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  • Bit by Bit 21th Jan || Egypt: Another economy Pounded ||Tesla uses its profits as a weapon in an EV price war & More

Bit by Bit 21th Jan || Egypt: Another economy Pounded ||Tesla uses its profits as a weapon in an EV price war & More

January 21, 2023

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Good Evening Readers!

Here are:

"5 amazing stories in 5 minutes to make you future ready"

Happy reading!

MARKET UPDATE

  • NIFTY 50 : ₹18,027.65 (-0.44%)

  • BSE SENSEX : ₹60,621.7 (-0.39%)

  • NIFTY BANK : ₹42,506.80 (+0.42%)

  • USD/INR : ₹80.979 (-0.32%)

  • BRENTOIL : $87.63 (+1.71%)

  • MCXGOLD : ₹56,569 (+0.22%)

  • FII Net Cashflow : - ₹2002 crores

  • DII Net Cashflow : + ₹1510 crores

(Market Data as of 11:00 PM on 20/01/2022)

ECONOMY

Key Facts:

  • Egypt’s economy took a significant blow in the past two years.

  • The pandemic saw investors pull $20 billion from Egypt in 2020.

  • Twenty billion dollars is the equivalent of every penny Egypt has borrowed from the IMF since 2016, and it disappeared in weeks.

The Story:

Egypt has gone through several financial crises over the past decade, which forced it to seek bailouts from creditors like the International Monetary Fund (IMF) and Gulf Arab allies.

But the country has become trapped in a cycle of borrowing that analysts say has become unsustainable. Its debt this year amounts to 85.6% of the size of its economy, according to the IMF.

Some of the factors contributing to Egypt’s failing economy include the military’s outsized role, allocation of great sums to mega projects like Africa’s tallest tower and a new capital city in the desert.

Egypt is home to more than 106 million people, more than half of whom are living in precarious economic conditions. Many are unable to afford basic food staples, limiting their spending and even restricting diets, and analysts have warned of unrest should the situation deteriorate significantly.

FMCG

The Story:

The FMCG industry in India continues to recover as consumers have returned to their normal routines. According to NielsenIQ’s FMCG Snapshot for Q2 2022, the FMCG industry had grown by 10.9% in the quarter ending June 2022, versus 6% in the previous quarter.

With budget 2023 just a few days away, there are some expectations of the industry, which see the sector as one of the most important industries, which traces its chain from rural India.

Rural demand is poised to recover, with food and overall inflation likely to trend between 5-5.5 percent compared to 6.8 percent in 2022. The lower inflation will support rural demand.

According to a Moneycontrol report, in 2023, rural demand will pick up strongly, urban demand will remain steady and move with a positive bias, volume growth will replace price-led growth, and more importantly, the sector will witness margin recovery.

AUTOMOTIVE

Tesla uses its profits as a weapon in an EV price war

The Story:

For every car it sells, Tesla Inc. makes more money than any of its international competitors. Elon Musk, the CEO, is currently using this higher profitability as a weapon in the EV price war he initiated. According to a Reuters study of industry data, Tesla, formerly among the most prominent financial losers in the car industry, has significantly outperformed most of its main competitors in terms of profit per vehicle over the past few years.

Tesla earned $15,653 in gross profit per vehicle in the third quarter of 2022 - more than twice as much as Volkswagen AG, four times the comparable figure at Toyota Motor Corp, and five times more than Ford Motor Co, according to a Reuters analysis.

For the majority of this year, Tesla aggressively raised the prices of some of its best-known products, such as the Model Y SUV. Due to shortages of semiconductors and other resources, the auto industry was able to focus on higher-margin models and record substantial profits even while sales quantities declined. Tesla's decision to reverse course and spend its production-cost advantage on price cuts now challenges the profit-over-volume strategies that established automakers such as GM have pursued since the 2008 financial crisis and doubled down on during the pandemic.

TECH

Instagram now has a "Quiet Mode," and the app now has extra parental control features.

The Story

Instagram, a photo-sharing website owned by Meta, has unveiled a brand-new function called Quiet Mode to assist users in encouraging boundaries with friends and followers. By turning off incoming notifications, automatically responding to direct messages (DMs), and changing an account's status to "In Quiet Mode" to let followers know the user is not active on the platform, the feature, according to the company, will aim to lessen users' anxiety about spending time away from the app. The feature is thought to be intended for teenage users. Instagram acknowledged that kids may occasionally want to take time for themselves and may be looking for more ways to highlight at night, while studying, and at school, according to Instagram’s parent company Meta. The purpose of this new function is to promote screen time reduction, and the platform will prompt teenage users to use Quiet Mode at night, according to the business. The function was created by Meta, according to the firm, "to encourage users to set boundaries with their friends and followers" and to "help people focus."

All notifications will be muted when it is activated, and the user profile activity status will change to indicate that the user is in Quiet Mode. When someone sends a user a DM on Instagram, an auto-reply will also be sent. Teens have admitted to us that they occasionally wish to take some time for themselves and that they may be looking for better strategies for focusing at night, while they study, and in class. The Quiet mode hours can be easily adjusted to meet your schedule, and once the function is disabled, we'll display you a brief summary of your alerts so you can catch up on what you missed, Instagram said in a blog post.

Anything Interesting

IMF chief Kristalina Georgieva said on Friday that fragmentation can cost as much as 7% of the world's GDP and urged everyone to be practical and work together. She made her statement at a discussion on the global economy on the final day of the World Economic Forum Annual Meeting 2023. "If we don't unite now, we'll face enormous risk to the economy and people's wellbeing," she warned. The managing director of the International Monetary Fund stated that if we examine medium-term economic forecasts, how we tackle supply chain challenges will determine our future chances.

She responded, "Last year, we reduced the growth predictions three times and not downgrading further itself is excellent news at the moment," when asked what it would take for the IMF to increase its projection for global growth. Additionally, the labor market needs to be properly examined because, according to her, having a job despite a cost of living crisis is much preferable to having neither one. "The year 2022 was strange. No growth engine existed. However, something must have changed recently.