Will Iran Be the Next Target?

The reported capture of Venezuela’s president should not be seen as an isolated incident. It resembles a full-dress rehearsal—a live demonstration of how far the United States is willing to go to impose political outcomes beyond its borders. For those still clinging to the illusion of sovereign immunity in the international system, this episode should serve as a sobering wake-up call.

Washington has a long record of attempting regime change in Venezuela through sanctions, covert operations, and diplomatic isolation. These efforts largely failed to unseat the government, but they steadily weakened the country’s economy and institutions. When economic strangulation did not deliver political submission, escalation appeared inevitable. The capture of a sitting president marks a dangerous new threshold, one that blurs the line between foreign policy and outright coercion.

History offers unsettling parallels. One may recall the failed attempt by the US in 1980 to free its embassy staff held hostage in Iran. Though framed as a rescue mission, it underscored Washington’s readiness to violate sovereign territory when strategic or political pressure mounts.

More recently, Sheikh Hasina’s transfer to India can be viewed through a similar prism: political outcomes shaped not by domestic consensus but by external facilitation. Different contexts, same method—power over process.

Labeling such actions as “state terrorism” may sound provocative, but the term merits serious consideration. When a powerful state uses fear, coercion, and force to compel political change in weaker nations, the distinction between counterterrorism and terror itself becomes dangerously thin.

The irony is striking, the very actor positioning itself as the global guardian of democracy increasingly relies on methods that undermine international law.

Iran inevitably enters this conversation. Long under sanctions, diplomatically cornered, and persistently portrayed as a threat, Tehran fits the familiar profile. If Venezuela was the rehearsal, Iran could well be the main act. The lesson is stark - resistance invites escalation; sovereignty offers no guarantee.

The world must condemn the US actions unequivocally. Silence today signals consent tomorrow. If such precedents stand unchallenged, no regime—friend or foe—can consider itself safe. The erosion of international norms does not stop with adversaries; it eventually consumes the system itself.

US will intervene if Iran kills protesters, Trump

US President Donald Trump has warned Iran's authorities against killing peaceful protesters, saying Washington "will come to their rescue".

In a brief post on social media, he wrote: "We are locked and loaded and ready to go." He gave no further details.

A senior adviser to Iran's Supreme Leader Ayatollah Ali Khamenei responded by saying Trump should "be careful" if he intervened, warning of potential chaos across the Middle East.

At least six people are reported to have been killed in Iran on Thursday after almost a week of mass protests sparked by worsening economic conditions.

In Friday's post on Truth Social, Trump wrote: "If Iran shots [sic] and violently kills peaceful protesters, which is their custom, the United States of America will come to their rescue."

Ali Larijani, secretary of the Supreme National Security Council, condemned Trump’s remarks, saying he “should know that American interference in this internal issue is equivalent to chaos across the entire region and the destruction of American interests”.

“We consider the positions of the protesting merchants separate from those of the destructive elements,” Larijani added in a post on X.

“The people of the US should know that Trump began the adventurism. They should take care of their own soldiers.”

Larijani’s remarks likely referenced the US’s wide military footprint in the region. In June, Iran attacked Al Udeid airbase in Qatar after the US strikes on three Iranian nuclear sites during Israel’s 12-day war with Iran.

In his post, the US president did not specify what action Washington could take against the Iranian authorities.

Iranian officials earlier said a member of the country's securities forces had been killed on Wednesday in the western city of Kouhdasht.

Footage posted on social media showed cars set on fire during running battles between protesters and security forces.

The protests began on Sunday in Tehran among shopkeepers angered by another sharp fall in the value of the Iranian currency, the rial, against the US dollar on the open market.

President Masoud Pezeshkian has said he will listen to the "legitimate demands" of the protesters.

The protests have been the most widespread since an uprising in 2022 sparked by the death in custody of Mahsa Amini, a young woman accused by morality police of not wearing her veil properly. 

 

Yemen: Where Saudi and Emirati Paths Parts

For much of the past decade, Yemen has been framed as a proxy battleground between Saudi Arabia and Iran. Yet beneath this familiar narrative lies a quieter but increasingly significant fault line - the divergence between Saudi Arabia and the United Arab Emirates. Though, both entered the Yemen war as close allies, their strategic priorities have steadily drifted apart.

Saudi Arabia’s engagement has remained fundamentally security-centric. Yemen is Riyadh’s vulnerable southern flank, and the prospect of an Iran-aligned force entrenched in Sana’a poses a direct threat. This explains the kingdom’s consistent emphasis on Yemen’s territorial integrity and its support for a strong, central government capable of asserting authority nationwide. For Saudi Arabia, a fragmented Yemen is not a solution but a long-term liability.

The UAE, while initially aligned with these goals, adopted a markedly different approach as the conflict evolved. Abu Dhabi focused less on Yemen’s political center and more on its strategic periphery. Control over ports, islands, and coastal corridors—Aden, Mukalla, Socotra, and areas near the Bab el-Mandeb strait—became central to Emirati calculations. These assets sit astride vital global trade and energy routes, giving them value far beyond Yemen’s internal politics.

This divergence became most visible in southern Yemen. The UAE backed local militias, most notably the Southern Transitional Council (STC), which advocates autonomy or independence for the south. While these forces proved effective in securing territory and countering militant groups, they also challenged the authority of the Saudi-backed Yemeni government. Repeated clashes between allied factions exposed the incompatibility of Saudi and Emirati endgames.

For Riyadh, decentralization risks prolonged instability and leaves the north vulnerable to sustained Houthi—and by extension Iranian—influence. For Abu Dhabi, a decentralized or divided Yemen, with friendly actors controlling key maritime nodes, offers influence without the burden of governing a fractured state.

Tensions were further sharpened by differing risk calculations. Saudi Arabia remained deeply exposed militarily and diplomatically as the war dragged on. The UAE, by contrast, reduced its direct military footprint after 2019, outsourcing security to local allies while retaining strategic leverage. This asymmetry quietly altered the balance within the coalition.

The Saudi–UAE rift in Yemen is not ideological, nor is it an outright break. It is a case study in how alliances strain when national interests diverge. Yemen has revealed a fundamental truth of regional geopolitics - partners may fight together, but they rarely fight for the same future.

PSX Benchmark index up 3.8%WoW

Pakistan Stock Exchange (PSX) moved upwards sharply during the week, with benchmark Index advancing 6,634 points, up 3.8%WoW, to close at a fresh all-time high of 179,035 points.

Market participation improved by 9.7%WoW, with average daily traded volume rising to 1.3 billion shares, as compared to 1.1 billion shares in the prior week.

Momentum was driven by a favorable new year effect alongside a softer than expected December 2025 inflation of 5.6%.

Sentiments were further buoyed by sharp rally in the E&P sector, following OGDC’s oil and gas discovery in Nashpa Block, where a second formation delivered 4,100 barrels oil and 10.5mmcfd gas, adding to the earlier discovery announced in December 2025.

OMC volumes also increased by 6%YoY during December 2025.

On the macroeconomic front, Trade deficit increased by 24%YoY to US$3.7 billion during December 2025, whereas, GDP grew by 3.7%YoY during 1QFY26.

Foreign exchange reserves held by State Bank of Pakistan (SBP) increased by US$13 million to US$15.9 billion as of December 26, 2025.

Other major news flow during the week included: 1) SBP buys US$6.9 billion from currency market in 12 months, 2) FBR collects PKR6.2 trillion in 1HFY26, but falls short by PKR338 billion of target, 3) Pakistan Eyes US$1 billion Liability Settlement via UAE investment in Fauji Group, 4) US seeks Pakistani partnership in locomotive sales, mineral exploration, and 5) Pakistan gets ready to launch first Panda bond in China.

Transport, Property, Vanaspati & Allied Industries, Oil & Gas Exploration Companies, and Pharmaceuticals were amongst the top performing sectors, while Jute, Woollen, Cement, Real estate Investment Trust, and Textile Composite, were amongst the laggards.

Major buying was recorded by Mutual Funds and Companies with a net buy of US$24.5 million and US$9.4 million, respectively. Foreigners and Banks were major sellers with net sell of US$18.8 million and US$10.7 million respectively.

Top performing scrips of the week were: JVDC, SSOM, UBL, FFL, and EFERT, while laggards included: DGKC, CHCC, KTML, KOHC, and MLCF.

AKD Securities foresees the positive momentum in the benchmark index to continue due to further monetary easing driven by improving external account position and continuous focus on reforms amid political stability.

The brokerage forecasts the benchmark Index to reach 263,800 by December 2026.

Investors’ sentiments are expected to improve on the likelihood of foreign portfolio and direct investment flows, driven by improved relations with the United States and Saudi Arabia.

Top picks of the brokerage house include: OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.

Year 2026 Key Events

Happy New Year from Nikkei Asia! It's the beginning of 2026, and in newsroom operations, one of the most important tasks is scheduling. Of course, the news never unfolds exactly as we predict. Our profession is to plan, prepare for news and respond flexibly to breaking headlines, grounded in meticulous reporting. With that caveat, I'd like to share my humble predictions on key news events likely to happen this year in Asia and beyond.

First, Asia has some major elections coming up. In Myanmar, the first general election since the military seized power in 2021 is being held in stages, with results expected by the end of January. Even after the election, military-friendly rule will probably remain, as will tensions with pro-democracy forces and ethnic groups. What deserves attention is how regional organizations like ASEAN as well as neighboring and major countries position themselves toward Myanmar's new administration. Following that, elections will be held in Thailand and Nepal. Thailand's general election is expected to significantly impact the country's uncertain relationship with Cambodia.

In business and tech, AI and EVs will be in the spotlight again following last year's booms. Massive data centers were built across Asia, and Chinese-made EVs expanded their market share, particularly in Southeast Asia. In AI, concerns about a stock market "bubble" remain strong, and whether that boom continues, deflates or goes bust will be a significant focus. Since Western markets hesitated to join the rapid EV shift, sales of Chinese EVs are likely to keep surging, especially in Asia. However, the crowded sector has given way to excessive competition, and this year may clearly separate winners from losers.

From June to July, the FIFA World Cup will be held in the U.S., Canada and Mexico. I'll refrain from predicting the champion, but you all know which team I'm rooting for. And this time, I think we might make it pretty far.

In November, the U.S. will hold midterm elections, which will serve as a verdict on President Trump's first two years in office. Over the past year, the president has shaken Asia and the rest of the world with threats and tariffs. This year, especially in the latter half, he will likely have to turn his attention to domestic issues. That said, Trump has defied every prediction so far, so caution is warranted.

How will China's economy evolve? Will U.S.-China relations improve or worsen? Predictions could go on endlessly, so I'll stop here. One thing is for sure in an increasingly uncertain world: Nikkei Asia's reporters and editors will spare no effort to deliver fact-based, insightful journalism on all issues. Please continue to look forward to Nikkei Asia's coverage in 2026.

Courtesy: Nikkei Asia

Western Media’s Selective Outrage on Iran

Protests are a natural and fundamental part of any society whose citizens care about their future and believe they can influence it. They are not a sign of systemic failure, but an indicator of civic health and the practice of free speech, assembly, and association. For Western states, their media, and their politicians, all of this holds true—except when the protests occur in Iran.

The unprecedented volatility in the currency market and the rapid devaluation of the Iranian Rial in recent weeks compelled business owners (known as bazaaris) to shutter their shops, go on strike, and gather in several of Tehran’s central squares to voice their discontent. Reports from journalists on the scene and footage shared by participants indicate the protests—spanning several days—remained largely peaceful.

Demonstrators refrained from vandalizing public property, kept pathways open for vehicles, and directed their slogans toward improved economic management. Anti-riot forces monitored the gatherings and seldom intervened. None of what has emerged from Iran would be unfamiliar in the regular protests seen across European capitals or American cities.

Yet this manner of protest does not sit well with the West or with Israel. Circulated videos show unidentified individuals urging bazaaris to vandalize property and block streets. In one instance, a young woman addressing a crowd fled after protesters refused to escalate into violence. In another, a man attempted to set a municipal trash bin ablaze before bystanders intervened and security forces arrested him. None of the bazaaris recognized him afterward.

Simultaneously, an online influence campaign has emerged, editing videos and fabricating audio to falsely suggest protesters are demanding the return of the deposed Shah’s son. A widely circulated image symbolizing the protests was later exposed as AI-generated.

Israel has openly admitted deploying agents to steer these peaceful demonstrations toward chaos. Mossad’s Persian-language account urged Iranians to “hit the streets,” while an Israeli television reporter openly called for organizing protests to justify a wider war. Iran International echoed similar narratives, promoting escalation as a pathway to foreign military action.

Political figures joined in. Former Israeli Prime Minister Naftali Bennett declared his readiness to help Iranians achieve “freedom,” while US President Donald Trump warned Iran of further “turmoil,” without acknowledging that Iran’s economic distress stems largely from the “maximum pressure” sanctions he imposed in 2018.

Iranian authorities acknowledged the protests and announced steps to stabilize the Rial. President Masoud Pezeshkian and Parliament Speaker Mohammad Baqer Qalibaf both described the demonstrations as legitimate while cautioning against foreign exploitation.

Ultimately, these events reveal a clear double standard - peaceful assembly is praised in one context yet exploited when it occurs in a country opposed by Western and Israeli interests. The true measure of these protests lies not in sensationalized narratives from abroad, but in the legitimate and orderly spirit shown by the Iranian people themselves.

PSX Benchmark Index up 51 percent in 2025

According to Pakistan’s leading brokerage house, Topline Securities, Pakistan Stock Exchange (PSX) during 2025 posted return of 51%, taking 2 years cumulative returns to 179%. In US$ terms, market posted return of 50% (2 year returns 180%). The stated return is inclusive of dividends received during this period.

The larger portion of the price return (40%) came through re-rating of index, with PE rising from 4.1x in December 2024 to 7.1x in December 2025. The dividend yield during the year was 8%.

The continuation of positive momentum was driven by stable and improving economy, political stability, lower interest rates and stable PKR also helped.

Major triggers during the year which helped index in re-rating included: 1) Successful IMF review throughout the year, 2) Credit rating upgrade by all 3 top global rating agencies S&Ps, Moody’s and Fitch, 3) decline in interest rate by 250 bps, 4) stable/ improved macro indicators, 5) Saudi Arabia- Pakistan Defence Pact, and 6) PIA privatization.

During the year, market also witnessed few volatile event s namely Pakistan India Conflict of May 2025, which resulted in market losing 5.6% in 3 sessions, recovered all losses in a single day after successful mediation by US president Donald Trump. Other events which caused volatility in market were, Iran Israel war, and imposition of tariffs by United States on global economies including Pakistan.

PSX market capitalisation also increased by 36% in 2025 to US$70 billion but still below its 2017 peak of US$100 billion.

Trading activity recorded strong growth in both volume and value, with volumes (ready/ cash) per day at PSX up 40% to 797 million shares/ day in 2025 which is all time high. Similarly, average traded value per day was up 64% to PKR37 billion/ day in cash market which is also all time high. In futures market, total traded volume and value per day were also up by 35% and 76% to 249 million share/ day and PKR14 billion/ day, respectively.

As per Bloomberg data, Pakistan’s KSE-100 Index was among the fifth best-performing markets in Asia/ Pacific region in US dollar terms in 2025.

The KSE Index remained the second-best performing major asset class in 2025, while gold was the top performer with a return of 73%, based on selected investment assets class in Pakistan.

PSX witnessed same momentum in offerings in 2025, with the bourse witnessing 7 offerings (including 2 GEM Board offerings and 1 Migration). However, total amount raised from investors through the 7 offerings in 2025 stood at PKR4.3 billion as against PKR8.4 billion in 2024.