Good morning! YouTubers are making hay while the election sun shines. India’s top creators by audience are ditching their regular tech, travel, or lifestyle programming. Instead, they’re travelling to the national capital to interview the country’s biggest political leaders across party lines in the run-up to the national elections. They’re racking up views and subscribers on YouTube. The Economic Times reports that political parties are offering some finfluencers Rs 10-12 lakh each to promote their manifestos. Question is, what happens once the party’s over in June? 

🎧 Publishing industry wants licence to sue. Also in today’s episode: Tesla’s compounding woes. Tune in on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts.

Roshni Nair and Soumya Gupta also contributed to today’s edition.

The Market Signal* 

Stocks & Economy: Buffeted by competition, falling sales in China, and regulatory headwinds in Europe, Apple’s revenue fell 4% in the first quarter to $90.8 billion. Yet, it was not as bad as analysts expected. The world’s second-most valuable company is also suffering from a perception of being a laggard in deploying artificial intelligence as opposed to its Magnificent Seven peers, Microsoft and Google. The stock rose, also buoyed by a 4% cash dividend and a record $110 billion share buyback programme.

Meanwhile, market estimates suggest that Japan may have spent $20 billion in the past few days to support the yen, a haven currency which has been sliding against the US dollar. The yen rose to a three-week high. 

US unemployment data, a key input for the Fed's call on interest rates, will be published today. Asian shares were mixed in early trade. The GIFT Nifty indicates Indian equities will rise.

HEALTHCARE

Who’s Afraid Of The Pandemic Treaty?

There is a rather quiet battle underway in Geneva where low-income countries of the world are pitted against Big Pharma.

World Health Organization member states are crafting the world's first pandemic treaty. Talks began in December 2021 and the race is on to arrive at a final draft that is acceptable to the Global North and South. 

At the heart of the accord is the idea that to combat future pandemics, we need to develop therapies and vaccines in advance, for which nations must readily share samples and genetic sequencing of newly discovered pathogens. 

There is just one problem. Low-income countries are demanding guaranteed benefits, including equal access to vaccines and collaborative efforts with local scientists. They also want drugmakers to compensate them for access to pathogen data. And therein lies a deal-breaker for the world’s biggest pharmaceutical firms who can develop the germ-killing weapons. Read more in The Core.

PODCAST

Tune in every Monday to Friday as financial journalist and host Govindraj Ethiraj gives you the most important take on the latest in business and economy.

Today, he speaks to Sankar Chakraborti, CEO, Acuité Ratings & Research, on why India’s SMEs will have to work harder to survive. Also in today’s episode: unprecedented heat conditions across the country, record temperatures in eastern India, and heavy rains again in Dubai.

AVIATION

Can Embraer Do What Bombardier Couldn’t?

Canada’s Bombardier specialises in business jets. Also known for its train rakes, the company wanted to replicate its success in executive planes to commercial narrow-body aircraft. That day never came. Bombardier’s C Series programme pushed it into debt, and in 2017, the line was sold to Airbus for $1.

Mitsubishi has tried too, and China’s state-owned Comac has lofty plans to challenge the Boeing-Airbus duopoly. Now, Brazil’s Embraer reportedly wants to make narrow-body aircraft to compete with Boeing’s 737 and Airbus’ A320 families, respectively. Embraer has denied the report.

Single-aisle aircraft are workhorses of the skies, favoured by airlines for short and medium-haul routes. Growing markets like India are ripe for the taking, and Embraer is even keen to manufacture jets in the country.

Alternatively, Financial Times reports, Embraer’s new project may have nothing to do with narrow bodies; the company may instead plan a long-range business jet.

CONSUMER

Heat’s Got No Border 

Heat can do seemingly impossible things. Like bending government policy. The Centre is reportedly considering allowing Chinese electronic companies to set up bases in India. 

A report in The Economic Times says the IT ministry wrote to Shanghai Highly (Group) Co. enquiring what would it take to revive its plans for India. Highly, the world’s largest maker of compressors used in air-conditioners, had earlier proposed a joint venture with the Tata Group company, Voltas. The Rs 500 crore (~$60 million) plan was abandoned when approvals were not forthcoming. 

Highly already has a plant in Gujarat, which makes two million units of AC compressors annually. 

AC sales are expected to touch 11.5 million units in FY25 as demand soars due to extreme heat. The market is expanding so fast that it is even attracting big conglomerates such as Reliance Industries. 

The Signal

The air-conditioner market will only expand as mercury levels, especially wet bulb temperatures, a measure of humidity-laden heat, rise. According to the World Bank, by 2037, the demand for cooling is likely to be eight times more than current levels and there will be demand for a new air-conditioner every 15 seconds. The cooling industry got a fillip in 2021 when the government offered over Rs 6,000 crore under its performance-linked incentive (PLI) scheme for AC parts. Beneficiaries, including Daikin, LG, and Midea, have set up local compressor manufacturing units. Allowing Chinese companies to set up local units could help bring costs down.

FYI

Not hot on it: India’s food safety regulator FSSAI will inspect products of all Indian spice manufacturers for adulterants including ethylene oxide, the pesticide allegedly found in market leaders MDH and Everest.

Waved through: Mining and energy group Vedanta has received approval from its biggest lenders to demerge its various businesses after a seven-month stalemate, Livemint reports. 

Bye-bye: SaaS firm Freshworks’ founder Girish Mathrubootham has stepped down as CEO to be executive chairman; shares of the Nasdaq-listed firm fell 25% in after-hours trading. 

Pricey vice: Auction prices of tobacco reached near all-time high in Andhra Pradesh as the crop failed in Brazil, Zimbabwe, and Indonesia due to drought. 

Lifeline shopping: Just weeks after securing fresh funding, telco Vi is talking to banks for $1.8 billion in debt over the next two years, Bloomberg reported. 

THE DAILY DIGIT

2

The number of Boeing whistleblowers who have died in less than two months. Former quality auditor Joshua Dean died yesterday from a bacterial infection. John Barnett was found dead of apparent suicide in March. Both had exposed lapses in the manufacturing of the Boeing aircraft. (The Seattle Times) 

FWIW

More panda-monium please: The US and China are butting heads over everything from emerging technologies to energy transition targets, but the economic rivals are aligned on… pandas. Panda diplomacy is the tie that has bound Washington and Beijing for over five decades. And now, San Diego Zoo has placed the cherry on that cake by taking in two giant pandas, Xin Bao and Yun Chuan, from the China Conservation and Research Center. The exchange is a rare silver lining considering the US had started sending pandas back to China over the past few years. Hopefully, San Diego Zoo’s newest residents—there to facilitate research on habitat protection and treating major diseases—will stay on. It’ll take more than fluffy bears to thaw the ice between the two superpowers though.