Good Morning,
Welcome! I hope you have your “Subah Kee Chai” ready and you're excited to read your weekly 10-minute digest.
Before we get into the brief summary, I want to thank the "OG's" for sticking by for 10 weeks, here's to many many more! And a huge welcome to everyone who joined over the past few weeks, hope you stick around too! The aim of this newsletter is to make the news easy and enjoyable, and the support has been unreal. Thank you, I really appreciate it.
This week saw was like a huge rollercoaster, from "drops" in certain sectors and companies to "rises" in other industries. It also saw a new application introduced by FIFA to track match-fixing. Lastly, this week celebrated World Suicide Prevention Day, and I want to highlight the importance of mental health and well-being. Always check up on your friends and family, you never know who could be going through a hard time. I hope you read this and at least message one person just to ask them how their day is going.
I hope you enjoy today's newsletter,
Now let’s get into the news.
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Both equity markets finished in the green, with big jumps in market performance on Wednesday. On Friday, SBI, TCS, Tech Mahindra, Bajaj Finance, and Titan were among the top gainers. However, Induslnd Bank, Bharti Airtel, Asian Paints, and HDFC Bank were on the other end of the scale labeled as the top losers. The markets remained cautious over the adverse news surrounding the COVID-19 vaccine trials. In the forex market, the Indian Rupee depreciated against the dollar, and this week's newsletter also covered the GBP: INR rate.
In COVID-19 news, India jumped to the second-highest COVID-19 cases in the world surpassing Brazil. The total number of cases crossed the 45-lakh mark on Friday, and medical experts claim that cases are still being heavily underreported. India also reported a record rate of 96,551 cases and 1,209 deaths in one day.
In addition, the World Health Organisation (WHO) is in talks with India about joining the "Covax" global vaccine allocation plan. Covax is a mechanism set-up by the WHO to ensure the equal distribution of any future vaccines.
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Copper and Almunium
In an attempt to protect domestic manufacturers, India is planning to place greater restrictions on aluminum and copper imports from China and other Asian countries. Indian officials will soon ask importers to register with authorities as a first step towards tighter controls, after which shipping permits will be required for individuals shipments of copper and aluminum. China, Japan, Malaysia, Vietnam, and Thailand are among the major exporters of copper accounting for 45% of India's USD 5 billion copper imports in 2019/20. Similarly, India imported USD 4.4 billion worth of aluminum in 2019/20, with China being the biggest supplier. As a result, this step towards greater restrictions is India's push towards economic self-reliance.
Palm Oil
Over the month of August, India's palm oil imports dropped 13.9% to 734,351 tonnes due to low demands as a result of COVID-19. Similarly, soy oil imports fell 10.4%, and sunflower oil imports fell 31%. India is the world's biggest importer of edible oils, however, lower purchases will put downward pressures on Malaysian palm oil prices. India buys palm oils from Indonesia and Malaysia and other oils such as soy oil and sunflower oil from Russia, Argentina, and Brazil. The biggest sector that demand palm oils are the restaurant and hotel industry, however, forced restrictions due to COVID-19 resulted in extremely low demands.
Indian Economy
A recent analysis conducted by Moody's Investors Service indicated that India's economy will contract by 11.5% this fiscal year, a change from the earlier predicted 4%. The new statistic was estimated after a spike in COVID-19 cases in India, and further lockdown measures being imposed.
In addition, industrial production shrunk 10.4% in July due to lower outputs in the manufacturing, mining, and power generation sectors. The Index for Industrial Production (IIP) calculates the industrial output during each quarter. Between April-July the IIP for India contracted 29.2%. In contrast, the IIP during the same quarter last year was a growth of 3.5%.
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Commercial Investment
India's largest carmaker Maruti Suzuki (India) stated that its total production increased by 11% to 1,23,769 units in August. In comparison, the company had produced 1,11,370 units in the same month the previous year.
Eye-opener: The automobile industry was heavily impacted due to COVID-19, as lower disposable incomes resulted in lower demands for cars. While the pandemic still looms, Maruti Suzuki reporting an 11% increase in production comes as a surprise because are people in demand for automobiles? What do you think is the reason for such a steep rise in production, let me know in your feedback!
In addition, Zomato raised USD 160 million in funding from Tiger Global and Temasek Holdings valuing the online food ordering platform at USD 3.3 billion. In the Indian food delivery market, Zomato's primary competitor is Swiggy, and as a result the company always seeks to attract greater investments in order to expand the business into remote parts of India, while also covering a large number of restaurants. Lastly, Zomato is also preparing for an initial public offering (IPO) in the first half of 2021.
Country Investment
On Thursday, Prime Minister Modi launched the INR 20,050 crore Pradhan Mantri Matsya Sampada Yojana (PMMSY) to boost production and exports for the fisheries sector, as part of the government's overall plan to double farmer's income. This investment is the highest ever in the fisheries sector, out of which INR 12,340 crore will go towards beneficiary-oriented activities in marine, inland fisheries, and aquaculture. The other INR 7710 crore will be invested in fisheries infrastructure. The overall aim is to increase fish production by an additional 70 lakh tonne by 2024/25.
According to an EY report, the global Agritech market has the potential to reach a valuation of USD 24 billion by 2025. As a result, Indian Agritech companies received a USD 532 million package to stimulate rapid growth and tap into the growing market. Agritech is an emerging start-up ecosystem that is developing solutions to make the traditional agriculture value chain more effective.
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Cricket
Bowling coach for the Sunrisers Hyderabad, and former Sri Lankan legend, Muttiah Muralitharan is excited to work with head coach Trevor Bayliss in the upcoming IPL. During the interview, the bowling coach stated that the Sunrisers Hyderabad were looking to give youngsters greater opportunities. Young players like Abdul Samad, Abhishek Sharma, Khaleel Ahmad, Priyam Garg, and Sanjay Yadav will be some of the top picks for the first team.
Surprisingly, one of India's biggest cricket superstars Yuvraj Singh is expected to mark his return to domestic cricket. Yuvraj Singh and the Punjab Cricket Association are waiting for the BCCI to approve the crickets comeback. After retiring from all forms of cricket last year, it will be amazing to see Yuvraj Singh back in action playing T20 cricket.
FIFA
On Friday, FIFA (the global football governing body) endorsed a smartphone application that will allow professional players to anonymously report match-fixing approaches. The app functions like a "red emergency button" to ensure the player's anonymity while also reporting any forms of match-fixing. FIFA is taking this step to reduce international organized crime in football, one of the most targeted sports in the world.
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1. According to a report released on Thursday, India dropped 26 positions to rank 105th on the Global Economic Freedom Index 2020.
2. In an attempt to attract companies to set up manufacturing plants in India, the country is planning to offer incentives worth INR 1.68 trillion over the next five years.
3. Over the next five years, India plans to make 50% of publicly owned fuel stations completely solar-powered.
4. The country's largest lenders, the State Bank of India (SBI) stated that it is looking to recruit 14,000 employees in the current year. The company has an existing workforce of 2.50 lakh people.
5. A recent survey conducted by LinkedIn highlighted that nearly 50% of India's working women feel overly-stressed due to the COVID-19 pandemic. Under the topic of mental-well being, Thursday celebrated World Suicide Prevention Day. It is extremely important to check-up on your friends and family to make sure they're doing fine!
It doesn't take time to message someone saying "hi, how are you". Go for it!
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Quiz! Time!
A 3-letter word has been taken out of each of the following words, can you guess what it is?
R A _ _ _ G
_ _ _ D E R
S _ _ _ G
M U _ _ _ Y
_ _ _ G L E
Think!
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I hope you enjoyed reading your weekly Subah Kee Chai newsletter.
As always, please do share it with your friends and family so they can enjoy reading the news while sipping on their Subah Kee Chai.
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See you next week!
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Quiz Answer: T I N
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Written by: Adnan Bahrainwala (Founder of Subah Kee Chai)
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