Week 35

Waste 🗑

March 06, 2021

Good Morning,

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

Week 35! Wow, I can't believe I have been writing a newsletter for 35 weeks in a row! Thank you for sticking by and reading it! This week I analyzed the rising prices of waste-paper, India's new trading developments, NFT's, and India's victory over England! If you haven't already, please subscribe to my youtube channel, the link is below! Let's hit 100 subscribers by the end of March! 

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Now let’s get into the news.

Markets

Markets

After starting off the week strongly,

dipped for the second day in a row on Friday as rising US Treasury yields sparked fear among domestic and foreign investors. The BSE Sensex dropped 350+ points, with the NSE Nifty 50 dipping 150+ points. Induslnd Bank, SBI, Dr. Reddy's, NTPC, ICICI Bank, and HCL Tech were among the top losers on Friday, with their stocks down as much as 4.79%. According to an exchange data report, foreign investors offloaded equities worth INR 223.11 crore from Indian capital markets. However, it was not all red, as some of the losses were covered as the price of crude oil skyrocketed rising as much as 3.5%. The spike in the price of crude oil came after the OPEC (Organisation of the Petroleum Exporting Countries) and its allies agreed not to increase the supply of oil in April. Lastly, Heranba Industries Ltd rose 30% after investors responded strongly to its USD 85 million IPO (Initial Public Offering). 

Unlike the price of crude oil, however, the

plunged from a peak of INR 56,000 in August to INR 43,000 in March! In percentages, the price of gold is down 21% since August. The drop in gold prices in India came after the price of gold in international markets experienced a sharp drop dropping below USD 1700 per ounce, a nine-month low. Analysts claim this dip is a result of dropping demand for gold as a 'safe haven' or 'safe investment'. What do you think? Does gold still hold its value as a safe investment? 

In the month of February,

marginally declined 0.25% to USD 27.67 billion, while imports grew 6.98% to USD 40.55 billion. As a result, India's trade deficit widened to USD 12.88 billion, a 21% increase from the trade deficit value in February 2020. 

Cryptocurrency

Not really a cryptocurrency, but a new form of digital currency/good has taken the spotlight as institutions and creators tackle NFT's (Non-fungible tokens) on the digital market. An NFT by definition is non-fungible (cannot be replaced) and is one of a kind. Bitcoin, on the contrary, is fungible, meaning if you trade one bitcoin for another, you will end up with the same thing. A one of a kind trading card, however, is non-fungible. If you traded it for another card, you will end up with something completely different. So what is the hype behind NFT's? Well, think of it as a 'digital antique collection'. Just like a physical museum, people can purchase digital content in the form of NFT's through auctions and events, and gain proprietary right over that content! That piece of digital content over the years may skyrocket in value, and you would be the one owning it! Just like an ancient dinosaur skeleton or a vintage 1 penny coin! 

Recently,

sold the first-ever tweet on Twitter as an NFT for USD 88,888.88. Imagine a tweet selling for USD 80,000! Crazy right! An interesting market, and an interesting step towards a greater digital revolution....or is it? Let me know what you think of NFT's! 

COVID-19

According to the CEO of the

, Adar Poonawalla, the production of COVID-19 vaccines can be seriously limited due to the USA's decision to ban exports of critical raw materials. The Indian CEO called for greater regulatory harmonization between nation-states, the WHO, and other authorities of vaccine manufacturing countries to speed up vaccine approvals, manufacturing, and distribution. Serum Institute of India is the world's largest vaccine manufacturer and currently has the license to manufacture AstraZeneca/Oxford's Covidshield vaccine which has been approved by the Indian Government.  

Expensive Waste? 

An unprecedented crisis? Well, that's what India's

, which account for 65-70% of India's paper and paperboard production, are currently facing. The crisis stems from rising prices for waste paper. You're probably wondering, "waste paper? Who cares, it's paper waste!?" Paper waste is a key raw material in paper and paperboard production! The Indian Agro & Recycled Paper Mills Association (IARPMA) has warned the government, that any slippage in the production of paper due to rising waste paper prices will have a huge impact on the writing, printing, newsprint, and packaging industry. In India, waste paper-based paper mills account for nearly 17 million tonnes of the total 25 million tonnes of paper produced annually. What are the new prices? Pre-COVID, the price of waste paper ranged from INR 10-13 per kg. Presently, the price of waste paper ranges from INR 22-24 per kg impacting the industry immensely. One of the biggest reasons for this price spike is the unfair hoarding and cartelization by waste paper suppliers. 

Paper mills are the ones affected the most, as they do not have the capital available to adapt to the price hike. In addition, they are unable to shut down operations either as they need to pay interest, salaries, and other expenses that are legally payable under contract law. 

IARPMA has demanded the government to intervene and crack down on illegal hoarding by conducting raids in godowns and waste paper stocking centers. 

Indian Operations! 

Iran's

is a trade hotspot, and India has successfully set foot as a trading force. India expects to start full-scale operations at the general cargo port by the end of May, in an attempt to bolster regional trade. Through this newly built Indian port, India will be able to transport goods to Iran, Afghanistan, Central Asian countries, while avoiding our fierce rivals Pakistan. However, it was not all positive for India, as growing tensions between Iran and the USA led to multiple trade sanctions that slowed down the port's development. With Joe Biden's recent election win, however, India hopes for an easing of trade restrictions and an inflow of nearly USD 500 million in investments. From February 2019 to January 2021, the Chabahar Port has handled 123 shipping vessels and 1.8 million tonnes of bulk and general cargoes. 

In addition, India also plans to set up a 600 km railway line from Chabahar port to Zahedan, the capital of Sistan-Baluchestan, a place in Iran bordering Afghanistan. This port has proven to be extremely beneficial, as, during the pandemic, India used the Chabahar port to send 75,000 tonnes of wheat as humanitarian assistance to Afghanistan and 25 tonnes of pesticide malathion to Iran to deal with the locust outbreak. 

In the future, India plans to expand this port and add it to the larger trading network between India, Russia, Iran, and several other Central Asian countries. The project envisions a 7,200 km trading network for ships, rail, and road, to transport cargo for 30% cheaper than present carriage costs. It will also reduce transport time from 40 days to 20 days. 

India continues to solidify its foot as a global powerhouse, one step at a time! Do you agree? 

Sports

Champions Again! 

Winner Winner Chicken Dinner! After a heroic comeback against Australia last month, India has done it again! India beat England by an innings and 25 runs to win the

(3-1) in Ahmedabad on Saturday. With this win, India sealed their spot in the final of the World Test Championship against New Zealand at Lords Cricket Ground in the United Kingdom. Even though India were the favorites for the Test series, it was surprising to see England concede the series so early on Day 3. Indian superstar bowlers Axar Patel and Ravichandran Ashwin picked up 5 wickets each to end England's second innings. Here is a round-up of the top performers for India throughout the 4 Test series:

1. Rohit Sharma (Batsman) - 4 matches, 7 innings, 345 runs. 

2. Rishabh Pant (Batsman) - 4 matches, 6 innings, 270 runs. 

3. Ravichandran Ashwin (Batsman) - 4 matches, 6 innings, 189 runs. 

4. Ravichandran Ashwin (Bowler) - 4 matches, 8 innings, 32 wickets. 

5. Axar Patel (Bowler) - 3 matches, 6 innings, 27 wickets. 

Congratulations to India for bringing home another Test trophy, and for making every Indian proud! Let's go India! 🇮🇳

Other News

1. On Tuesday,

acquired radiowaves worth INR 18,699 crore in the latest spectrum auction. This new acquisition will allow Airtel to roll out 5G services in the near future. 

2. The Karnataka bench of the GST Authority for Advance Rulings has held that

are not a medicament. As a result, they will be subject to an 18% GST levy. 

3. On Friday, the government announced that

are mandatory for newly manufactured cars. 

4. Companies such as SBI, Accenture, Infosys, TCS, and RPG Group have announced that they will

for their employees and their families. 

5. On Thursday,

said that its one-to-one voice and video call feature is available on WhatsApp Desktop as well. 

Quiz

Quiz time! A tough one this week ;) 

What word starts with 'e' ends with 'e' and only has one letter in it?

Think carefully! 

See you next week!

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Quiz Answer: An envelope!  

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