarily to stop it and act within its holy war duty and will not remain idle.”

Al-Houthi described US President Donald Trump’s plan to displace Palestinians as a “confiscation of their rights.”

He added Trump is a “criminal accustomed to making ridiculous and absurd statements,” describing the plan as “a joke and naïve talk coming from a president of a country that presents itself as civilized with false titles.”

According to al-Houthi, Trump’s repeated promotion of the displacement plan “reflects his persistence in a criminal project that denies justice and truth.”

Al-Houthi emphasized that Trump’s plan is “illegitimate and unjust” and noted that the US president “seems serious about promoting it and pressuring some Arab states to accept it.”

He added, "We are not surprised by this plan from an American president whose policies reflect tyranny and a history of criminality. There are no limits to Trump’s ambitions, as he supports the aggressive Zionist project and seeks to implement it.”

He explained that Trump's first-term project under the so-called “Deal of the Century” has now evolved in his second term into what he described as the “Crime of the Century.” 

Trump’s plan, he said, aims to achieve what the Israeli invasion of Gaza could not: displacing Palestinians from their land.

Al-Houthi stated that when the US discusses displacing Palestinians from Gaza and the West Bank, it “seeks to completely liquidate the Palestinian cause.”

The Ansarallah leader highlighted that US deceit has been exposed in every stage of the peace process, and the Americans themselves “betrayed all agreements made between the Palestinian Authority and the Israeli enemy regarding the two-state solution, which they supervised.”

Al-Houthi noted that the US “did not respect or consider the Arab states that betrayed Gaza during the aggression” and “supports Israeli expansion across Arab territories.”

Therefore, he stressed the importance of awareness about what comes before and after the displacement plan, as it is “part of the Zionist project aimed at expanding and targeting holy sites, foremost among them the al-Aqsa Mosque. Its success depends on Arab acceptance.”

He affirmed that "Trump’s plan can only succeed if the Arabs accept it, especially the neighboring Arab countries.”

“There is a significant responsibility on the part of the Arab countries that declared a clear stance rejecting Trump’s plan. This is crucial, but the most important thing is maintaining this stance,” he added.

Al-Houthi emphasized that “it is unacceptable for Arabs to accept Trump’s plan; doing so would mean complicity in a terrible crime of displacement.” 

He warned the U.S. is seeking to trap the Arabs, calling for unity in rejecting Trump’s plan and supporting the Palestinian people.

According to al-Houthi, any approval of Trump’s plan will have dangerous repercussions for the region.

Regarding Yemen’s position on threats to resume the war on Gaz, al-Houthi reiterated that Yemen “firmly and principally supports the Palestinian people and their fighters and will stand by them with all available means.”

Al-Houthi vowed that Yemen “will move militarily to target both Israeli and American enemies if they launch an aggression on Gaza.” 

He called on the Yemeni armed forces to maintain full readiness in anticipation of any US aggression.

He added, “We will not hesitate to target the Israeli and American enemies together, monitoring the implementation of the agreement. Our people, through their massive demonstration tomorrow (Friday), will send a warning message to Israel and the US not to break the agreement.”

Al-Houthi concluded his speech by affirming that Yemen “will maintain continuous coordination with the fighters in Palestine and the resistance axis,” addressing them: “You are not alone; we are with you and will remain with you until Palestine is liberated and these evil plans are defeated.”

 

PSX benchmark index up 1.6%WoW

The benchmark index of Pakistan Stock Exchange (PSX) experienced a marginally positive week, largely influenced by corporate earnings announcements. During the week, the index gained 1,762 points or 1.6%WoW to close at 112,085 points on Friday, February 14, 2025.

Trading volumes inched higher as compared to last week to 525.1 million shares (up 21.0%WoW). In MSCI's February 2025 index review, one company was added, and another was upgraded to the MSCI Frontier Markets Index from small cap. Additionally, three securities were added and three were removed from the MSCI Small Cap Index. On the macro front, several important data points came in during the week, including remittances for January 2025 were reported at US$3.0 billion, up 25%YoY.

PIB auction witnessed yields declining by 25bps for the 2-year paper as well, while remaining flat for 3, 5 and 10 year tenures.

Foreign exchange reserves held by State Bank of Pakistan (SBP) declined by US$252 million to US$11.2 billion as of February 07, 2025.

Urea sales dropped 27%YoY and DAP sales dropped 8%YoY during January 2025. Automobile sales increased by 31%YoY to 19,372, given New Year effect being the primary catalyst behind the sales increase alongside OEM’s providing discounts/installment offers on selective variants.

Other major news flow during the week included: 1) Three out of five key IMF conditions were met, 2) 1HFY25 budget deficit recorded at 1.2% of GDP, 3) Pakistan requested rescheduling of US$3.4 billion Chinese debt, 4) IMF appreciated ongoing reforms in judiciary, 5) Prime Minister Shahbaz met UAE president in Abu Dhabi to further strengthen bilateral ties.

Jute, Refinery, and Woollen were amongst the top performing sectors, while top laggards included Leasing, Vanaspati & Allied Industries, and Textile Weaving.

Major selling was recorded by Individuals, Foreigners and Mutual Funds with a net sell of US$17.5 million. Banks absorbed most of the selling with a net buy of US$9.7 million.

Top performing scrips of the week were: BOP, LUCK, ATRL, PSEL, and MLCF, while laggards included: PGLC, MEHT, BAHL, KTML, and PABC.

According to AKD Securities, the market outlook remains positive, with the market expected to largely being driven by specific scrips and sectors, following any trigger or corporate results.

Over the medium term, the benchmark index is anticipated to sustain its upward momentum through CY25, primarily driven by the strong profitability of fertilizer companies, higher sustainable ROEs of banks and improving cash flows of E&Ps and OMCs, benefitting from falling interest rates.