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Friendship or leverage: Why is Xi Jinping going to North Korea?

Beijing is trying to reassert influence over a strategically vital yet deeply unpredictable partner.

South Korean stock volatility increases concerns about leveraged investing

GOP's $70 billion immigration package remove Democrats' leverage to reform enforcement

Democrats are set to lose their leverage for reining in President Trump's deportation force as Republicans prepare to send him a bill this week funding immigration enforcement agencies through the remainder of his term.

Putin’s Pakistan puzzle

LAST week, Russian President Vladimir Putin talked on several geopolitical issues in St Petersburg, which also define Moscow’s approach to China, India and Pakistan. The most interesting statement he made was that he does not believe Pakistan was under the control of China; he said that Pakistan is a large country that has multifaceted ties with different states. Perhaps he was trying to justify Moscow’s recent defence-related talks, which the Taliban regime’s defence minister, Mullah Yaqoob, used as a counter-response to the Pakistani air strikes inside Afghanistan. Putin’s message between the lines was that, as Pakistan has multifaceted ties with China, the US, and even Russia, Moscow takes the same approach in engaging with nations. After all, Russia is the only country in the world that has recognised the Taliban regime. There is little doubt that Pakistan has found its geopolitical strength through cultivating a multi-vector approach and hardly portrays itself as a passive client in its relations with the US or any other power. But every policy has two sides, and nothing comes without a cost. Maintaining a strategic equilibrium requires winning and maintaining trust at a certain level with divergent partners. For instance, Pakistan-China relations, which Putin mentioned, have entered a new domain. Formally, this became evident on the occasion of the 75th anniversary of bilateral relations between the two countries, when Pakistan’s civilian and military leadership visited Beijing and signed several MoUs. This speaks volumes: Sino-Pak relations have entered a critical new strategic phase, with these ties deepening. China is increasingly seeking to keep Pakistan firmly within its sphere of influence, shifting away from purely economic projects like CPEC towards enhanced defence and security cooperation. CPEC, which was once central to their bilateral relations, has become a lower priority, even in the context of counterterrorism cooperation. Ultimately, while China reaffirmed its commitment to provide a robust security shield, Pakistan remains responsible for its own internal economic stability and administrative reforms. While China offers significant guarantees of Pakistan’s national sovereignty, this transition creates a complex dilemma for Pakistan as it attempts to balance its ties with Western powers such as the US. Unlike Russia, China is playing more smartly to project itself as a major global power and to engage nations of the Global South through several initiatives, such as the Global Development Initiative, Global Security Initiative, Global Civilisation Initiative and Global Governance Initiative. While engaging nations in such initiatives, it develops bilateral frameworks of cooperation that bind countries into its broader political partnership. There should be no harm in this, but through such initiatives, China is challenging the existing Western political and security order without provoking direct confrontation. Pakistan has recently signed all the MoUs under these initiatives, which Beijing depicts as Pakistan agreeing to remain within its sphere of influence. This is the tricky part. A nation that maintains multifaceted relationships hardly follows such ideologically driven political initiatives. Putin finds Pakistan another window through which to engage and send messages to Washington. Russia also maintains multifaceted ties and is seeking to maintain equilibrium with China, India and Pakistan. However, what is common to China and Russia is the challenge posed by the US. As long as the US remains engaged in West Asia, both China and Russia benefit, as this increases their economic and political strength, while weakening US interests. Most importantly, President Donald Trump’s attention may not turn to Afghanistan, especially the Bagram base, which he has his eyes on. In this context, Pakistan is perceived as a US partner, but Beijing has its apprehensions. If Russia-Taliban cooperation deepens, the US might need to rethink Afghanistan’s status, including sanctions on Taliban assets and its counterterrorism strategy. However, one view is that Washington now has limited leverage, and that maintaining good ties with Pakistan remains its main avenue for influencing Afghan affairs. If not Cuba, or even after Cuba, Trump would certainly create an uproar around the Bagram base, and Russia is talking about a defence deal with the Taliban, even if initially it is related only to repairing old equipment under the May 27, 2026, agreement on “military-technical cooperation” signed between Russia and the Taliban. However, any defence deal with the Taliban will be viewed suspiciously, as a stronger Taliban could mean more terrorism in Pakistan. Though Russia is also concerned about terrorist networks in Afghanistan, it may prefer the broader strategic advantage. Paradoxically, Pakistan has gradually become important to Moscow for another reason — its proactive role in the ongoing mediation between Iran and the US. Putin finds Pakistan another window through which to engage and send messages to Washington. Russia has improved ties with Pakistan without endangering its core relationship with India. Yet, in recent years, Russia has cautiously courted Pakistan. Pakistan views Russia from a longer geopolitical perspective and knows that until Russia’s strategic and defence partnership with India weakens sufficiently, or India’s defence and strategic alliance with the US increases to a level that forces Moscow to review its India policy, Pakistan can afford to wait and see how this equilibrium is maintained. The perception is accurate that Pakistan is not fully under China’s control, and Beijing also wants to keep Pakistan within its sphere of influence. However, their strategic partnership will outlast economic collaborations, during which both sides will continue to pursue divergent policies. Pakistan will remain relevant to the US and Europe while maintaining close ties with West Asia, and China will continue to view these relations with suspicion. But, in the end, their strategic and geopolitical partnership will remain constant. Russia does not enjoy such privilege in India’s case. The writer is a security analyst. Published in Dawn, June 7th, 2026

World’s hottest market has Korea bulls reaching for protection

A wave of optimism over South Korean stocks is giving way to growing caution, as some investors hedge positions and pare back crowded trades on concerns that the rally has run too hot, too fast.Hedge fund Golden Horse Fund Management has trimmed exposure and added derivative protection, while M&G Investments has cut memory and foundry holdings to broaden out down the AI supply chain. A Bloomberg Intelligence analysis of options on the iShares MSCI South Korea ETF shows investors seeking protection against a decline. The fund tumbled 14% Friday in the US.The moves highlight the challenge facing global money managers. While investors remain upbeat about Samsung Electronics Co. and SK Hynix Inc., the two chip giants that powered Kospi’s more than 90% rise this year, many are becoming pickier about where to put new money and keeping cash ready for opportunities elsewhere.Friday’s selloff in US tech stocks, driven by fears of higher interest rates, shows how quickly popular trades can unwind once sentiment shifts. That risk could spillover into Korea once local markets open.“We’ve been trimming gross exposure at the margin and layering derivative protection over the last few weeks,” said Yi Ling Ong, managing partner at Golden Horse Fund. Several large IPOs, including a SpaceX listing this month, could lead to rotation as funds raise cash to participate, making it “prudent to hold some dry powder,” she said.131561937Over the past year, Korean stocks captured global attention as a combination of the AI boom and the government’s successful corporate reform propelled the index to new highs. Strong earnings potential continues to underpin bullish sentiment, but the extended rally has led to crowding in a few major players, leaving the market vulnerable to abrupt reversals. The benchmark tumbled 7% at one point on Friday.The caution is showing up in the derivatives market.“The debate isn’t whether the Kospi story remains attractive — it’s how to stay invested without giving back a portion of the gains,” said Tanvir Sandhu, global chief derivatives strategist at Bloomberg Intelligence. Options activity in the EWY ETF suggests investors are becoming more cautious, with demand shifting from upside exposure to downside protection, he said.Some investors are looking for opportunities beyond Samsung Electronics and SK Hynix, whose meteoric rise propelled them into the $1 trillion valuation club and helped Korea briefly overtake India as the world’s sixth-largest stock market.“The alpha lies lower down the value chain — in the picks-and-shovels of the picks-and-shovels,” said Vikas Pershad, portfolio manager at M&G, referring to companies that benefit from spending on AI infrastructure without being at the heart of the trade.Not Bearish To be sure, the rotation doesn’t signal investors turning bearish on Korea. Valuations remain cheaper than in rival tech hub Taiwan and investors say the market still offers one of the strongest AI-linked stories in global equities. At 8.6 times forward earnings, the Kospi trades below its five-year average of 10 times and is much cheaper than Taiwan’s benchmark, which trades at about 20 times, data compiled by Bloomberg show.Earnings upgrade cycle has also started to broaden. Excluding Samsung and SK Hynix, the rest of the Kospi is now expected to deliver more than 50% profit growth this year, up from just 20% in January, according to Golden Horse Fund. 131561965“The speed of the rally has been vertiginous but in this type of market I would rather let the rally continue,” said Rajeev De Mello, global macro portfolio manager at Gama Asset Management SA. “Exiting now will make it very difficult to re-invest later if the market doesn’t correct.”Still, foreign outflows have become a concern. Global funds have pulled a record $76 billion this year, selling in every session over the past month. While part of the retreat is due to technical limits on single-stock holding, the selling has been absorbed by more fickle retail investors — a dynamic that may heighten volatility.At the same time, some investors are growing wary of rising retail leverage. The concern is that popularity of leveraged ETFs and the planned weekly single-stock options could amplify swings in an already-volatile market. While the products are “really interesting” and show retail participation is growing, they also leave the market “in somewhat of a precarious position in case of a reversal,” Stephane Martin, head of derivatives institutional sales for Asia at Optiver, said at a panel discussion at Bloomberg’s Volatility Forum last week. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Naqvi takes CDF’s message to Tehran amid stalemate

• IRNA says ‘important message’ meant for Iran’s supreme leader • Interior minister receives instructions from PM before departure ISLAMABAD: Pakistan on Saturday stepped up efforts to break the impasse in the US-Iran dialogue, with Interior Minister Mohsin Naqvi arriving in Tehran carrying a message from Chief of Defence Forces Field Marshal Asim Munir for Iranian Supreme Leader Mojtaba Khamenei. Mr Naqvi was received by his Iranian counterpart Eskandar Momeni. Pakistan’s newly appointed ambassador to Iran, Imran Ahmad Siddiqui, was also present. The visit comes at a delicate moment in the diplomatic process that Pakistan has been facilitating for months, as indirect negotiations between Washington and Tehran have drifted into what diplomats describe as a fragile stalemate despite both sides continuing to publicly endorse diplomacy over renewed confrontation. Iran’s official news agency IRNA, quoting an informed source, reported that Mr Naqvi was carrying an “important message” from Field Marshal Munir for Mojtaba Khamenei. The source said the interior minister had held extensive consultations with Prime Minister Shehbaz Sharif and other senior officials before leaving for Tehran. The source further claimed that PM Shehbaz had given special instructions to Mr Naqvi regarding the future course of the Iran-US talks. The Prime Minister’s Office, meanwhile, said in a statement that PM Shehbaz had met the interior minister in Lahore and discussed his visit to Tehran. According to the official statement, Mr Naqvi briefed the prime minister on his recent engagements on the sidelines of the Shanghai Cooperation Orga­nisation conference in Bishkek, Kyrgyzstan. The two also held consultations on the Tehran visit, while the prime minister provided guidance for the discussions. Mr Naqvi had also met Mr Momeni in Bishkek. Diplomatic sources said Mr Naqvi’s mission was part of Pakistan’s efforts to prevent the collapse of a ceasefire arrangement that Islamabad helped broker earlier this year and to create space for the resumption of meaningful negotiations between Washington and Tehran. The ceasefire, reached in April after weeks of intense fighting involving Iran, the United States and Israel, remains formally in place but has been repeatedly tested by military incidents in and around the Gulf region. Recent exchanges involving US strikes on Iranian military assets and Iranian retaliatory actions have further complicated efforts to move negotiations beyond crisis management towards a more comprehensive political understanding. At the centre of the deadlock are disagreements over Iran’s enriched uranium stockpile, its enrichment programme, the future of sanctions, reopening of the Strait of Hormuz and regional security issues. While US President Donald Trump has repeatedly claimed that negotiations remain active and that progress is being made towards a deal, Iranian officials have struck a far more cautious tone. Iranian Foreign Minister Abbas Araghchi recently said there had been no tangible progress in the talks and that Tehran was still reviewing proposals conveyed through intermediaries. Diplomatic sources familiar with the process said both sides remained far apart on key questions, particularly Washington’s demand for substantial restrictions on Iranian enrichment activities and Tehran’s insistence that its right to peaceful enrichment remains non-negotiable. Complicating matters further is the Lebanon question, which Iranian officials increasingly view as linked to the broader diplomatic track. Tehran has repeatedly argued that any durable arrangement must address developments across all theatres of confrontation, including Lebanon, while Washington has sought to treat the Lebanon-Israel track separately from the nuclear and sanctions negotiations. Against this backdrop, Mr Naqvi’s discussions in Tehran are expected to focus not only on the state of the US-Iran talks but also on regional issues that continue to affect prospects for a settlement. Besides talks with Interior Minister Momeni, the Pakistani minister is expected to meet Foreign Minister Araghchi and President Masoud Pezeshkian. Meetings with parliament speaker Mohammad Bagher Ghalibaf and Secretary of Iran’s Supreme National Security Council Bagher Zolghadr are also expected, according to Iranian sources. The significance attached to the visit has fuelled speculation that Islamabad may be attempting to inject fresh momentum into a process that appeared to be losing traction after weeks of military incidents and diplomatic setbacks. Pakistan’s mediation role has drawn increasing international attention in recent months, with both Washington and Tehran publicly acknowledging Islamabad’s efforts and several European governments expressing support for the initiative. Lebanese army chief’s visit Meanwhile, in a related development that attracted attention in diplomatic circles, Lebanese Army Commander General Rodolphe Haykal left for Pakistan on Saturday on an official visit. The Lebanese Armed Forces announced that the visit was being undertaken at the invitation of General Haykal’s Pakistani counterpart, but did not disclose details of its agenda or duration. Officially, the trip is being described as part of ongoing military-to-military cooperation and discussions on training and institutional support. However, the timing of the visit has generated speculation because it coincides with Pakistan’s efforts to overcome obstacles in the US-Iran negotiations and follows renewed tensions in southern Lebanon. Lebanon has increasingly emerged as one of the factors complicating the broader diplomatic process. President Joseph Aoun has recently called for strengthening state authority and reducing the role of non-state armed groups, while Iranian officials have strongly rejected suggestions that Tehran uses Lebanon as leverage in its dealings with Washington. Iran has also linked progress in its discussions with the United States to developments on what it describes as other fronts of the conflict, including Lebanon. Western diplomats say the Lebanese armed forces are expected to play an important role in any future security arrangements in southern Lebanon and have therefore become an important part of regional stabilisation efforts. Published in Dawn, June 7th, 2026

Obama casts a long shadow on Iran bill

US President Donald Trump has spent years attacking his predecessor Barack Obama for what he called a giveaway to Iran. The image of "pallets of cash" became one of his favorite political talking points, a symbol of what he portrayed as weakness in dealing with Tehran.Yet the irony of the current moment is becoming harder to ignore. As negotiations to end the latest US-Iran confrontation stall, Iran is demanding access to billions of dollars in frozen assets, and the success of any deal may depend on whether Trump agrees to some form of financial relief. The president who built his Iran policy around rejecting Obama's approach may now find himself confronting the same reality that faced previous administrations -- diplomacy with Iran often comes with a price tag.Pay $12 billion now, and $12 billion laterAn indication of how central money has become to the negotiations came from Mohsen Rezaei, military adviser to Supreme Leader Ayatollah Mojtaba Khamenei, in an exclusive interview with CNN. According to Rezaei, the negotiations have reached a deadlock and the responsibility for breaking it lies squarely with Trump. He said Iran wants the release of $24 billion in frozen Iranian assets, with $12 billion to be made available immediately after an interim agreement is signed and another $12 billion at a later stage.Also Read | Iran says frozen funds key to progress in US talksRezaei termed the demand not a concession from Washington but as a test of American intentions. "If he wants to reach an agreement with Iran, this $24 billion is a test of trust that Iran wants to have with Trump," he told CNN. "This is our own money, not America's money."The significance of the demand extends beyond the amount involved. By publicly linking the prospects of peace to the release of frozen assets, Iran has effectively made financial compensation the central political hurdle in the negotiations.Trump's Obama problemFor Trump, the issue is not as much financial as deeply political. CNN reported that Trump has repeatedly instructed his team that any agreement with Iran must be viewed as stronger than the 2015 nuclear accord negotiated by Obama. Equally important, he wants to avoid anything that resembles the controversial payments that became a focal point of Republican criticism a decade ago.Throughout his political career, Trump has portrayed the Obama administration's handling of Iran as evidence of weak leadership. Recently, he revived his criticism of the Joint Comprehensive Plan of Action, or JCPOA, describing it as a horrible deal and insisting that any agreement he reaches will be far better. That political history now threatens to constrain his negotiating options. A deal that includes billions of dollars flowing to Iran could invite immediate comparisons with the very agreement he spent years denouncing.Also Read | Iran retains about 22% of missile stockpile, says TrumpWhat Obama actually didThe comparison is unavoidable because financial relief was also a major feature of the Obama-era approach. The JCPOA, finalized in 2015 after negotiations between Iran and the P5+1 powers, imposed strict limits on Iran's nuclear activities in exchange for sanctions relief. The agreement capped uranium enrichment, reduced centrifuge capacity and established what experts described as one of the most intrusive inspection regimes ever negotiated.The deal also coincided with the release of $1.7 billion to Iran, a figure that Trump and other critics frequently cited as evidence of appeasement. Critics argued that sanctions relief and financial compensation rewarded Iranian behaviour across the region.Supporters of the agreement took a different view. They argued that much of the money involved consisted of Iranian assets that had already belonged to Iran and that the deal successfully halted Tehran's progress toward a nuclear weapon while providing unprecedented transparency into its nuclear program.Former US Energy Secretary Ernest Moniz, who helped negotiate the agreement, told CNBC that the JCPOA's most important achievement was its extraordinary verification system. Arms control experts similarly maintain that the deal effectively constrained Iran's nuclear ambitions before it unraveled.Why the current situation is more difficultThe irony for Trump is that negotiations now are taking place under conditions far less favorable than those that existed in 2015. After the US withdrew from the JCPOA in 2018, Iran gradually breached many of the agreement's restrictions. It expanded uranium enrichment, accumulated a much larger stockpile of nuclear material and scaled back some transparency measures.Many think that any new agreement must address a more advanced Iranian nuclear programme and a more complicated political environment. There is also the added challenge of rebuilding trust after years of mutual escalation. That reality means economic incentives have become even more important. Tehran is demanding tangible benefits upfront rather than promises of future relief. From Iran's perspective, accepting new restrictions without immediate financial gains would be politically difficult.Trump's search for a political workaroundTrump's advisers are acutely aware of the political risks. According to CNN, administration officials are exploring mechanisms that would allow Iran to receive financial relief without creating the appearance of a direct US payment. One possibility involves third countries such as Qatar releasing funds. Another would permit access to frozen assets while restricting their use to humanitarian purchases such as food, medicine and agricultural goods. There have also been discussions about creating reconstruction funds financed largely by Gulf states rather than the United States.These proposals reflect an important reality. The debate is no longer about whether Iran should receive economic relief at some stage. It is increasingly about how that relief can be structured so that Trump can claim he has not repeated Obama's mistakes. In that sense, the dispute is becoming as much about political messaging as about financial policy.Leverage versus peaceThe White House remains reluctant to surrender what it views as one of its strongest bargaining tools. Trump has publicly insisted that the United States will retain control over frozen Iranian funds until Iran meets Washington's demands. Secretary of State Marco Rubio has similarly emphasised that sanctions relief should follow compliance rather than precede it.The administration's concern is straightforward. Once funds are released, Washington loses a major source of leverage. That leverage could prove critical during the highly technical second phase of negotiations focused on Iran's nuclear program. Iran, however, sees the issue differently. For Tehran, immediate access to frozen assets is evidence that the United States is negotiating in good faith. Without such a gesture, Iranian leaders appear unwilling to commit themselves to a broader settlement. That difference in perspective has created the current impasse.The choice facing TrumpThe strategic dilemma confronting Trump is becoming increasingly clear. He can maintain a hard line and refuse any significant financial concession, preserving political consistency but risking the collapse of negotiations. Or he can accept some form of economic relief for Iran, potentially unlocking a broader peace agreement but exposing himself to accusations that he has embraced a version of the same approach he once condemned.Rezaei's comments to CNN show how central that decision has become. By presenting the release of $24 billion as a test of trust, Iran has effectively challenged Trump to choose between ideological purity and diplomatic pragmatism. For a president who built his Iran policy in opposition to Obama's legacy, that may be the most uncomfortable choice of all. If peace ultimately requires releasing billions of dollars in frozen Iranian assets, Trump would be seen as eating his words when he had asked Iran for complete surrender.

'J&K was, is and will remain part of India': New Delhi rebukes Pakistan at UN

At the UNGA, India took a bold stand against Pakistan, critiquing its manipulation of UN discussions for political leverage. The Indian envoy reaffirmed that Jammu and Kashmir is a core component of India, calling out Pakistan's attempts to distort facts as flimsy and ineffective.

How Trump’s Iran strategy is reshaping Israel’s military options in Lebanon - opinion

Hezbollah gains leverage as US diplomacy links Lebanon to broader Iran deal efforts, limiting Israel’s options.

Bondi distances herself from 'botched' release of Epstein files | First Thing

Former attorney general says expected replacement, Todd Blanche, was in charge of controversial process. Plus: why are US consumers so angry? Don’t already get First Thing in your inbox? Sign up here Good morning. Appearing before the House oversight and reform committee, the former attorney general Pam Bondi told lawmakers that Todd Blanche, the man Donald Trump has lined up to replace her, was “in charge” of the US Department of Justice’s controversial handling of the Jeffrey Epstein case. She also said she was “not certain of the extent” that Trump knew about the crimes of Epstein and Ghislaine Maxwell before they became public. In her opening statement, Bondi defended the justice department’s handling of the records under her leadership and tried to distance herself from the release and review of the files, saying she did not “lead every aspect” of the DoJ’s effort, but that it was Blanche who oversaw it. If formally nominated by Trump to be attorney general on a permanent basis, Blanche would require confirmation from the US Senate. Why is the release of the files under scrutiny? Several lawmakers as well as survivors of Epstein’s abuse, have criticized some of the department’s actions and raised concerns over certain redactions and the disclosure of sensitive personal information in the files. Bondi acknowledged “there were redaction errors” in the release, but added: “Since day one of this process, this department has been committed to accountability and transparency.” What are the latest developments in Ukraine? In his first public letter to Vladimir Putin since the 2022 invasion, Volodymyr Zelenskyy, has called for face-to-face negotiations. Acknowledging shifting US priorities while Washington remained focused on the Iran war, the Ukrainian president said it would be wrong to simply wait for the Trump administration to step in. The proposal comes as Ukraine regains some battlefield leverage through improved long-range strike capabilities, even as Moscow intensifies its deadly aerial campaign across the country. Continue reading...

India's Tata to leverage Chery's EV tech

Tata Motors will use an automaking platform from Chery to locally build electric cars under its premium Avinya brand, Reuters reported on Wednesday.

Hamas using power vacuum to regain control of Gaza, security establishment fears

An official explained that a major problem has arisen due to on-the-ground dynamics. "Hamas is dragging its feet, and the US is finding it difficult to apply leverage on it," he noted.

Google job cuts: Company says evaluating internal structures

Google has recently laid off employees within its Cloud division, impacting its Threat Intelligence Group and Mandiant. This move, mirroring broader tech industry trends, sees the company reallocating resources towards artificial intelligence development. Google AI CEO Demis Hassabis, however, believes companies should leverage AI-driven productivity gains to expand, not reduce, their workforce.

Trump urged Xi to help end Ukraine war; China’s tech sanctions list: SCMP’s 7 highlights

We have selected seven stories from this week’s news across Hong Kong, mainland China, the wider Asia region and beyond that resonated with our readers and shed light on topical issues. If you would like to see more of our reporting, please consider subscribing. 1. Trump ‘personally called for China’s help’ to end Ukraine war in summit with Xi US President Donald Trump personally urged President Xi Jinping to help end the Ukraine war, seeking to leverage Beijing’s influence over Moscow to...

What is ‘strategic autonomy’ – and why is everyone suddenly reaching for it?

The leaders of Canada, France, India and Turkey are among those looking to leverage their ability to say ‘no’ to Washington.

Jefferies initiates coverage on Poonawalla Fincorp with Buy rating. Why are analysts bullish?

International brokerage firm Jefferies started coverage on Poonawalla Fincorp with a Buy rating and a target price of Rs 490, implying an upside of 23% from current market levels, citing positive levers of growth. Jefferies says the company is well positioned to accelerate growth under its revamped leadership team, expanding product portfolio, wider distribution network and sharper underwriting practices. The brokerage expects the company to deliver a 33% AUM CAGR, the fastest among major NBFCs, supported by an improving loan mix, better net interest margins and lower credit costs driven by reduced slippages and a healthier portfolio mix. Analysts also forecast a sharp improvement in profitability, with RoA/RoE expected to expand to 16% by FY29 from 6% in FY26, which it believes should support the stock's premium valuation multiples. The brokerage cited the company's ongoing strategic transformation under CEO Arvind Kapil, former head of retail and mortgage banking at HDFC Bank as a positive. The brokerage highlighted the leadership overhaul, with seven of nine CXOs coming from HDFC Bank, alongside the launch of six new products including prime personal loans, commercial vehicle loans, gold loans and education loans. These new segments have already scaled to 14% of AUM within a year and are expected to contribute 34% of AUM over time. Jefferies expects the company to deliver a 33% AUM CAGR during FY26-29, supported by investments in distribution, collections, technology and AI, as well as its AAA credit rating and backing from the Adar Poonawalla Group.The brokerage expects margins to improve as the company shifts toward higher-yielding products. After contracting by 250 basis points over the past two years due to the run-down of its legacy personal loan portfolio, NIMs are projected to expand by around 70 basis points over FY26-29, aided by growth in products such as prime personal loans and gold loans. At the same time, Jefferies expects cost-to-AUM to improve to 3.9% by FY29 from 4.4% in FY26 on the back of operating leverage.Asset quality trends have also strengthened, with gross NPAs declining to 1.4% from 1.8% in FY25, supported by tighter underwriting and the reduction of the stressed legacy personal loan book. Jefferies noted that delinquency levels in loans originated after September 2024 are running about 50% lower than the previous 12-month cohort. It expects credit costs to moderate to 2.2% over FY26-29 from 2.7% in FY26, driven by better portfolio quality and a growing share of lower-risk products such as gold and education loans.Following a Rs 2,500 crore capital raise in April 2026, the company's Tier-1 capital ratio has risen above 19.5%, providing ample room to fund growth. Jefferies forecasts profit after tax to surge to Rs 2,900 crore by FY29 from Rs 540 crore in FY26, while return on assets and return on equity are expected to improve to 2.3% and 16%, respectively, from 1.1% and 6% in FY26. Despite trading at 2.4x FY27 estimated book value and 25x FY27 estimated earnings, the brokerage believes Poonawalla Fincorp's strong growth trajectory and improving profitability justify premium valuations and could support further re-rating if execution remains robust. Key risks include weaker-than-expected execution, margin pressure and higher credit stress.In Thursday’s session, shares of the company are down 1.5% to Rs 394 on the BSE. Poonawala Fincorp shares are down 18% in 2026. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Audio book platform Kuku files confidential papers for up to Rs 3,500-cr IPO

Kuku Technologies Ltd, which operates vernacular audio platform Kuku FM and short-video streaming app Kuku TV, has filed confidential draft papers with Sebi for an IPO to raise up to Rs 3,000 crore, according to sources. The company is planning to raise between Rs 2,500-Rs 3,500 crore and is targeting a valuation of up to Rs 15,000 crore (about USD 1.8 billion) through the proposed public issue, people familiar with the development said on Thursday. The initial public offering (IPO), expected in the later part of this financial year, will comprise a mix of fresh issue of shares and an offer-for-sale (OFS) by existing investors. Proceeds from the fresh issue will be utilised for strengthening technology and AI infrastructure, content creation and expansion into new geographies. When contacted, Kuku Technologies declined to comment on the proposed offering. Kuku's revenue surged nearly seven-fold to more than Rs 1,400 crore in FY26 from about Rs 240 crore in the previous fiscal, while the company remained close to achieving operational break-even. The company has leveraged artificial intelligence tools to accelerate content production, improve content recommendations and reduce customer acquisition costs. Founded in 2018 by IIT alumni Lal Chand Bisu, Vinod Kumar and Vikas Goyal, Kuku has built a portfolio spanning audio content, microdrama entertainment and edutainment. Its latest offering, Kuku TV, launched in late 2024, focuses on micro dramas -- short-form mobile-first video series with episodes typically lasting two to three minutes. The platform is currently releasing over 150 original shows every month and has crossed 200 million downloads. Industry estimates suggest that India's Hindi and vernacular micro-drama segment is expanding at around 60 per cent annually, driven by rising smartphone penetration and increasing consumption of short-form video content. Across its platforms, including Kuku FM, Kuku TV and Guru, the company has over 10 million active paying subscribers and more than 400 million cumulative downloads. Its content library comprises over 60,000 hours of programming across seven to eight Indian languages. The company has also initiated plans to expand into overseas markets, including the United States. Kuku has raised more than USD 150 million from investors such as Fundamentum Partnership, Krafton, Vertex Ventures, Granite Asia, International Finance Corporation (IFC), Paramark Ventures, India Quotient and 3one4 Capital. Former India cricket captain MS Dhoni is also among its investors. Kotak Mahindra Capital, Jefferies, JM Financial and Axis Capital are acting as the book-running lead managers to the issue.

Weaponising climate

IN November 1970, the Bhola cyclone killed up to half a million people in East Pakistan. Yahya Khan’s government introduced a 10 per cent surcharge to fund emergency relief. Bangladesh became independent 13 months later. The affected territory was gone. The levy remained. Zulfikar Ali Bhutto’s government absorbed the revenue into general federal accounts in 1972. No accounting was published. In 1985, Gen Zia introduced the Iqra surcharge, framed as an education fund. The revenue balanced federal operating accounts. No alternative education instrument replaced it when it was abolished under the IMF’s insistence. The template was set. Fifty years later, Pakistan has not deviated from this template. What began as a cyclone surcharge is now a Rs1.55 trillion instrument misclassified as non-tax revenue. The architecture is identical but the scale has changed. Pakistan has pursued this through two parallel tracks. The first collected resources in the name of disaster relief, later rebranded as climate resilience as floods became more frequent. The second imposed non-tax revenue through petroleum pricing. The petroleum development levy (PDL), a general development surcharge dating to 1961, was structurally insulated in 2010 to bypass provincial NFC sharing. It grew steadily, crossing Rs100 billion annually by the mid-2010s and exceeding Rs200bn by FY2018-19. Although never formally framed as a climate instrument, it has acquired a distinct environmental gloss, culminating in the climate support levy of 2026. The flooding track: The 1973 floods wiped out three million houses and erased a year of economic growth. Bhutto created the Federal Flood Commission. Three consecutive 10-year national flood protection plans followed, running from 1978 to 2008 across four governments, each funded through the PSDP with no ring-fencing. Pakistan suffered catastrophic floods throughout. Three decades of federal plans, without a rupee ring-fenced. No relief fund has ever been legally ring-fenced. Since 1992, when Nawaz Sharif’s government first activated the prime minister’s relief fund model, Pakistan has deployed the same instrument at least five times across floods and earthquakes. The design is deliberate: by classifying flood revenue as voluntary donations rather than taxation, governments simultaneously escape parliamentary scrutiny, judicial challenge and NFC distribution requirements. Benazir Bhutto deployed the identical model after the 1994 floods. So did every government after 2010. The 2010 floods affected 20m people and caused $43bn in damages. The government announced a flood relief surcharge projecting Rs40bn, collected it, and absorbed it into the federal consolidated fund while simultaneously negotiating IMF targets. After the 2022 floods, the government quietly renamed its existing super tax: Section 4B, whose stated purpose was rehabilitation of temporarily displaced persons, became Section 4C, a super tax on high-earning persons. The humanitarian justification was dropped without explanation. The revenue mechanism stayed the same. Three findings hold across every instrument. No relief fund has ever been legally ring-fenced: every prime minister, president and chief minister relief fund is credited to the account of the federation, making it general government money. International pledges substitute for domestic accountability rather than supplementing it. And every fund since 2005 has carried a public commitment to publish an independent audit. None has been published. Justice Saqib Nisar’s 2018 dam fund collected Rs11.5bn from the public in the name of water security, earned Rs2.2bn in mark-up over six years, and was quietly transferred to the public account of the federation in 2024 without a single rupee spent on the stated objective. If money raised under the highest judicial authority in the country can still end up in the general budget, no argument remains that any executive fund can be trusted to do otherwise. The petroleum track: Climate change has been weaponised as a justification to tax citizens. Gen Musharraf used clean-fuel rhetoric to justify development surcharges during the CNG transition without a single rupee being traced to a cleaner fuel outcome. In 2009, the Supreme Cou­rt under chief justice Iftikhar Chaudhry ruled that revenue collected without a verifiable service to the payer is a tax, not a surcharge, and that imposing it by executive notification violates Article 77. The response was the Petroleum Pro­ducts (Development Levy) Amendment Act, 2009, that satisfied the court’s procedural requirement while eliminating any ring-fencing obligation. The consequences are calculable. At Rs1.55tr, the PDL represents 10-11 per cent of total federal revenue. Under the seventh NFC Award, provinces are entitled to 57.5pc of all taxes. If correctly classified, Punjab would receive Rs461bn annually, Sindh Rs219bn, KP Rs13bn and Balochistan Rs81bn. They receive zero. It is a tax called a levy because of the NFC Award. The classification is deliberate. PML-N elevated PDL margins in 2016 on the justification that the premium would fund cleaner fuel production. The revenue went instead to IPP capacity charge payments and circular debt service, which reached Rs1.14tr by FY2017-18. The revenue collected in the name of cleaner fuel financed the liabilities of a fossil-fuel-dependent power grid. The PTI then scaled the PDL to Rs424bn, the highest in Pakistan’s history, while branding it a carbon instrument aligned with its Ten Billion Tree Tsunami project. In March 2022, it froze the levy at zero for political reasons. The IMF suspended a $1bn tranche within weeks. A climate-labelled levy had become a macroeconomic emergency. Across 23 programmes since 1958, the IMF has required Pakistan to enhance the PDL without requiring it to distribute the revenue constitutionally. The way forward: Can the PDL be ring-fenced or audited? Ring-fencing 15pc of PDL collections into a sovereign climate fund (SCF) would deploy Rs232bn annually, shared with provinces under the NFC Award and structured as a statutory trust. Following global benchmarks, it can leverage private investment at a ratio of one to four, unlocking approximately Rs900bn in total climate finance conditioned on climate resilience outcomes aligned with Pakistan’s commitments. The IMF objection is predictable but answerable. The SCF does not reduce total PDL collections. Tabled in the next programme negotiation as a structural benchmark rather than a provincial concession, the IMF’s incentives align with the reform rather than against it. The question is not whether Pakistan can create such a fund. It is whether any government is willing to surrender a revenue stream that it has prized too much to ring-fence. The writer is a climate expert. Published in Dawn, June 4th, 2026

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