Mission Grey Daily Brief - November 15, 2024
Summary of the Global Situation for Businesses and Investors
The world is witnessing a series of geopolitical and economic events that could have significant implications for businesses and investors. Pakistan and Bangladesh are taking steps to improve their diplomatic relationship, which could open up new business opportunities in the region. Meanwhile, tensions between Israel and other countries are escalating, with airstrikes in Syria and violence at a football match in Amsterdam. In Sudan, the discovery of French weapons systems has raised concerns about a potential violation of a U.N. arms embargo. Additionally, China's hacking of America's telecommunication system and efforts to court G20 nations to circumvent Western sanctions in a potential Taiwan conflict are significant developments that could impact global supply chains and geopolitical alliances.
Pakistan-Bangladesh Relations
The arrival of a Pakistan cargo vessel in Bangladesh marks a historic moment in the diplomatic relationship between the two countries, which has been traditionally complex since the 1971 Bangladesh Liberation War. The docking of the vessel in Bangladesh's Chittagong port is the first-ever direct maritime contact between the two countries and signals a warming of ties under the new interim government led by Mohammad Yunus. This shift in relations could have significant implications for businesses and investors, as it opens up new opportunities for bilateral trade and investment. The new route will streamline supply chains, reduce transit time, and create new business opportunities for both countries.
Israel-France Relations
France has stepped up security for the national football team's match against Israel on Thursday to avoid a repeat of the violence in Amsterdam, where five people were hospitalised during a trip to play Ajax. The match is considered high-risk due to the tense geopolitical context and the presence of prominent political figures. Only about 20,000 fans are expected in the 80,000-seat stadium after Israel urged its citizens to avoid attending sporting and cultural events abroad following the violence in Amsterdam. This escalation in tensions could have implications for businesses and investors with interests in the region, as it highlights the need for increased security measures and the potential for further disruptions to public order.
Sudan Civil War
Amnesty International has reported the presence of French weapons systems in Sudan, which likely constitutes a violation of a U.N. arms embargo. The civil war in Sudan has resulted in over 20,000 deaths and 11.6 million people being forcibly displaced. The discovery of French weapons systems raises concerns about the potential violation of international law and the role of foreign governments in the conflict. This development could impact businesses and investors with interests in the region, as it highlights the ongoing instability and the potential for further international involvement.
China-US Relations
China's hacking of America's telecommunication system and efforts to court G20 nations to circumvent Western sanctions in a potential Taiwan conflict are significant developments that could impact global supply chains and geopolitical alliances. The breaches enabled the theft of customer call records data and the compromise of private communications of a limited number of individuals in government or political activity. This cyber espionage campaign could have far-reaching consequences for businesses and investors, as it undermines trust in the security of telecommunications systems and raises concerns about the potential for further cyber attacks.
Conclusion
The global events highlighted in this report demonstrate the complex and interconnected nature of global politics and economics. Businesses and investors should remain vigilant and proactive in managing risks and capitalizing on opportunities in this ever-changing global landscape.
Further Reading:
Biden and Xi will meet in Peru as US-China relations tested again by Trump’s return - Toronto Star
China to court G20 nations amid US-led sanctions over Taiwan: report - South China Morning Post
Facing Trump’s return, South Korea tees up for alliance strains - VOA Asia
France steps up security for Israel match after Amsterdam violence - The Independent
NATO and the EU press China to help stop North Korea’s support for the war on Ukraine - Toronto Star
Türkiye halts trade in strong response to Israel’s attacks on Gaza | Daily Sabah - Daily Sabah
Türkiye’s ‘diplomatic excellence’ could help Trump end wars: Economist | Daily Sabah - Daily Sabah
Themes around the World:
Massive U.S. Investment Commitments
South Korea has committed over $350 billion in investments to the U.S. to avoid tariffs, including $200 billion in cash and $150 billion in shipbuilding and industrial projects. While this strengthens bilateral ties, it raises concerns about domestic economic weakening and potential hollowing out of South Korea’s manufacturing base due to capital outflows.
Foreign Investment Volatility
Indonesia experienced significant foreign capital fluctuations in 2025, with net withdrawals of Rp3.79 trillion followed by inflows of Rp2.29 trillion in consecutive weeks. This volatility reflects investor caution amid fiscal concerns and global uncertainties, impacting market liquidity, bond yields, and equity valuations, thereby influencing investment strategies and capital market stability.
Geopolitical Peace Negotiations
Emerging peace proposals, including a US-backed 28-point framework, propose territorial concessions and military limitations for Ukraine, sparking domestic and allied concerns. These negotiations influence regional stability, investor confidence, and defense sector dynamics, with potential to reshape Ukraine's sovereignty, security guarantees, and economic reconstruction prospects.
Business Sentiment and Sectoral Performance
Business confidence in France shows modest improvement driven by the service sector, though industrial indicators remain mixed. This uneven recovery suggests a moderate economic trajectory influenced by fiscal tightening and global geopolitical tensions.
Economic Slowdown and Recession Risks
The UK economy shows signs of stagnation with 0.1% quarterly growth and rising unemployment to 5%, the highest in four years. This fragile economic state undermines business confidence, delays investments, and raises recession fears, impacting consumer spending and overall market stability ahead of the Autumn Budget.
State-Owned Enterprise Consolidation
Pertamina's planned consolidation of subsidiaries aligns with broader government efforts to streamline nearly 1,000 state-owned enterprises to about 200. This rationalization aims to enhance operational efficiency and focus on core energy activities, impacting energy sector investments and state enterprise governance.
Thailand Stock Market Revival
Analysts forecast a significant rebound in Thailand's equity market in Q4 2025, driven by stronger corporate earnings, easing US-China tensions, and potential US Federal Reserve interest rate cuts. Government stimulus programs, particularly the 'Khon La Khrueng Plus' co-payment scheme, bolster consumption-linked sectors like banking, tourism, and retail, enhancing investment appeal amid undervaluation.
Taiwan's Civil Preparedness Amid Rising Tensions
Taiwan has issued a comprehensive citizen emergency handbook addressing preparations for natural disasters and potential Chinese invasion scenarios. This initiative reflects heightened security concerns, emphasizing civilian readiness, misinformation countermeasures, and national defense resilience in the face of escalating cross-strait tensions.
Supply Chain Strategic Importance
France lacks a cohesive national supply chain governance despite its critical role in economic resilience and competitiveness. The supply chain integrates physical, financial, and informational flows, influencing up to 80% of product costs. Enhancing supply chain oversight is vital for mitigating disruptions, reducing costs, and securing France's position in global trade amid geopolitical and environmental challenges.
China’s Strategic Balancing Act
China maintains a pragmatic approach toward Iran amid UN sanctions, balancing adherence to international norms with strategic economic and diplomatic support. Utilizing alternative financial mechanisms and local currency trade, China sustains critical ties with Iran, shaping regional geopolitics and offering Iran avenues to mitigate sanction impacts.
Trade Policy Divergence and Protectionism
Mexico is adopting a more protectionist stance toward China while striving to maintain free trade within North America. This strategic divergence reflects geopolitical shifts and impacts Mexico’s trade diversification, supply chain realignments, and foreign investment patterns, with implications for global trade flows and Mexico’s economic partnerships.
Geopolitical Influence and Trade Preferences
South Africans broadly support open international trade and greater African representation in global affairs. The country’s leadership roles in the African Union and G20 emphasize priorities like climate change and fair trade. Despite recent US tariffs on exports, South Africa is leveraging regional agreements like AfCFTA and expanding trade with BRICS and emerging markets.
Market Manipulation Crackdown
The Turkish government is addressing market manipulation by investment funds through tougher penalties and regulatory reforms. Efforts include increasing fines, enhancing oversight, and promoting financial literacy. This crackdown aims to stabilize capital markets, protect investors, and improve market integrity amid increased retail and institutional participation in equities and cryptocurrencies.
US Government Shutdown Impact
The 2025 US federal government shutdown, the longest in history at 43 days, furloughed 900,000 workers and disrupted economic data releases. While the direct economic impact is moderate relative to global GDP, uncertainty affected market sentiment, delayed data, and risk appetite, influencing investment decisions and global asset flows, with markets often rebounding post-shutdown.
Rupiah Redenomination Debate
The proposed redenomination of the rupiah aims to enhance economic efficiency and currency credibility but faces criticism for lacking empirical evidence of growth benefits. Economists warn of significant costs and urge focus on productivity and fiscal fundamentals instead. The plan, slated for legislative consideration by 2027, presents potential policy risks affecting investor sentiment and economic stability.
Supply Chain Strategic Importance and Governance Gap
The French economy increasingly recognizes supply chain management as a critical strategic function impacting sovereignty and economic resilience. However, France lacks integrated public governance and expertise in supply chain oversight, unlike peers such as the US and Germany, posing risks of costly disruptions and missed opportunities in global trade and industrial competitiveness.
Shifting Trade Alliances and Geopolitical Realignment
Brazil is deepening ties with China and Russia to reduce dependence on the U.S., driven by rising U.S. tariffs and a desire for strategic autonomy. This includes military cooperation, energy diplomacy, and alignment with BRICS. The shift may reshape trade flows, expose Brazil to geopolitical risks, and alter its role in regional and global supply chains.
Tariff Reduction and Export Protection
The ART reduces US tariffs on Malaysian exports from 25% to 19%, the lowest among ASEAN countries with US trade surpluses. It exempts 1,711 tariff lines protecting RM22 billion in exports, including palm oil, rubber, aerospace, and pharmaceuticals. This tariff relief safeguards thousands of jobs and sustains Malaysia’s export competitiveness in critical sectors.
Stable Financial System Amid Global Risks
Indonesia's financial system remained stable in Q3 2025, supported by coordinated policy efforts from key institutions. Retail sales grew 5.8% YoY, and monetary expansion continued, despite global uncertainties like US tariffs and Fed rate cuts. This stability underpins investor confidence and economic growth prospects, influencing foreign direct investment and financial market strategies.
Sovereign Wealth Fund Governance Concerns
The sovereign wealth fund Danantara faces criticism over overlapping mandates, governance opacity, and potential conflicts of interest. Economists warn that its dominance over state-owned enterprises could distort market competition and crowd out private sector growth, posing risks to Indonesia's business climate and investor confidence.
Stock Market Revival and Valuation
Analysts forecast a strong rebound in the Thai equity market in Q4 2025, driven by improved corporate earnings, easing US-China tensions, and expectations of US interest rate cuts. Government stimulus programs and robust earnings revisions in infrastructure, technology, and tourism sectors underpin optimism, with Thai stocks currently undervalued relative to regional peers, attracting investor interest.
Investment Trends Favoring US Economy
Despite global uncertainties, the US remains the top investment destination for the next 18 months, driven by robust capital expenditure in technology and AI sectors. BlackRock highlights strong GDP growth and a reversal of asset outflows to Europe, underscoring sustained investor confidence amid fiscal and geopolitical headwinds.
Thai Baht Appreciation Dynamics
The Thai baht is forecasted to appreciate against the US dollar through 2026, supported by a weakening dollar, fiscal surpluses, strong trade performance, and capital inflows. However, short-term volatility persists due to geopolitical risks, commodity price fluctuations, and global economic uncertainties, impacting export competitiveness and tourism recovery.
Business Sentiment and Market Performance
French business confidence shows modest improvement driven by the service sector, supporting short-term growth prospects. European markets, including France’s CAC 40, have rebounded amid positive global developments like the US government shutdown resolution, though underlying fiscal and political risks remain.
Structural Reforms in Energy and Logistics
Ongoing structural reforms targeting energy and logistics sectors are critical to unlocking South Africa's growth potential. Improvements in state-owned enterprises like Eskom and Transnet aim to reduce operational inefficiencies, support infrastructure development, and enhance supply chain reliability, which are essential for attracting investment and boosting industrial productivity.
Financial Sector Strength and Reform Momentum
India's financial sector is increasingly robust, innovative, and inclusive, underpinning economic transformation. Reforms such as bank recapitalization, improved NPA recovery, and digital infrastructure development (e.g., GIFT City) enhance market liquidity and investment channels. Structural shifts include rising mutual fund assets, declining bank credit dominance, and increased equity market participation, supporting sustainable growth and capital formation.
Robust Economic Growth Post-Conflict
Israel's economy rebounded strongly in Q3 2025 with a 12.4% annualized GDP growth following wartime contractions. Growth was fueled by surging private consumption, exports, and investments, signaling resilience despite security challenges. This robust recovery supports investor confidence, boosts domestic demand, and strengthens Israel's position as a dynamic market for global trade and investment.
Growth Cycle Bottoming Out with Positive Outlook
India's domestic growth cycle shows signs of bottoming out, supported by low interest rates, easing crude prices, and a normal monsoon. Government infrastructure investments, private capex recovery, and renewable energy expansion underpin a medium-term uptrend, although global trade uncertainties and geopolitical risks remain headwinds for sustained growth acceleration.
Fintech Market Expansion
Mexico's fintech sector is rapidly growing, with a market size of USD 20 billion in 2024 and projected CAGR of 12.8% through 2033. Driven by digital transformation, increased smartphone penetration, and supportive regulations, fintech innovations in payments, lending, and blockchain are enhancing financial inclusion and attracting investment.
Fiscal Policy and Currency Market Effects
Aggressive tax hikes in France contribute to capital flight towards USD assets, fueling a strong US dollar rally. These fiscal measures impact foreign investment attractiveness and alter currency valuations, affecting trade competitiveness and investment flows. The interplay between French fiscal policy and global currency markets presents both risks and opportunities for multinational investors and exporters.
Strengthening U.S.-Saudi Trade and Investment Ties
Trade and investment relations with the U.S. are evolving, with Saudi Arabia shifting exports towards Asia but maintaining significant financial investments in U.S. equities. The Public Investment Fund's strategic acquisitions, including a $55 billion buyout of EA Sports, highlight deepening economic collaboration focused on technology, entertainment, and defense sectors.
Internationalization of Brazilian Companies
Brazilian firms are accelerating international expansion to diversify markets beyond domestic consumption. Strategies include establishing physical presence, local partnerships, and regulatory adaptation in South America, Asia, and the U.S. Effective currency risk management and compliance are critical amid global trade fragmentation and geopolitical tensions.
Regulatory and Antitrust Developments in Tech
Recent US court rulings and regulatory actions, such as Meta's antitrust case outcome and Federal Reserve banking supervision updates, shape the competitive landscape and compliance costs for technology firms. These influence innovation, market concentration, and operational risks.
Crypto and AML Regulatory Pressure
Turkish authorities have seized a major crypto company amid money laundering investigations, reflecting increased regulatory scrutiny. Following removal from the FATF gray list, Turkey is intensifying anti-money laundering enforcement, impacting fintech operations and investor confidence in digital asset markets.
Foreign Investor Capital Fluctuations
Despite recent foreign investor withdrawals totaling Rp3.79 trillion in November 2025, domestic trading activity surged with record transaction volumes and values. Net foreign sales year-to-date remain significant, yet increased domestic investor engagement mitigates volatility. This dynamic highlights Indonesia's evolving capital market structure and the importance of domestic investor base stability amid global capital flow shifts.
Rising Corporate Insolvencies in Germany
Germany faces a 12.2% increase in corporate insolvencies, with sectors like transport and construction particularly affected. The value of debts linked to these insolvencies has more than doubled, signaling deeper economic distress beyond small firms. This trend threatens employment and consumer spending, complicating Germany's economic recovery amid rising interest rates and energy costs.