The Signal - Nightmare for investors
Nightmare for investorsAlso in today’s edition: China has caught the chill; Russian rock, Indian cut; I-bankers go corporate; Rivals' cooperative
Good morning! Imagine going on a vacation to get away from household chores such as doing the dishes only to spend hours wiping away food gunk. It is a reality now. Airbnb hosts are saving up on cleaning fees to fight inflation. Travellers are now shunning Airbnbs for a hotel stay, reports the Wall Street Journal. Can't blame them. 🎧 Germany’s famous Oktoberfest is back after two-year hiatus. The Sarus crane is displaying new behavioural patterns due to climate change. The Signal Daily is available on Spotify, Apple Podcasts, Amazon Music, and Google Podcasts, or wherever you listen to your podcasts. If you enjoy reading us, why not give us a follow at @thesignaldotco on Twitter and Instagram. The Market Signal*Stocks: The Federal Reserve's upcoming meeting on Wednesday could drive markets this week. The Bank of England will move on interest rates this week. Yoga guru Ramdev's Patanjali is looking to list four more companies on the bourses in the next five years. Early Asia: The SGX Nifty opened +0.19% higher than its previous close in early morning trade. The Hang Seng Index (-0.68%) and Nikkei 225 (-1.11%) played spoilsport. CHINASqueezed Out?Chinese mobile phone makers may flee India after a government crackdown, Chinese state media reported quoting an unnamed India-based executive. The report cited Oppo’s new $20 million plant in Egypt as the precursor to an exodus to likely destinations such as Indonesia, Bangladesh, and Nigeria. Made in India: Smartphone shipments from India have jumped 16% this fiscal year and Oppo contributed a fourth of that. Indian investigating agencies are, however, probing alleged tax evasion by Oppo, Vivo and Xiaomi. Meanwhile in China: Companies are sharply cutting costs. Chipmakers have stopped hiring and thousands of startups in the sector have shut shop. If the electronics industry is hit, it will impact local companies’ (think Oppo,Vivo, Xiaomi) foreign units which source components from the mainland factories. Tailpiece: The economic situation is so bad that KFC now sells chicken feet, necks and other less sought-after chicken parts. GEMSQuiet Shines The Russian DiamondThe lull that gripped the diamond industry after the West sanctioned Russian miner Alrosa has lifted and the precious stones are now flowing freely. Context: Alrosa’s numbers are unavailable after January 2022 but trade intelligence provider Volza reports that Russia sent 87,120 rough-diamond shipments out of India’s total 4,10,642 consignments as of early September. Most of those likely came through the UAE and Belgium, an analysis of data from the Gem and Jewellery Export Promotion Council (GJEPC) shows. Route map: Rough diamonds are two-thirds of India’s gems and jewellery (G&J) imports. In FY20, those came from Switzerland (33%), the UAE (27%) and Belgium (20%). In FY22, nearly half came from the UAE. Switzerland was out of the picture. The shipping route likely shifted even more after an India-UAE trade deal. G&J exports to Switzerland, however, shot up by 138% in April-August 2022 compared April-August 2021. GLOBAL ECONOMYA Vicious Circle Is FormingAs one of the most rocky financial quarters draws to a close, inflation continues to maul major economies, forcing shifts that could change the way the world functions. Fiery prices: In Argentina, prices are rising at a rate of 100%, forcing its central bank to raise interest rates to 75%. The British pound fell to a 37-year low. Home prices in Istanbul are up 200% as Turkish inflation soars to 80%. Fitch Ratings expects India to grow slower than expected in FY 2023. The US economy will also likely slow down as the Fed continues its war on prices. The impact was felt in global stocks, debt and commodity markets as panicked investors triggered sell-offs.
I-BANKINGM&A Experts Plump For Corporate CushionThe deal makers of Dalal Street are jumping ship to India Inc. What: The Economic Times reports quoting headhunter Native that ~150 mid to senior level investment bankers moved jobs. More than half of them joined either large companies or startups. Many have joined the mergers and acquisitions divisions of companies such as Reliance Group and Piramal Enterprises. Why: The trend is unsurprising considering that economic conditions and business environment in the past 4-5 years have led to consolidation in almost all industry segments. Large conglomerates such as the Tata, Adani and Reliance groups have set a scorching pace of acquisitions as they race to consolidate in sectors ranging from FMCG to cement. Naturally, it makes business sense to hire specialists rather than rely entirely on investment bankers. M&A deals in April-June this year topped $82 billion in India. That was 10% of the global tally. GEOPOLITICSCooperation Is The Middle NameIndia took over the presidency of the Shanghai Cooperation Organisation (SCO) even as Prime Minister Modi called for connectivity and free transit rights through member-states. Talking rivals: The SCO summit in Samarkand was closely watched the world over as it was a meeting of several countries that harbour intense rivalries. Two member states, Kyrgyzstan and Tajikistan were slugging it out while the meeting was on. Russia is already waging a war in Ukraine. India and China barely ended their border skirmish on the eve of the conference. Potential: India has already said its agenda includes building supply chain resilience and climate change mitigation. With the region’s reserves of fossil fuels and natural resources, Russian, India and China’s tech and manufacturing capabilities, workforce, land area, and maturing markets, better cooperation between SCO member-states could even change the global order. PS: Chinese President Xi Jinping stayed away from a mask-free gala dinner. FYIGoing offline: Ola Electric is opening its own offline retail stores or “experience centers” across the country. The move comes amid sagging sales of its S1 Pro scooter. No ads, please: Social media platform BeReal is exploring in-app payments for some features to begin monetisation. It is no longer on top of the App Store. Fresh dough: Google-backed DotPe has raised $55 million in fresh capital from Temasek, while CRED will invest about $10 million in peer-to-peer lending platform LiquiLoans for a minority stake. Do not Coming soon: The Reserve Bank of India will bring its new card tokenisation norms into effect from October 1. On top: Gautam Adani’s Adani Group has overtaken the Tata Group to be India’s most valuable conglomerate. Adani will also take over as chairman of Ambuja Cements, while his son Karan will helm ACC. Dark messages: The CFO of a listed automobile company, JBM Group, was duped of ₹1 crore via fake WhatsApp messages. The sender appeared to mimic its vice-chairman while demanding money from the CFO. FWIWNo dice: Gifs aren't cool anymore. Not us, but Giphy says so. The comments came in light of its filings with the UK's competition watchdog, that's looking to block the Facebook takeover attempt. In its official filing, Giphy noticed a decline in young users, further adding the target audience remains "boomers" and that it's "out of fashion", with receipts et al. We are sus. The walls have ears: And so, the Chinese are *really* looking for a place to vent. Users are flocking to Mastodon, a decentralised Twitter, after the state clamped down rules on social media, including one to displace user locations. Its registered over 50,000 Chinese users this year. New venture: WhatsApp is making movies now. It will premiere an original 12-minute short film about an NBA player Giannis Antetokounmpo called Naija Odyssey on Amazon Prime Video and YouTube. Who would have thunk it? Enjoy The Signal? Consider forwarding it to a friend, colleague, classmate or whoever you think might be interested. They can sign up here. We recently got funded. For a full list of our investors, click here. Want to advertise with us? We’d love to hear from you. Write to us here for feedback on The Signal. If you liked this post from The Signal, why not share it? |
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Rigs in the boondocks
Saturday, September 17, 2022
How the Ethereum Merge and crypto downturn affected the fortunes of India's small-town entrepreneurs
Darjeeling tea is in hot water
Friday, September 16, 2022
Also in today's edition: TikTok gets grilled; Ray-Ban's rose-tinted metaverse ambitions; All eyes on SCO summit; Canva has suite dreams
The casual bravado of Byju Raveendran
Thursday, September 15, 2022
Also in today's edition: Nintendo's skin in the game; The creator economy is flailing; Vedanta to make iPhones; Warner Bros. Discovery wants you to pay up
Twitter wants Musk to buy it
Thursday, September 15, 2022
Also in today's edition: More problems for Peloton; Edtech woes continue; Roadblock for Adani?; Uniqlo's winning
Tata wants a sip of Bisleri
Tuesday, September 13, 2022
Also in today's edition: Roblox for grownups; Everyone wants satellite tech; Global property blues; How Fairplay hedged its Asia Cup bets
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