Week 19

Diwali! 🎆

November 15, 2020

Good Morning,

Welcome! I hope you have your “Subah Kee Chai” ready and you're excited to read your weekly 10-minute digest. 

Firstly, Happy Children's Day! The 14th of November marks this tradition started by our first Prime Minister Jawaharlal Nehru. Secondly, happy Diwali! Wishing everyone an environmentally friendly Diwali filled with love, joy, and yummy food!

This week saw Amazon and Reliance fight on the undercard, followed by a tense main card event in the Bihar elections. In addition, Apple and Whatsapp rolled out new features for the 930850604935th time this year, and lastly, the IPL trophy is back in Mumbai, after the Mumbai Indians defeated the Delhi capitals in a teeth-biting final. 

I hope you enjoy today's newsletter,

Now let’s get into the news.

Markets

Markets

Equity markets finished the week in the green after a positive day of trading on Friday because of banking and finance stocks holding firmer ground.

was the top gainer rising almost 3.32%, followed by Tata Steek, ICICI Bank, Axis Bank, and Bajaj Finance. On the contrary, L&T, HDFC, Bharti Airtel, and M&M were among the top losers. Following the new information about a potential COVID-19 vaccine, US election results, and increased foreign direct investment, traders and market experts remain confident about future market performance. However, with a rise in COVID-19 cases in other countries, there is a sense of fear within the domestic market.

Dulling the negative energy, Government officials hinted that India is planning to announce a fresh round of stimulus packages totaling

to help pull the economy out of its worst contraction in history. India's finance minister, Nirmala Sitharaman, and other top officials will finalize a plan by next week.    

  COVID-19

The world's largest vaccine maker is ramping up production of

COVID-19 vaccine shot, aiming to have 100 million doses ready by December. As a result, India could see vaccines rolling out to the public by late December. Extremely positive signs towards defeating this novel virus and ending the pandemic. On the other side of the world, Pfizer is also awaiting FDA approval before initiating mass production and distribution of a COVID-19 vaccine. 

Bihar Elections

BJP

This week showcased the on-going

, in which the BJP (led-by Prime Minister Narendra Modi) put up a winning performance. The current ruling party NDA (National Democratic Alliance), with support from BJP, secured a majority seating in the Bihar Assembly. The Election Commission of India announced the results on Wednesday. In numbers, the NDA won an absolute majority winning 125 seats, three more than the halfway mark needed for a victory. 

What's next? After successfully winning Bihar, the next step for India's dominant BJP party is

, where they face a tough election battle against the current ruling Trinamool Congress, led by chief minister Mamata Banerjee. With a large Muslim population and a neighboring border to Bangladesh, do you think BJP has a shot at gaining a majority in West Bengal? The BJP's mission becomes even more difficult due to a lack of leadership within the party to face the powerful Mamata Banerjee. Time will tell...

Well, that's a first! 

As per an RBI official, the GDP (gross domestic product) of India is likely to

for the July-September period. As a result, India will enter into a recession for the first time in history in the first half of the new fiscal year! Oof, COVID-19 really knows how to ruin a party, doesn't it? Researchers claimed that the pandemic accounts for almost 90% of the reason why the economy is experiencing such a huge contraction. Based on a "nowcasting" technology, economists suggest that the Indian economy will contract by 9.5% for the entire fiscal year. 

Big Picture

: Are the current and upcoming stimulus packages enough to pull the Indian economy out of this downhill contraction? What else should the Government focus on? Let me know your ideas in the feedback! 

It only gets worse...

Recession, Recession, Recession! It's all interconnected. After recording a positive growth rate in September, India's

by a staggering 5.12% to USD 24.89 billion in October. Government data suggests that there was a dip in shipments of petroleum, gems, and jewelry, and engineering goods. Following the dip in exports, India's trade deficit narrowed to USD 8.71 billion. As a positive, however, imports also fell by 11.53% to USD 33.6 billion for the same month. 

Amazon v Reliance

Here's a matchup that's been long overdue,

locked horns over legal disputes and a crumbling deal. But what exactly happened?

Last year, Amazon bought 49% in one of Future Group's unlisted firms, with the underlying right to buy into the listed flagship Future Retail after a few years. However, due to COVID-19, the company faced a major cash crunch forcing Future Group to seek a deal. In May 2020 Amazon was considering an increase in their stake, however, nothing was materialized. In the meantime, Future Group signed a deal with Reliance, Amazon's biggest competition. As a result, Amazon claimed that Future Group violated the initial contract, which prevented them from transacting with other companies including Reliance. 

Mukesh Ambani's Reliance Industries agreed to buy Future Group for USD 3.4 billion. Future Group is a Mumbai-based company that is currently in debt and will collapse if not acquired. According to court filings seen by Bloomberg, Amazon has requested the Competition Commission of India to not approve the takeover until the arbitration proceedings are completed.

What is the fight really about?

Digging deep into the conflict, the fight revolves around gaining dominance in India's USD 1 trillion consumer retail market. Future Group, unfortunately, has been caught up in the middle of the fierce rivalry between the two retail giants.     

How many more Apple events!?

Yes, you're probably wondering, another Apple event? Seriously? How many more products do they have in their locker!? On Wednesday, Apple announced a new processor called the

, which will power its Mac range of products. Apple also released details of the new MacBook Air, MacBook Pro 13' and the Mac Mini. The new M1 chip is all about "power efficiency", with an eight-core CPU it gives the best ever performance, according to Apple. If you've recently bought the iPhone 12, run back to the Apple store and go buy yourself a laptop too! It's Diwali, treat yourself ;)  

Whatsapp too!? 

Making headlines again,

is back with another feature! Last week saw the messaging app add a payment service and a "disappearing messages" option. This week, Whatsapp is rolling out a shopping button, signaling a bigger plan for an entry into India's large e-commerce market. Currently, the feature is limited to enabling users to see catalogs of small businesses on Whatsapp and then interacting with them to place an order. However, direct payments to merchants are still not enabled. In numbers, Whatsapp has 15 million users for Whatsapp Business, which is used by businesses to advertise their catalogs. 3 million Indians check the catalogs every month according to a company report. Will you use Whatsapp Shop to buy things? 

Sports

WINNER WINNER WINNER! 

Mumbai Indians are the winners of the 2020/21 IPL season, what a crazy tournament its been! The shining trophy stays put in Mumbai for a consecutive year. Has Mumbai become too dominant in the competition? As a Mumbaikar, I am buzzing!! 

In other sports news, Liverpool is facing serious squad problems with star defender Van Dijk injured, Mo Salah testing positive for COVID-19, and the injury list getting longer and longer. Can they go back to back like Mumbai and win the Premier League season? 

Other News

1. Oil India Ltd, India's second-largest oil producer stated that it has made a natural gas discovery in Tinsukia,

. 

2. On Friday, China said that it will

from India for one week after detecting COVID-19 on three samples taken from the outer packaging of frozen fish. 

3. The NHAI celebrated the number of

crossing two crores on Wednesday, scoring a 400% growth rate in a year. 

4. Following last week, the Government increased the number of permitted domestic flights from

operation. 

5.

raised USD 195 million in funding from six key investors, securing a valuation of USD 3.6 billion. 

Quiz

Quiz!!

Find out what is so special about this phrase below?

Never odd or even. 

Think, think, think! 

See you next week!

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Quiz Answer: Look at it backwards. They read the same both ways!  

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