Weekend Box: Pakistan Elections, Facebook Reaps Dividends & more
Welcome to The Weekend Box, Audley’s weekly round-up of interesting or obscure political, business and cultural news from around the world.
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PAKISTAN: WILL PTI PIP RIVALS TO THE POST?
Another country, another election. This time, Pakistan, and as The Weekend Box ‘goes to press’, the results are still emerging. Currently, less than half of the seats for the national and provincial assemblies have been announced, yet so far it looks like a tight race. Independents mostly affiliated with Imran Khan’s PTI party currently lead, ahead of Nawaz Sharif’s PMLN and Bilawal Bhutto Zardari’s PPP.
Khan is in prison, convicted of selling gifts given to him while serving as prime minister. His supporters say the charges were politically motivated, brought about by the invisible hand of the military, in cahoots with a biddable judiciary. Khan has a formidable following, especially among younger voters, who make up the biggest block of the electorate: of Pakistan’s 128m electorate, 44% are aged between 18-35. Banned from running as a party after Khan’s conviction and their protests in response, the PTI candidates stood as independents. Results so far suggest they, and the imprisoned Khan, have won popular support.
That support is at odds with that of the military, who previously backed Khan but now favour Nawaz Sharif, who seeks a fourth term as prime minister. Back in the last election, in 2018, he was the one in prison, convicted of corruption charges that his supporters also claimed to be politically motivated. If drama’s your thing, you can’t beat Pakistani politics.
The elections have been disrupted in other ways and may yet be found to have been significantly compromised. Terrorist attacks, firstly in Balochistan as claimed by ISIS, have attempted to deter voters. Citing security concerns, the military cut mobile networks and the internet has been severely disrupted too. This interfered with election management systems, hence the delayed results from Thursday’s polling.
Whatever the results, those elected face multiple challenges, most pressingly an economic crisis, with Pakistan’s most recent $3bn bailout from the IMF expiring in three weeks.
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FACEBOOK REAPS DIVIDENDS AT 20
This week, Facebook marked its 20th anniversary. In the past two decades, the social media platform has changed Silicon Valley, the global technology sector, and even the way society works (for better or worse) in myriad ways.
Despite years of generating headlines, Mark Zuckerberg, the founder of Facebook, still has ways of surprising. The latest big news out of Meta, the parent company of Facebook, Instagram, and WhatsApp, is its plan to issue its first ever dividend.
The cash dividend of $0.50 per share will amount to a big payday for significant investors, ranging from institutions like Vanguard and Blackrock, to Zuckerberg himself. The founder stands to make $700m from the dividend.
It represents a departure for the norm among large, publicly traded tech companies, who tend to use profits to re-invest in the company rather than for dividends or buybacks. Meta itself has tended to hold on to large cash reserves to acquire other companies or fund research and development.
The investor community saw the move as a signal that Meta is now a ‘grown-up’ company, a far cry from the startup dreamed up by Zuckerburg in his Harvard dorm. Needless to say, investors absolutely loved the move: Meta’s share price shot up more than 20% after the announcement, driven by the expectation of many more dividends to come.
US tech stocks in general are enjoying a positive start to 2024. The S&P 500, which has significant tech sector weighting, hit a fresh record this week. After a tricky 18 months for the sector, the tentative signs are that growth is returning to Big Tech.
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A HOUSE DIVIDED OVER IMMIGRATION
President Biden has blamed Donald Trump for a controversial bipartisan immigration bill being blocked in the Senate, scuppering billions of assistance to Ukraine and Israel in the process. However, politicians on both sides of the aisle believe the problem is the legislation itself.
The bill included powers expediting the asylum review process and enabling the president to shut down the US-Mexico border once crossings exceeded a set limit. A combined $74bn of military assistance to Ukraine and security assistance to Israel were wrapped up in the legislation, in addition to $10bn of humanitarian aid for Ukraine, Gaza, and the West Bank.
Some Republicans believe the immigration legislation was insufficient. Meanwhile, the bill has divided the Democrats, with Rep. Ocasio-Cortez arguing the bill would contribute “to an even worsening border crisis.”
Elsewhere, you could argue there is a bipartisan consensus that the bill is doomed to fail anyway. Democratic Rep. Omar doubted it would make it to a Senate vote, while her Republican counterparts have reportedly declared it will be ‘dead on arrival’ in the House.
President Biden has accused his two-time rival Trump of ‘intimidating’ Republican lawmakers into voting against the bill. Trump spokeswoman Karoline Leavitt has hit back, accusing Biden instead of undoing Trump’s work to create “the most secure border in American history.”
Notably, on taking office, President Biden retained a Trump-era statute that enabled US authorities to swiftly expel migrants at the border, which Human Rights Watch had previously criticised. Policies implemented after this statute expired were also criticised by some Democrats, who claimed they violated international refugee law.
After the Biden administration promised a more humane approach to immigration, the bill will be yet another betrayal to some, and further damage to the president’s reputation going into November’s elections.
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IT’S NOT ALL FUN & GAMING
The Gaming industry is booming, if we are to believe the headlines.
The industry has enjoyed strong sales, a year of major releases, and this week Disney added to the boom with a $1.5bn investment in Fortnite maker Epic Games. Bob Iger, the CEO of Disney, described the deal as the “biggest entry ever into the world of games,” after he announced a sharp rise in profits and a hefty dividend for shareholders at the company.
Disney is not the only titan betting their future on gaming. The end of 2023 saw an M&A goldrush in the sector, culminating in Microsoft’s $69bn acquisition of Activision Blizzard, the American company known for World of Warcraft and Call of Duty.
While it has been a year of big releases and deals, this has been a double-edged sword for its workforce. Behind the rosy headlines, the industry has been hit by 6,000 layoffs across hugely successful brands such as Bungie, the aforementioned Epic Games, Activision Blizzard, and Xbox. Much to the ire of workers, what hasn’t been cut is CEO bonuses. This prompted many to share quotes from former Nintendo CEO Satoru Iwata online who famously cut his own pay by half to avoid lay-offs during a period of turbulence.
Many argue that redundancies in the sector are the natural conclusion of aggressive M&A strategies and necessary cost-cutting, while others point to the Covid gaming bubble bursting. Unsurprisingly, with people confined to their homes during the pandemic, there was an explosion of interest in video games and in turn an increase in hires that have now petered out. This is not the only challenge; with AI set to have a significant impact on the efficiency of game development, what the future holds for the industry’s talent is unclear.
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OLYMPICS GIVE PARIS A RUN FOR THEIR MONEY
Hosting a major, multi-million-euro international event which sees hundreds of thousands of people descend on a city, in what can only be described as a logistical nightmare, is never simple – as Paris’ 2.2 million residents are learning.
Having already been ordered to work from home during the Olympics and Paralympics, which run July 24th-September 8th, locals have now been advised by the government not to order any home deliveries or move house during the Games.
This is the latest in a series of unfortunate incidents blighting the Olympic run-up. After initially announcing that public transport during the Games would be completely free, the transport authority – presumably realizing the missed opportunity – then announced that it would, in fact, be double normal prices.
Security maps have been described as ‘so complicated’ that residents fear they will be unable to move far from their homes for the duration. Even the secretary general of the police union Alliance Police Nationale has stated publicly that the police are in the dark about proceedings for the Games.
Perhaps more important than these logistical missteps is the ongoing investigation into the legality of the 270,000-euro pay of the committee President, Tony Estanguet. This is now the third corruption inquiry faced by the committee, two other members of which stand accused of embezzlement, misappropriation of public funds, and favouritism.
In response to the negative sentiment expressed by his fellow countrymen about the looming Games, Estanguet blamed the French tendency to ‘look at what is not going well [and] concentrate on our weaknesses.’ So, to the good news: the Olympic medal designs have been revealed and will feature fragments of iron removed from the Eiffel Tower during refurbishments. Presumably the Ethics committee will be including this innovative scrap metal recycling in their ESG reporting.
And that’s it for this week. I hope you found something of interest that you might want to delve into further. If so, please get in touch at cwilkins@audleyadvisors.com.
For now, that’s The Weekend Box officially closed.