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Africa is home to the world’s largest free trade agreement, in terms of number of countries, territory, and population – the African Continental Free Trade Area (AfCFTA). Fifty-four of 55 African Union member countries have signed up to the deal which covers a market of 1.3 billion people and a combined GDP of $3.4 trillion.

It aims to boost economic growth, intra-African trade and investment across the continent, but although it was established in February 2020, implementing the agreement has been slow.

According to the Economic Commision for Africa, African countries continue to trade with the rest of the world more than among themselves. Inadequate infrastructure, a lack of finance, and weak governance are often to blame.

The following interview has been edited for clarity and length.

Eleni Giokos: When you took on the job as Secretary General, did you think it was going to be this intense to create so many different standards across the continent, and what was the most challenging aspect of putting this all together?

Wamkele Mene: I don’t think anybody would’ve imagined how challenging and enormous the task is. One of the reasons it’s challenging and will continue to be challenging for a long time is because we are a very, very fragmented market. We have 47 state parties to the agreement establishing the AfCFTA. Hopefully the remaining few countries will ratify soon. Within those 47, we have 42 currencies. We have countries that have a GDP per capita of $110, and then at the (other) end of that spectrum, a GDP per capita of $25,000. We have the least developed countries, we have landlocked countries, we have countries that are at variance from a macroeconomic policy standpoint. So, when you try to integrate and create a single market, economic integration is incredibly difficult.

EG: How has AfCFTA evolved since it came to inception, since it’s been launched on the continent?

WM: We were established in the middle of Covid-19 in February 2020. The following month, March 2020, is when the entire continent of Africa shut down – closure of borders, closure of airports, everything that is an instrument for trade was shut down. For the first six to nine months of the year, it was extremely difficult to get anything done.

Now, we have concluded all the protocols of the agreement – in other words, the legal construct – including very difficult areas such as digital trade; rules of origin of local content for textiles and clothing, for the automotive sector; creating a dispute settlement mechanism for an entire continent of 47 countries trading under the AfCFTA. All these rules are the nuts and bolts of trade, and I am very happy that we are now in transition from negotiating the rules to implementing the rules.

EG: In 2022, seven countries chose to pilot the African Continental Free Trade Area. How is that going, how is that being adopted, are you seeing the actual implementation?

WM: In 2022, seven countries were ready. By readiness, we mean they introduced the customs systems, they gazetted the AfCFTA into their national law. This October (there) will be 37, which means that 37 countries are at a state of readiness and are trading under the rules and the preferences.

EG: A lot of people in the private sector say they don’t really feel the impact of the African Continental Free Trade Area. They don’t, frankly, think it’s working. What do you say to that?

WM: We are integrating a market of 47 countries. The private sector is, as I always say, a co-pillar and a co-driver of market integration on the continent because it’s the private sector that trades. What I would say to them is this: we are overcoming 60 years of market fragmentation. It’s not going to happen overnight. And we know this from the experience of the European Union, which is arguably the most successful market integration model in the world today. It is (31) years since the establishment of the European Union, and yet it still continues to have challenges.

EG: Here’s one of the most controversial issues. Aliko Dangote has been talking about the fact that he needs 35 visas to travel across the African continent. If the richest man in Africa can’t get around easily, who can? How does this hinder people doing business cross-border?

WM: It’s a significant barrier and constraint to intra-Africa trade and intra-Africa investment. There are only four countries that to date have ratified the African Union’s protocol on movement of persons – only four countries. There is an emotional instinct against allowing movement of persons in some countries. In some countries there are legitimate national security concerns. So, we have to work hard to make sure that we convince countries about the importance of moving in the same direction on free movement of persons whilst at the same time addressing the national security concerns that those individual countries have.

EG: Can we even be having this conversation on integration if we don’t actually focus on infrastructure that links the continent up? 

WM: More needs to be done to enable the continent of Africa to have the infrastructure that we need so that these goods can transit through borders seamlessly, efficiently, based on the rules that we have agreed to. So, we look forward to the operationalization of the Lobito corridor (a railway project that links link Angola, Zambia, and the Democratic Republic of Congo). All of these trade corridors that are embedded on world-class infrastructure will enable our continent to take drastic steps in boosting intra-Africa trade.

It’s not just about the trade rules, it’s about establishing the supply chain networks, the transport and logistics infrastructure that will support trade.

EG: It’s five years from now: What kind of conversation do you hope to be having with me about where we are?

WM: I think that what I’ve learned over the last four years in this position is that you have to be extremely patient. If in five years time we can demonstrate that we have moved intra-Africa trade from let’s say 15% to 25% or 30%, that will be a very important step forward.

I think we can double intra-Africa trade in the next five years, provided we introduce the tools that are required. So in other words, payment, ensuring that there is ease of access to intra-Africa payments; ensuring at the very minimum (there is) trade supporting infrastructure, particularly in the trade corridors (between) Central Africa, Eastern Africa, Northern Africa; and then third, we combine all of that with the political will and the rules that have been negotiated to create the single market. I believe that we’re going to get there.

In 2018, many (people) around the world, including on the continent of Africa, were saying that these Africans will negotiate forever and that the AfCFTA shall never be signed. And then of course, the AfCFTA was signed in Rwanda in 2018. Then they said it’ll never be ratified, and a year later the agreement was ratified – now 47 countries have ratified it. Now they’re saying that it shall not be implemented. In October, 37 countries will demonstrate implementation when they showcase the goods and the certificates of origin that they are trading in. At every milestone, there’s a new goal post for us to meet.

This post appeared first on cnn.com

It is “absolutely impossible” for Communist China to become Taiwan’s motherland because the island’s government is older, Taiwan’s president has said in a carefully timed speech that underscores the intense historical rivalry between the two.

Lai Ching-te, who took office in May, has long faced Beijing’s wrath for championing Taiwan’s sovereignty and rejecting the Chinese Communist Party (CCP)’s claims over the island.

Despite having never controlled Taiwan, China’s ruling Communist Party has vowed to “reunify” with the self-governing democracy, by force if necessary. But many people on the island view themselves as distinctly Taiwanese and have no desire to be part of the People’s Republic of China.

On Saturday, in a move likely to further infuriate Beijing, Lai dug into history to make his point, stressing that Taiwan is already a “sovereign and independent country” called the Republic of China (ROC), whose government ruled mainland China for decades before relocating to Taiwan when the CCP came to power.

The ROC was founded in 1912 after a Nationalist revolution overthrew China’s last imperial dynasty, the Qing. At the time, Taiwan was a Japanese colony, ceded by the Qing dynasty after it lost a war to Imperial Japan nearly two decades earlier.

The ROC later took control of Taiwan in 1945, following Japan’s defeat in World War II. Four years later, its Nationalist government then fled to the island after losing a civil war against Mao Zedong’s Communist forces, moving the seat of the ROC from the mainland to Taipei.

In Beijing, the CCP took power and founded the People’s Republic of China (PRC) on October 1, 1949. Since then, the two sides have been ruled by separate governments.

Successive Chinese leaders have vowed to one day take control of Taiwan. But Xi Jinping, China’s most assertive leader in decades, has ramped up rhetoric and aggression against the democratic island – fueling tension across the strait and raising concerns for a military confrontation.

Speaking at a concert ahead of Taiwan’s national day on October 10, Lai noted the two governments’ different political roots, delivering a lesson in comparative history.

“Recently, our neighbor, the People’s Republic of China, just celebrated its 75th birthday on October 1. In a few days, the Republic of China will celebrate its 113th birthday,” Lai said, receiving to a round of applause from crowds in a stadium in Taipei.

“Therefore, in terms of age, it is absolutely impossible for the People’s Republic of China to become the motherland of the people of the Republic of China. On the contrary, the Republic of China may actually be the motherland of citizens of the People’s Republic of China who are over 75 years old.”

Monday is the last day of China’s week-long national day holiday and the Chinese government has not responded to Lai’s remarks.

But his comments have already drawn criticism from politicians in Taiwan’s largest opposition party, the Kuomintang (KMT), which has long accused Lai’s ruling Democratic Progressive Party of needlessly stoking tensions with China.

“President Lai has deliberately mentioned ‘People’s Republic of China’ and his ‘motherland theory’ to incite political confrontation on both sides of the Taiwan Strait,” Ling Tao, a city councillor from the KMT, wrote in a post on Facebook.

The KMT are the political successors of the Nationalists who fled to Taiwan, ruled the island under martial law for decades and long harbored ambitions to one day restore the Republic of China on the mainland. They later joined Taiwan’s evolution into a democracy and have made significant ideological transformations, including favoring closer ties with Communist China.

Leaders in both Taipei and Beijing have long used their national day addresses to send a message across the Taiwan Strait.

Last week, on the eve of the PRC’s 75th birthday, Xi reiterated his pledge to achieve “reunification” with Taiwan.

“It’s an irreversible trend, a cause of righteousness and the common aspiration of the people. No one can stop the march of history,” Xi told a state banquet at the Great Hall of the People in Beijing, according to state-run news agency Xinhua.

“Taiwan is China’s sacred territory. Blood is thicker than water, and people on both sides of the strait are connected by blood,” he said, vowing to resolutely oppose “Taiwan independence” separatist activities.

Beijing has labeled Lai a “dangerous separatist,” and tensions have ratcheted up over the last five months since Lai’s inauguration in May, during which he called on China to cease its intimidation of Taiwan.

Lai is expected to give his first national day address as Taiwan’s president on Thursday.

This post appeared first on cnn.com

It is almost impossible to remember life in Israel before Hamas launched its brutal October 7 attacks a year ago, killing more than 1,200 people and kidnapping more than 250 others. There is little point, because that life is gone for good. And not just because more than 100 hostages are still captive.

The same is true beyond Israel’s borders.

Israel, its enemies and allies are all harbingers and painful witnesses to a remaking of the region’s diplomatic and political architecture on a scale that could rival the upheavals of the Arab-Israeli conflict a half-century ago.

The post-October 7 changes are both inevitable and, in their current chaotic form at least, preventable. The civilian cost is mounting when diplomacy might have saved lives.

A year ago it seemed the political architecture of the region was on the cusp of significant change. Propelled by US incentives, Saudi Arabia and Israel seemed closer than ever to a historic normalization of relations. Diplomacy and the deft skills needed to stitch such a complex deal together were in the ascendency.

But the prospect of approaching peace and prosperity evaporated as Hamas surged through the Gaza border fences at sunrise that Saturday morning. Butchery was afoot.

Irrespective of whether Hamas leader Yahya Sinwar was calculating he could torpedo normalization and push the Palestinian cause ahead of regional priorities for peace and economic integration, in the short term he succeeded.

I can remember, with gut-churning clarity, the smell of rotting human flesh as we entered Kfar Aza, about 800 yards from the Gaza Strip. It was October 10, and Major General Itai Veruv of the Israel Defense Forces (IDF) was leading the first international press access to see the devastation of Hamas’ attacks.

He stood at the gates, quoting General Eisenhower when he reached the Nazi death camps in World War Two: “The first thing he said was bring the press here to see.”

Over the past year Israel has struggled to keep the world focused on those nation-changing events of that bloody weekend.

For the first time, many Israelis realized their state was no longer the safe haven for Jews they had always believed it to be. The idea that whatever prejudice and persecution they may face around the world, in Israel they had sanctuary, was destroyed.

What emerged that first week as a scramble to seal the Gaza border and chase down remaining Hamas cells inside Israel soon manifested as a red mist of revenge and retribution against the attackers, and anyone near them.

Israelis’ feelings of vulnerability haven’t gone, while national rage has been refined into a steely logic of regional deterrence, manifested by Israel’s right-wing Prime Minister Benjamin Netanyahu.

He has interwoven his own political survival, in part to escape accusations he failed to stop Hamas’ attacks, with bombastic new tactics shredding the old rule book and its red lines that previously prevented regional escalation.

It is being called “escalation for de-escalation,” but as October 7, 2024, arrives, de-escalation, and any form of day after plan from Netanyahu, are absent.

The Jewish state’s relations with US President Joe Biden’s White House, its most important ally, are at their lowest ebb in a generation. Nearly 42,000 Palestinians in Gaza have been killed, many by US bombs and bullets in Israel’s hands, authorities in Gaza say. IDF killings and arrests of Palestinians, some of them US citizens, in the occupied West Bank are unsustainable for many of Israel’s European allies whom after a year of waiting are beginning to curb arms supplies.

But the pressures on Israel to rein in its survival instincts at a time when it is riven with deep political, religious, and maybe existential divisions are having little obvious traction.

Israel’s wiliest nearby adversary and Iranian mega-proxy Hezbollah – a blight on Lebanese post-civil war democracy – which began escalating cross-border rocket attacks the day after October 7, has undergone a lightening defenestration over the past few weeks. Its leader Hassan Nasrallah and many of his top commanders have been assassinated in Israeli air strikes, its forces partially crippled, ahead of Israel’s launch of its third ground war in Lebanon in the past half-century.

Hamas’ October 7 attacks, if not coordinated in detail with Iran, certainly had its blessing. The theocracy has been the Palestinian terror group’s biggest backer for decades, funneling money, military material and know-how. Iran vows to destroy Israel and chase its biggest ally the United States out of the region.

It uses pro-Palestinian messaging to enflame passions on the ‘Arab street’ in the region, most of whom are Sunni like the Palestinians, and most of whose leaders consider Iran, a Shia theocracy, at best untrustworthy, at worst an adversary. In this way Iran holds off regional rivals.

The past year has revealed the extent of its plans and co-opting of Shia communities to build up pro-Iranian militias. Yemen’s minority Houthis are no longer only anti-Saudi stooges for the Shia clerics in Tehran, but have turned their Iranian-supplied ballistic missiles and drones on Tel Aviv.

Iran has also, aided and fronted by the Houthis, begun blocking Red Sea commercial shipping – more than a thousand miles from Israel – on the pretext of supporting the Gazans.

Tehran’s Shia proxies in Iraq have also answered its calls and begun escalating drone attacks on Israel.

It is a multi-fronted war, escalating faster than would have ever seemed possible a year ago.

Back then rocket sirens in central Israel were not part of daily life. Today parents inside their home shelters in Tel Aviv scan cell phones for messages from their children, serving on the front lines as they too once did.

Each generation here is trained to fight in the defense of the nation; where the country divide is over how long to keep that fight going before switching to diplomacy. The reality is, the longer the escalation goes on, the less control the country and its prime minister will have over the outcome.

Potential regional partners like Saudi Arabia are now demanding a steeper and steeper diplomatic off-ramp for Netanyahu.

The normalization between Israel and the most powerful Gulf state that seemed so close before October 7, is for now out of reach, Netanyahu unwilling and too toxic to be a partner in the deal.

It was a deal that would have given Biden a legacy to be proud of; for Saudi’s Crown Prince Mohammed Bin Salman, MBS, the legitimacy and security he craves; and Netanyahu, an inoculation against a millennia of animus.

Saudi Arabia’s price now is an “irreversible path” to a Palestinian state, which is an anathema to Netanyahu, his extreme nationalist right-wing cabinet, and in the wake of October 7, even further beyond the pale for much of the rest of the country too.

Days before the anniversary, a veteran sage of UAE diplomacy, Anwar Gargash, foreshadowed the influential Gulf state’s direction of travel, saying “the era of militia with sectarian and regional dimensions has cost the Arabs dearly.”

An end to Iran’s proxy powerplays and a path to a Palestinian state. The question is how to get there from here, particularly as the butcher’s cleaver is ascendant over the diplomat.

For now, in the absence of successful peace talks, uncertainty is the new certainty.

This post appeared first on cnn.com

Oil and natural gas: Oil again above $75.00 on Friday

  • The oil price rose to $75.57 on Friday evening, reaching a new October high
  • On Friday, the price of natural gas rose to $3.14, a new four-month high

Oil chart analysis

The oil price rose to $75.57 on Friday evening, reaching a new October high. Last week’s bullish price jump was 10.00%. After the formation of a new high, oil meets resistance and pulls back to the $74.45 level. This week it is important for us to hold above the $74.00 support zone. A break below would signal a further pullback, and we would have to test the EMA 50 moving average and the $73.00 zone.

If the support is insufficient, we expect a further pullback to a new low. Potential lower targets are $72.00 and $71.00 levels. For a bullish option, the oil price needs to be held above the $74.00 support zone. From there, we can expect to see the initiation of a new bullish consolidation. Potential higher targets are $76.00 and $77.00 levels.

 

Natural gas chart analysis

On Friday, the price of natural gas rose to $3.14, a new four-month high. The formation of this high was soon followed by a strong bearish impulse and a fall to $2.98. The price is again below $3.00 and it closed there at the end of the trading day. Despite the strong bearish consolidation, if we manage to stay above $2.95 last week’s support zone, we can hope for a new bullish consolidation.

Potential higher targets are $3.05 and $3.10 levels. For a bearish option, we need a negative consolidation below $2.95. In that zone, we will try to get support from the EMA 200 moving average. This time, we need an impulse below and the formation of a new low. Potential lower targets are $2.90 and $2.85 levels.

 

The post Oil and natural gas: Oil again above $75.00 on Friday appeared first on FinanceBrokerage.

The dollar index rose above 102.50 after Friday’s top news

  • On Friday, the dollar index rose to 102.68, forming a new October high

Dollar index chart analysis

On Friday, the dollar index rose to 102.68, forming a new October high. Positive news for NFP, The unemployment rate and Average Hourly Earnings influenced us to see a strong bullish impulse from 101.85 to 102.60. At the end of the day, the index stopped at 102.48.

During this morning’s Asian trading session, the movement was in a narrow range of 102.40-102.60. The market is very calm for now, and we will probably see more volatility on the chart only during the US session. An impulse to 102.80 would be an excellent sign that we continue on the bullish side. After that, we expect the dollar index to reach 103.00 levels. The previous time we were at that level was a month and a half ago.

 

The index could take a step lower this week to consolidate better

For a bearish option, we need a negative consolidation and a drop below the 102.40 level. Thus, we move to a new daily low and confirm the bearish pressure on the dollar. After that, we should see a further pullback to 102.20. There, we will come across the EMA 50 moving average, which was stable support for us last week. This time, we are looking for a break below and a continuation of the path to the bearish side. Potential lower targets are 102.00 and 101.80 levels.

This week, the volume of important economic news is lower. Tomorrow, RBNZ plans to cut interest rates from 5.25% to $4.75, later in the US session, US Crude Oil Inventories, 10-year Note Auction, and FOMC Meeting Minutes. The FOMC meeting could affect the larger movements of the dollar index. Hints of future monetary policy: The interest rate cut by the Fed is the most important report for the US currency. Friday’s news showed that the US economy is stable. That should be a good sign that the Fed should continue to cut interest rates to keep pushing the US economy.

 

The post The dollar index rose above 102.50 after Friday’s top news appeared first on FinanceBrokerage.

EURUSD and GBPUSD: New week, new targets and prices

  • Last week, we saw a drop in EURUSD to 1.09514 levels on Friday
  • During this morning’s Asian trading session, GBPUSD encountered resistance at the 1.31350 level

EURUSD chart analysis

Last week, we saw a drop in EURUSD to 1.09514 levels on Friday. The Euro has been under pressure all week, culminating on Friday. Positive news from the US market caused the pair to retreat to a 50-day low. During this morning’s Asian trading session, the movement took place in the 1.09640-1.09780 range. The slight negative picture is because we are below the daily open level of 1.09750.

EURUSD will have to move back above if it plans to initiate a new bullish consolidation. A further recovery to the 1.10000 level moves us to test the EMA 50 moving average. Going above, we get support, and after a week, we will be again above EMA 50. Potential higher targets are 1.10200 and 1.10400 levels. For a bearish option, we need a continuation of the EURUSD pullback below the 1.09500 level. Thus, we move to a new October low and continue the previous bearish consolidation. Potential lower targets are 1.09400 and 1.09200 levels.

 

GBPUSD chart analysis

During this morning’s Asian trading session, GBPUSD encountered resistance at the 1.31350 level. Last week did not favor the pound as it retreated to 1.30698. Now, at the start of today’s EU session, we see support at 1.31000 and expect to hold here before continuing the recovery. Potential higher targets are 1.31200 and 1.31400 levels.

Additional resistance for GBPUSD could be in the 1.31250 zone in the EMA 50 moving average. If the pound fails to stabilize, the bearish pressure will intensify. By falling below the 1.31000 level, we will form a new daily low and thus confirm that we are still on the bearish side. Potential lower targets in 1.30800 and 1.30600 levels.

 

The post EURUSD and GBPUSD: New week, new targets and prices appeared first on FinanceBrokerage.

USDCHF and USDJPY: New Weekly Targets and Prices

  • During this morning’s Asian trading session, USDCHF is finding support at the 0.85750 level
  • Last week, USDJPY rose to 149.13 to a new 50-day high

USDCHF chart analysis

During this morning’s Asian trading session USDCHF is finding support at the 0.85750 level. The pair has returned above the daily open level and is now on the positive side. We expect to move above the 0.86000 level soon and form a new daily high. Bullish momentum is also growing, and everything points to further growth. Potential higher targets are 0.86200 and 0.86400 levels.

For a bearish option, we need a negative consolidation and pullback of USDCHF below this morning’s support zone. With a break below, we are going to a new daily low. Such a picture indicates that the pair has no strength to recover and that we are turning to the bearish side. Potential lower targets are 0.85600 and 0.85400 levels.

 

USDJPY chart analysis

Last week, USDJPY rose to 149.13 to a new 50-day high. During this morning’s Asian session, the pair made a slight step down to support at the 148.40 level. It is now putting pressure on this zone, and we are monitoring the situation to see if it will hold. If it holds and we return above the daily open level, USDJPY could start a new bullish consolidation. After that, we expect a visit to last week’s high and a continuation above at a new high.

Potential higher targets are 149.00 and 149.50 levels. For a bearish option, we need a negative consolidation and a drop below this morning’s support zone. By descending to a new daily low, we confirm the transition to the bearish side. Strengthening bearish momentum would have the effect of pulling USDJPY to a new low. Potential lower targets are 148.00 and 147.50 levels. Possible support is the EMA 50 moving average in the 147.50 zone.

 

The post USDCHF and USDJPY: New Weekly Targets and Prices appeared first on FinanceBrokerage.

AUDUSD and AUDNZD: New Targets and Prices for Monday

  • Last Friday, AUDUSD retreated to the 0.67856 level, forming a new 15-day low there
  • Last week, AUDNZD was in a strong bullish trend from 1.08694 to 1.10500

AUDUSD chart analysis

Last Friday, AUDUSD retreated to the 0.67856 level, forming a new 15-day low there. During this morning’s Asian trading session, the pair attempted a bullish consolidation but stopped at the 0.68100 level. The new pressure in that zone did not allow us to continue with the recovery, but we were again forced to turn to the bearish side. The pair is now at 0.67925, returning below the daily open level.

With this move, we will test last week’s low and form this week’s new low. Potential lower targets are 0.67800 and 0.67700 levels. For a bullish option, AUDUSD must first find a new support level. After that, we can expect the start of bullish consolidation. The growth above 0.68100 takes us to a new daily high and confirms the bullish momentum. Potential higher targets are 0.68200 and 0.68300 levels.

 

AUDNZD chart analysis

Last week, AUDNZD was in a strong bullish trend from 1.08694 to 1.10500. During this morning’s Asian trading session, the pair continued to grow, forming a new October high at the 1.10534 level. For now, at the beginning of the EU session, we see a slight pullback to 1.10480, but we remain in the bullish channel. We will wait for new support before proceeding again to the bullish side.

Potential higher targets are 1.10600 and 1.10800 levels. For a bearish option, we need a negative consolidation to the daily open level. Failure of the AUDNZD to hold there will move it below to the downside. After that, the pair will be under pressure to start a further pullback to new support. Potential lower targets are 1.10200 and 1.10000 levels. The first possible support is the EMA 50 moving average in the 1.10300 zone.

 

The post AUDUSD and AUDNZD: New Targets and Prices for Monday appeared first on FinanceBrokerage.

On the back of one of the major FII selloffs seen in recent times, the markets succumbed to strong corrective pressure through the week and ended on a very weak note. The Nifty 50 remained under selling pressure; at no point in time did it show any intention to stage a technical pullback. While the weakness persisted in all five trading sessions, the trading range also got wider, with the Nifty oscillating in an 1167-point range over the past five days. There was a resultant rise in the volatility as well; the IndiaVIX surged by 18.10% to 14.13 on a week-on-week basis. The benchmark Nifty 50 closed with a deep weekly cut of 1164.35 points (-4.45%).

We have evident reasons, like the money flowing out of the Indian markets to the Chinese markets, geopolitical tensions in the Middle East, and SEBI announcing changes in the derivatives trading landscape, to write about when we talk and assign reasons for market declines. However, we also need to take a deeper look at the technical perspective. The Nifty was highly deviated from its mean; at one point in time, the index was trading almost 10% above its 50-week MA. So even the slightest reversion could have seen violent retracements from higher levels. Despite the kind of fall we have seen over the past few days, the Nifty has not even tested the nearest 20-Week MA, which currently stands at 24441. This speaks a lot about the extent to which the markets had run up much ahead of their curve.

The derivatives data suggest that the market may attempt to find support at the 25,000 level. Besides being a psychologically important level, 25,000 strikes not only hold the highest PUT OI as of now, but has a very negligible existence of Call OI. So, even if we continue with an overall downtrend, some minor technical rebound from the current level cannot be ruled out. By and large, a stable start is expected for the week, and the levels of 25300 and 25450 shall act as resistance. The supports are expected to come in at 24910 and 24600.

The weekly RSI is 59.70; it has crossed under 70 from an overbought zone, which is bearish. It remains neutral and does not show any divergence against the price. The weekly MACD looks like it’s being on the verge of a negative crossover, as evidenced by a narrowing Histogram. A large bearish candle that emerged hints at the kind of strong selling pressure that was witnessed throughout the week.

The pattern analysis shows that despite the kind of decline that we have seen, the primary trend is still intact. On the daily chart, we have tested the 50-DMA; on the weekly chart, we have not even tested the nearest 20-Week MA. So long as we are above the 24000-24400 zone, there is little chance of the primary uptrend getting disrupted.

All in all, from a short-term technical lens, the behavior of Nifty vis-à-vis the levels of 25000 would be very crucial to watch. If the Nifty has to find some ground and put a base for itself in place, it will have to keep its head above the 25000 level. Any violation of this level on a closing basis would invite more weakness for the index. Then, the levels of 20-week MA may get tested over the coming days. While navigating this turbulent phase, it is recommended that we cut down on highly leveraged positions and stay invested in low-beta defensive pockets. Though it’s important to stay mindful when managing risks, a highly cautious approach is advised for the coming week.


Sector Analysis for the Coming Week

In our look at Relative Rotation Graphs®, we compared various sectors against CNX500 (NIFTY 500 Index), which represents over 95% of the free float market cap of all the stocks listed.

Relative Rotation Graphs (RRG) show Nifty IT, Pharma, Consumption, Services Sector, and FMCG indices are inside the leading quadrant. However, a couple of them are showing some paring of their relative momentum. However, broadly speaking, these groups may show some resilience and may relatively outperform the broader markets.

The Nifty Midcap 100 Index has rolled inside the weakening quadrant. Besides this, the Nifty Auto is also inside the weakening quadrant and can be seen rolling towards the lagging quadrant.

The Nifty PSE Index has rolled inside the lagging quadrant. Along with the Infrastructure Index which is also inside the lagging quadrant, it is set to relatively underperform the broader markets. The Nifty Bank, Energy, Realty, Metal, PSU Bank, Financial Services, and Commodities Index are also inside the lagging quadrant. However, they all are seen improving their relative momentum against the broader Nifty 500 index.

The Nifty Media Index is the only one inside the improving quadrant; however, it is seen rapidly giving up on its relative momentum against the broader markets.


Important Note: RRG charts show the relative strength and momentum of a group of stocks. In the above Chart, they show relative performance against NIFTY500 Index (Broader Markets) and should not be used directly as buy or sell signals.


Milan Vaishnav, CMT, MSTA

Consulting Technical Analyst

www.EquityResearch.asia | www.ChartWizard.ae

Glance up while strolling through parts of downtown Hong Kong and, chances are, you’ll notice the glassy black lens of a surveillance camera trained on the city’s crowded streets.

And that sight will become more common in the coming years, as the city’s police pursue an ambitious campaign to install thousands of cameras to elevate their surveillance capabilities.

Though it consistently ranks among the world’s safest big cities, police in the Asian financial hub say the new cameras are needed to fight crime – and have raised the possibility of equipping them with powerful facial recognition and artificial intelligence tools.

That’s sparked alarm among some experts who see it as taking Hong Kong one step closer to the pervasive surveillance systems of mainland China, warning of the technology’s repressive potential.

Hong Kong police had previously set a target of installing 2,000 new surveillance cameras this year, and potentially more than that each subsequent year. The force plans to eventually introduce facial recognition to these cameras, security chief Chris Tang told local media in July – adding that police could use AI in the future to track down suspects.

Tang and the Hong Kong police have repeatedly pointed to other jurisdictions, including Western democracies, that also make wide use of surveillance cameras for law enforcement. For instance, Singapore has 90,000 cameras and the United Kingdom has more than seven million, Tang told local newspaper Sing Tao Daily in June.

And, some critics say, what sets Hong Kong apart from other places is its political environment – which has seen an ongoing crackdown on political dissent, as it draws closer to authoritarian mainland China.

Following unprecedented and often violent anti-government protests that rocked the city in 2019, local and central authorities imposed sweeping national security laws that have been used to jail activists, journalists and political opponents, and target civil society groups and outspoken media outlets.

Hong Kong’s leaders have said the laws are needed to restore stability after the protests in the nominally semi-autonomous city, and argue their legislation is similar to other national security laws around the world.

“The difference is how the technology is being used,” said Samantha Hoffman, a nonresident fellow at the National Bureau of Asian Research who has studied China’s use of technology for security and propaganda.

Places like the United States and the UK may have problems with how they implement that technology, too – but “this is fundamentally different… It has to do specifically with the system of government, as well as the way that the party state… uses the law to maintain its own power,” said Hoffman.

What this means for Hong Kong

Hong Kong has more than 54,500 public CCTV cameras used by government bodies – about seven cameras per 1,000 people, according to an estimate by Comparitech, a UK-based technology research firm.

That puts it about on par with New York City and still far behind London (13 per 1,000 people), but nowhere near mainland Chinese cities, which average about 440 cameras per 1,000 people.

Fears of mainland-style surveillance and policing caused notable angst during the 2019 protests, which broadened to encompass many Hong Kongers’ fears that the central Chinese government would encroach on the city’s limited autonomy.

Protesters on the streets covered their faces with masks and goggles to prevent identification, at times smashing or covering security cameras. At one point, they tore down a “smart” lamp post, even though Hong Kong authorities said it was only meant to collect data on traffic, weather and pollution.

At the time, activist and student leader Joshua Wong – who is now in prison on charges related to his activism and national security – said, “Can the Hong Kong government ensure that they will never install facial recognition tactics into the smart lamp post? … They can’t promise it and they won’t because of the pressure from Beijing.”

Across the border, the model of surveillance that protesters feared is ubiquitous – with China often celebrating the various achievements of its real-time facial recognition algorithms, and exporting surveillance technology to countries around the world.

According to an analysis by Comparitec, eight of the top 10 most surveilled cities in the world per capita are in China, where facial recognition is an inescapable part of daily life – from the facial scans required to register a new phone number, to facial recognition gates in some subway stations.

During the Covid-19 pandemic, the government mandated a QR “health code” to track people’s health status, which in some places required facial scans.

But the technology has also been used in more repressive ways.

In the far-western region of Xinjiang, Beijing has used cameras to monitor members of the Muslim-majority Uyghur population. And when unprecedented nationwide protests broke out in late 2022 against the government’s strict Covid policies, police used facial recognition along with other sophisticated surveillance tools to track down protesters, The New York Times found.

“(China’s) public security surveillance systems … tend to track lists of particular people, maybe people with a history of mental illness or participation in protests, and make a note of people who are marked as being troublesome in some way,” Hoffman said.

The systems then “track those specific people across the city and across its surveillance network.”

“I think it’s fair to anticipate that the use of CCTV and facial recognition technology in Hong Kong will begin to look a lot like those in mainland China over time,” she said.

Hong Kong police have argued the cameras help fight crime, pointing to a pilot program earlier this year of 15 cameras installed in one district. Already, those cameras have provided evidence and clues for at least six crimes, Tang told Sing Tao Daily – and police will prioritize high-risk or high-crime areas for the remaining cameras.

The first five months of this year saw 3% more crimes than the same period last year, Sing Tao reported.

When considering AI-equipped cameras, “the police will definitely comply with relevant laws,” the force added.

Steve Tsang, director of the SOAS China Institute at the University of London, warned that the new cameras could be “used for political repression” if they are employed under the “draconian” national security law.

Unless authorities assure the public that the cameras won’t be used for that purpose, “this is likely to be a further step in making Hong Kong law enforcement closer to how it is done on the Chinese mainland,” he said.

How to regulate facial recognition

Other experts argued it’s far too soon to say what the impact will be in Hong Kong, since authorities have not laid out in detail how they would use the technology.

“Hong Kong law doesn’t, in all measures, mirror what happens in mainland China,” said Normann Witzleb, an associate professor in data protection and privacy at the Chinese University of Hong Kong,

But that’s why it’s all the more important for authorities to address a raft of yet-unanswered questions, he said.

For instance, it remains unclear whether Hong Kong will deploy live facial recognition that constantly scans the environment, or whether the tech will only be applied to past footage when certain crimes occur or when legal authorization is granted.

Witzleb also raised the question of who would have the power to authorize the use of facial recognition, and what situations may warrant it. Would it be used to prosecute crime and locate suspects, for example – or for other public safety measures like identifying missing people?

And, Witzleb added, will police run the technology through their existing image databases, or use it more broadly with images held by other public authorities, or even publicly available imagery of anyone?

“It’s important to design guidelines for those systems that take proper recognition of the potential benefits that they have, but that also acknowledge they’re not foolproof, and that they have the potential to interfere with (people’s) rights in serious ways,” Witzleb said.

Regardless of how facial recognition might be used, both Hoffman and Witzleb said the presence of that technology and the increased number of security cameras may make Hong Kongers feel less free under the ever-watchful eye of the police.

“When you feel like you’re being monitored, that affects your behavior and your feelings of freedom as well,” Hoffman said. “I think that there’s an element of state coercion that doesn’t need to have to do with the effectiveness of the technology itself.”

This post appeared first on cnn.com