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- Bit by Bit 19th Sept || Biggest ever corporate investment in India || China's chip output shrinks & More
Bit by Bit 19th Sept || Biggest ever corporate investment in India || China's chip output shrinks & More
BGS Committee
September 19, 2022
Good Morning! May all your worries are as away as Bangalore airport is from Bangalore; that's it; that's the intro.
So, here are:
"5 amazing stories in 5 minutes to make you future ready"
Happy reading!
WEEK AHEAD
If you are now believing that now investors and policymakers will get some breathing space as the COVID impact wanes, think again. The recent economic data from countries around show bleak economic status which is aggravated by COVID restrictions in China and global slowdown concerns. Here are the few key data that can be expected in the coming week to help you navigate through the upcoming days:
Monday (19/9/2022): China will release its FDI data, which may be an indication of its foreign investments and export data.
Tuesday (20/9/2022): US Housing Data will be released. Housing starts fell by 1.46% to 1.46 million units in July, the lowest since February 2021. It was well below the market estimates of 1.54 million units. We need to look out for whether the trend continues or cools off.
Wednesday (21/9/2022): The US Federal Reserve will be announcing its interest rate decision. Fed raised the rates by 75 bps to 2.5% in July, the fourth consecutive hike. Given the persistent inflation, can we expect to see a large hike this time?
Thursday (22/9/2022): Bank Of Japan (BoJ) will announce its interest rate decision. The BoJ has reiterated that it will not hesitate to take extra easing measures if needed, which makes it an outlier amidst the global wave of policy tightening. The Bank of England (BoE) will also declare its interest rate decision. It raised its main rate by 50 bps to 1.75% in August, the biggest rate hike since 1995. US Initial Jobless Claims data will be released on this day. In the week ending on 10th September, the number fell by 5000 to 213,000, pointing to a tight labour market and giving Fed a breathing space for aggressive rate hikes.
Friday (23/9/2022): Bank Credit Growth data for India will be released on Friday. The value of outstanding loans in India grew 15.5% in August as compared to the same month in the previous year.
(Market was closed on 18th September 2022, Sunday)
ECONOMY
The Story:
Investors have priced in a steeper increase in interest rates over the upcoming months as a result of the major central banks of the globe reaffirming their commitment to combating inflation over growth.
According to Ethan Harris, an economist at Bank of America, "central banks are coming to terms with how difficult it will be to bring inflation back to target and they are trying to send that message to the markets."
According to Mark Zandi, chief economist at Moody's Analytics, "Central banks would sacrifice their economies to recession to ensure inflation soon returns to its targets." They realise that if they don't, and inflation spreads further, the economy would eventually experience a more severe downturn.
According to FT analysis, the 20 largest central banks in the world have collectively hiked interest rates by 860 basis points since June.
Markets had priced in a 25% likelihood that the US Federal Reserve would increase interest rates by 100 basis points on Wednesday as of Friday. They also anticipated that the federal funds target would be above 4% by the end of the year, or roughly one full percentage point more than in early August.
Markets anticipate that the deposit rate of the European Central Bank will increase from its current level of 0.75 percent to 2% by the end of the year. The most recent wager exceeds investor expectations from early August by more than one percentage point. The ECB's chief economist, Philip Lane, stated at a conference over the weekend that he anticipated "many" further rate increases this year and early next year.
Expectations for the Bank of England's interest rates at year's end are similarly higher, with economists largely split between a hike of 50 basis points and a rise of 75 basis points at Thursday's decision.
RETAIL
Key Facts:
In FY22, Patanjali Foods total income stood at ₹24,284.38 crore.
In FY22, its FMCG business made up 10% of sales while the commodity business contributed 88%.
Patanjali Foods was formed after the acquisition of Ruchi Soya by Baba Ramdev-led Patanjali Ayurved for ₹4,350 crore through an insolvency procedure in 2019.
The Story:
According to a report by Edelweiss Securities, Patanjali Foods, the fast-moving consumer goods division of the Patanjali Group, plans to increase advertising spending and hire senior executives to lead various categories as it repositions itself from a commodity business to a broader FMCG and health foods business.
Ruchi Soya Industries rebranded Patanjali Foods Ltd. earlier this year. In fact, Patanjali Ayurved sold Ruchi Soya its retail food business for 690 crores. More than 242 goods, including ghee, honey, spices, juices, and atta, were included in the acquired food company. The overall revenue for Patanjali Foods in FY22 was Rs. 24,284.38 crore. It mostly offers packaged meals and basic necessities including biscuits, honey, edible oils, lentils, and other items.
Patanjali emerged as competition to existing players in the market including Hindustan Unilever Ltd, Colgate-Palmolive India, and ITC after it launched a range of FMCG—stealing market share from incumbents.
The performance of the business would be influenced by major categories like ghee, premium edible oil, biscuits, and ayurvedic goods (aloe vera, amla juice, etc). The cherry on top would be an aggressive expansion in emerging sectors like spices and nutraceuticals.
In five years, the business also hopes to control a large portion of the palm oil plantations market. In the wake of the pandemic, immunity-boosting items like chyawanprash, honey, ghee, and ayurvedic health supplements have gained significant attention, according to analysts.
The four Patanjali companies—Patanjali Ayurved, Patanjali Medicine, Patanjali Wellness, and Patanjali Lifestyle—will be listed on Indian bourses over the course of five years, according to plans made public last week by Baba Ramdev.
AUTOMOTIVE
Key Facts:
According to the South China Morning Post, integrated circuit (IC) production fell 24.7 percent year on year to 24.7 billion units, the largest single-month drop since 1997.
The Gujarat government has partnered with Vedanta and Foxconn to invest Rs 1.54 lakh crore in order to achieve self-sufficiency in the field of semiconductor manufacturing.
The Gujarat government has partnered with Vedanta and Foxconn to invest Rs 1.54 lakh crore in order to achieve self-sufficiency in the field of semiconductor manufacturing.
The Story:
While India and the US double downed on domestic semiconductor manufacturing, China witnessed its biggest-ever monthly decline in chip manufacturing in August owing to Covid restrictions and weakening demand.
It is the second consecutive decline in the manufacturing of chips in china. The output plummeted 16.6% to 27.2 billion units in July.
The decline in chip production in China coincides with increased efforts by both India and the US to support domestic semiconductor manufacture. According to a report by the India Electronics & Semiconductor Association (IESA) and Counterpoint Research, India's semiconductor component market is predicted to generate $300 billion in total revenues by 2026 as 'Make in India' and production-linked incentive (PLI) schemes encourage local sourcing of semiconductors in the upcoming years.
The Chips and Science Act, which offers over $52 billion in incentives for the development of semiconductors, has been signed into law by US President Joe Biden in the meanwhile.
TECH
Key Facts :
Vedanta has partnered with Foxconn through a 60:40 joint venture to set up an integrated display and semiconductor fabrication ecosystem.
Vedanta and Foxconn signed an MoU with the Gujarat government to invest Rs 1,54,000 crore to set up the plant in the state.
The official said the Site will be finalized in the next two weeks.
The Story :
Vedanta and Foxconn have hired experts who are evaluating possible locations for their upcoming semiconductor plant in Gujarat and a site may be finalised in the next couple of weeks, Gujarat Science and Technology Department Secretary Vijay Nehra said.
So far, the joint venture company has not finalized the location as they are evaluating various sites in Gujarat based on technical aspects, commercial viability and connectivity to set up the semiconductor and a display.
"There are many minute things which need to be kept in mind while selecting the site. For example, the production process can get affected due to the vibrations of passing trains. There must not be any vibrations near the plant. Power outage of even one second in a year can result in a loss of crores of rupees." Said Mr. Nehra.
The project is likely to get huge subsidies and incentives, like zero stamp duty on land purchase and subsidized water and electricity 'Gujarat Semiconductor Policy 2022-27'. Under this policy, eligible projects will be given 75 per cent subsidy on purchase of the first 200 acres of land for setting up manufacturing units.
The eligible projects will be provided good quality water at the rate of Rs 12 per cubic meter for the first five years. And electricity subsidy of Rs 2 per unit for the next 10 yrs.
Want More Bits?
The Majestic history of the British Throne
Key facts:
Queen Elizabeth II became the queen of England when she was 25 and hence became the longest reigning monarch in the history of Britain.
Queen Elizabeth II was served by 15 prime ministers during her reign. The first one being Winston Churchill with whom she shared a friendly bond, and the newly elected Liz Truss was her last prime minister. Truss was also the third female prime minister to be appointed during Queen Elizabeth II's reign, after Margaret Thatcher and Theresa May.
She was the only person in the UK allowed to drive without a license.
The Story:
Queens of England:
Queen Matilda (1141-1148)
During the rule of her cousin, king Stephen, the daughter of King Henry I and declared heir was a contentious monarch. From Normandy, Empress Matilda seized control of southwest England and imprisoned Stephen, although she was never crowned. The clerics changed their allegiance to Stephen and dubbed her "Lady of the English. “Shortly before her anticipated coronation, Londoners rose up in revolt, preventing it from happening. Henry II, her eldest son, replaced Stephen as monarch.
Jane(1553)
In July 1553, Lady Jane Grey held the de facto throne of England for nine days. Once more, her reign was contested and she was never crowned. She was the late king Edward VI's cousin and a Protestant. She was his successor, he said. She was crowned queen, but the monarch's privy council switched sides after noticing growing support for Edward's Catholic half-sister Mary. On February 12, 1554, Jane was executed at the age of 16.
Mary(1553-1558)
Known as "Bloody Mary" by her Protestant foes, Mary worked assiduously to undo her father, King Henry VIII's, anti-Catholic Reformation when he broke with the Vatican. King Philip II of Spain was married to England's first legitimate queen regnant. She ordered the execution of more than 280 religious heretics. Many wealthy Protestants yearned for exile. Mary, who never had children, was compelled to accept Elizabeth, her Protestant half-sister, as her heir.
Elizabeth I (1558- 1603)
one of the greatest kings of England. One of England's most significant military triumphs was the 1588 destruction of the Spanish Armada, which came after her stirring statement "I have the heart and stomach of a monarch. "Stability and religious reform were achieved during her 44-year rule. When William Shakespeare started writing, the Elizabethan era was a heyday for both literature and the performing arts. Additionally, it was a period of New World expansionism. The so-called "Virgin Queen" never wed.
The Queens of Scotland
Margaret (1286- 1290)
The Norwegian princess who became queen of Scotland at the age of three and is the only living descendent of king Alexander III never set foot in Scotland. Aged seven, she set out for Scotland but perished off the coast of Orkney from acute seasickness. Her remains were sent back to Bergen, Norway. She had no apparent heir, and during the time after her passing, England took the initiative.
Mary I (1542- 1567)
After becoming queen of Scotland at the age of six days, Mary spent the majority of her youth in France before coming home at the age of eighteen in 1561. A revolt compelled her to abdicate in favor of her one-year-old son, King James VI, in 1567 after she married the man cleared of killing her second husband. In search of the safety of her English cousin Elizabeth, she fled south. She was imprisoned in castles for 18 years and executed in 1587 because she was seen as a threat. Elizabeth VI's chosen successor, James VI, was the first king to control both England and Scotland, although as distinct countries.
Queens of United Kingdom
Victoria (1837- 1901)
The British Empire reached its pinnacle under Victoria's protracted rule during an era of industrial development and advancements in science, technology, trade, and the arts. Victora represented the power of British imperialism. The "grandmother of Europe" became a queen at the age of 18 and gave birth to nine children. From her line came many more royal families. The empress of India was left widowed after prince Albert passed away in 1861, and she grieved for the rest of her life.
Elizabeth II (1952- 2022)
She was a steadfast figure who presided over the decades during which Britain emerged victorious from World War II, gave up its empire, and became a multiethnic country. She modernized the monarchy and oversaw its recovery from the chaos caused by the loss of Princess Diana, divorces, and a significant fire at Windsor Castle. She maintained the public's affection and respect as the age of deference faded because of her commitment to duty.
