Week 12

It's Business šŸ’¼

September 26, 2020

Good Morning,

Welcome! I hope you have your ā€œSubah Kee Chaiā€ ready and you're excited to read your weekly 10-minute digest. 

Today's newsletter covers the new labour reform bills passed in the Indian Parliament, some buy & sell deals that occurred during the week, and a fun quiz for everyone to try out! 

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I hope you enjoy today's newsletter,

Now letā€™s get into the news.

Markets

Markets

Despite equity markets experiencing a bounce-back on Friday, ending the trading day on a positive note, the week's overall performance was negative, due to a s

. The bounce-back on Friday was initiated by a gain in

, as shares rose over 800 points. Friday saw Bajaj FinServ, HCL Tech, Bharti Airtel, and ICICI Bank finish as top gainers. In numbers, equity market investors became

on Friday following the strong comeback. According to traders, gains in US-tech related stocks and Asian markets stimulated an accelerated buying spree in the domestic market. 

Taking a step back, why did markets suffer a six-day losing streak? Over the six-days,

due to concerns over economic recovery. Traders blamed the uncertainty over a US-led stimulus package, rising COVID-19 cases worldwide, and risks of extended lockdowns. The telecom and finance sectors faced the largest crackdown, as shares plummetted an average of 5-7%. 

Lastly, the

for 5 consecutive days, dropping by 3.80% since the start of the week. 

COVID-19

The government-run KEM Hospital, in Mumbai, administered the

on Saturday to three patients. The Oxford University-AstraZeneca developed Covishield vaccine is the leading solution towards defeating the novel coronavirus. KEM is the first hospital in Mumbai where human trials of the vaccine will begin. The vaccine is manufactured by the Pune-based Serum Institute of India. 

Labour Reform Bill

In an effort to reform the labour laws in India, the Rajya Sabha passed

that will safeguard worker's interests and provide a transparent system to adapt to the changing business environment. The three reform bills are:

1. The Occupational Safety, Health and Working Conditions Code, 2020

2. The Industrial Relations Code, 2020

3. The Code on Social Security, 2020

These reform bills will become law once the President gives his assent to them. 

Here is a list of key points that the bills cover:

1. It will consolidate and amend the laws regulating occupational safety, health, and working conditions. 

2. It will consolidate and amend laws relating to trade unions, conditions of employment in industrial establishments, and settlements in industrial disputes. 

3. It will amend laws relating to social security with the goal to extend social security to all employees and workers in organized and unorganized sectors. 

4. Companies employing up to 300 workers will not require government permission to lay off workers or close factory/manufacturing plants. 

5. Employees who meet with an accident or get injured while going to or coming from the workplace will also receive compensation. Earlier, compensation was only applicable during duty hours. 

6. An entrepreneur now only requires one labour return, one license, and one registration instead of eight registrations and four licenses. 

Are the new reforms good or bad?

The new labour reform bills are

as it makes hiring and firing workers easier, and imposes greater restrictions on trade unions. However, the reforms have been met with resistance from a number of trade unions, as unions fear the risk of workers losing their rights. Amarjeet Kaur, general secretary of the All India Trade Union Congress stated that the new labour reform bills will allow companies to exploit workers by demanding longer working hours. One of Prime Minister Narendra Modi's key strategies is to liberalise conditions for greater investment, and these new bills will attract greater foreign investment in smaller sectors lifting the plummeting Indian economy. 

Do you think the labour reform bill is good or bad for India? Let me know in your feedback! 

Buy & Sell

Sell

1. On Wednesday,

stated that it sold its stake in Altiostar Networks for USD 45 million (INR 331 crore) to Rakuten USA Inc. Tech Mahindra has also signed an agreement with Rakuten Mobile, under which the Indian tech firm will be a preferred partner and provide technologies to support the development of mobile networks for global customers of Rakuten Communications Platform (RCP). Manish Vyas, President, and CEO at Tech Mahindra stated that the partnership with RCP will represent a brilliant opportunity for an India-Japan-USA partnership towards the creation of technologies that can serve not only Indian, but global markets as well. It will also boost the ability of Indian engineering and innovation. 

2. Co-founder of

Krishnakumar Natarajan and his family have sold 4.66 lakh shares of the company, reducing their combined shareholding to 2.01%. In a regulatory filing, earlier this month, it was stated that the family had sold over 42 lakh shares of the company in multiple transactions between April 30th and September 14th. The shares were sold and purchased in the open equities market. 

Buy

In previous newsletters, I covered that

has been shopping for investments over the past few months. The company has raised INR 1.65 lakh crore through stake sales of its digital unit Jio and its retail arms Reliance Retail Ventures. Here is a list of the announced investments:

1. USD 755.1 million investment from KKR & Co Inc in Reliance Retail Ventures. 

2. INR 7500 crore from US private equity firm

, which has picked up a 1.75% in Reliance Retail Ventures. 

3. INR 1.52 lakh crore worth of its digital unit was sold to 13 global investors. 

4. USD 4.5 billion investment by Google 

Sports 

After a week of exciting IPL action, this is how the table is looking, with Delhi Capitals sitting at the top with a 100% win-record. 

Dean Jones

Former Australian batsman and well-known commentator

on Thursday after suffering a cardiac arrest. The famous commentator was in Mumbai, as part of the IPL broadcast set-up when he sadly passed away. In memory of Dean Jones, here are a

as a professional cricket player:

1. 52 Tests - 3631 runs with an average of 46.55. (11 hundreds and 14 fifties). 

2. 164 ODI's - 6068 runs with an average of 44.61 (7 hundreds and 46 fifties). 

3. World Cup Winner in 1987.

Struggles for Dangal Wrestlers

Dangal is an extremely famous wrestling sport most commonly played in the rural areas of India. A famous Amir Khan movie called "Dangal" showcased the popular sport. However, in the COVID-hit world,

leading to a number of struggling Dangal wrestlers. Sangram, a popular Dangal wrestler in Bahadurgarh, Haryana stated that his monthly income has dropped from INR 2-2.5 lakh a month to INR 5000 a month. As a result of COVID, Sangram went from being a champion wrestler in the mud-pits to a porter at a government warehouse. 

Other News

1.

has suspended all travel to and from India due to a significant rise in COVID-19 cases. The only exception is passengers who have official government invitations. 

2.

plunged 85% (USD 866 million) between January and August as investors remained cautious due to COVID-19. 

3. On Wednesday, Walmart-owned

in an attempt to expand its online fashion category. 

4. Bharti Airtel bought a strategic stake in

to ramp-up their cloud offerings. Waybeo is a start-up focusing on deep artificial intelligence analytics for cloud telephony. 

5. Amazon India will host a

from September 26th to October 10th. The mela will showcase 270 art and craft forms from various parts of the countries. The event will host 8 lakh artisans and weavers associated with 1,500 Amazon Karigar sellers. 

Quiz

Quiz time! 

"She" is a word that contains two personal pronouns: "she" and "he". What five-letter word beginning with the letter "U" contains 4 personal pronouns? 

Think, Think, Think! 

See you next week!

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Quiz Answer: "usher": us, he, she, her 

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Written by: Adnan Bahrainwala (Founder of Subah Kee Chai)