From Zimbabwe, Kenya, To Madagascar Oil, China and India
Zimbabwe got a new twist. CNN reports Mugabe decides not to atten the submit to be held in Zambia, its neighbour. However, the opposition (Tsvangirai) is attending. This will give the Tsvangiraia great opportunity to sell his plan of stabilization and strengthens Tsvangirai’s edge both internationally as well as domestically.
The instability in Zimbabwe affects copper’s prices. However, the copper price has been receding from its historical high. This Zimbabwe episode will provide a support price level to copper. So, this price will probably slow down.
Further down, Sino Union Petro & Chemical secured an oil field with Madagascar, expected to be worth 2B barrels. China will own 50% of the venture.
Chinese oil exploration firms have been trying to secure sites overseas with little success. This is a firt major break not only for them, but also to Madagascar as well. Madagascar has not produced oil for 60 years, reports Reuters!
This company is not traded in LSE nor NY. It is traded in HK only.
This will also strench India’s resources as well. Although India is not in as an urgent need as China in terms of resources. Over the years, China is slowly moving in East Africa (more so than Africa in general), the traditinoally perceived sphere of influence by India. Not that India has navy bases all over the place, but it has a lot of migrants and control a big portion of trade in East Africa. It will only be a matter of time for India to express its security concern not only about the Himalaya border and Parkistan, but also about pan India Ocean security issues with China. These oil exploration companies will have to learn that getting listed in London and NY helps them mitigate political risks.
For India, issues such as Kenya and Zimbabwe will have to become the leverage points for it to enter the stage. It is probably too late for this episode. But next time.
