Week 38

Rupee 📊

April 10, 2021

Good Morning,

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

This week is a little different, I added in a short digest on the topic: currencies. Let me know what you think of it by replying to this email. Other than that, markets were green, IPL is back, the kettle is boiling and the day is about to begin! Enjoy your Sunday :)

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Now let’s get into the news.

Markets

Markets

On Friday,

dipped a little due to losses in market heavyweights HDFC Bank, ICICI Bank, and Reliance Industries as a result of negative cues from global markets. The BSE Sensex dropped 150 points or 0.38%, while the Nifty 50 slipped a smaller 45 points or 0.30%. As mentioned, HDFC Bank, Bajaj Finance, ICICI Bank, Kotak Bank, and Reliance Industries were among the top losers with shares dropping around 2%. On the positive, HUL, Sun Pharma, ITC, ONGC, PowerGrid, and SBI were among the top gainers on the last day of the trading week. A sharp rise in COVID-19 cases has become an area of serious concern as it forces greater uncertainty in the market due to fears of future potential lockdowns, which will impact economic activity and GDP growth. Lastly, the price of gold rose for the fourth day in a row, ending the week in the green. On the contrary, however, the price of crude oil dropped mirroring the dip in the benchmark price of international Brent crude oil.

Following on from last week, India's

rose to USD 6.8 billion in the first week of April, a number that was valued at USD 1.7 billion in April 2020, when the world had entered a complete lockdown halting major forms of global trade. In comparison to 2019, India's exports are estimated to be over 8% higher. Similarly, imports have risen from USD 2.8 billion to USD 9.7 billion in the first week of April, due to a massive jump in oil imports. On the export front, the rapid rise has been led by engineering, gems, jewelry, and petroleum products.

COVID-19

India set a new record for the fourth straight day, as the country reported over 1.45 lakh new

cases on Saturday. With this latest surge, the total number of COVID-19 cases has reached 13,205,926. This is the fifth day Indian has reported over 1 lakh cases in a single day, and it places India as the third-worst COVID-19 hit nation in the world. Wear a mask! Maintain social distance! Be safe! 

On the vaccine front, India has administered more than 9.80 crore vaccine doses, and from April 2nd the Government started vaccinating people above the age of 45 years. To maintain the rapid vaccination program, the Government will allow vaccines to be administered at

that are classified as eligible beneficiaries. Have you been vaccinated yet? If so, what was the process like, share it by replying to this email!    

Rupee

Fall

On Wednesday, the

crashed 105 paise against the US dollar to mark its biggest single-session drop in over 20 months, due to rising concerns surrounding the rapid increase in COVID-19 cases in the country. Sitting at 74.47 to the US Dollar, the INR marked its lowest level since November 13th last year, and also logged its worst single-day fall since August 5th, 2019. 

What is currency? 

Everyone knows the popular currencies such as the USD, GBP, INR, YEN, etc. however what do the numbers truly mean? And why do they constantly change? Regardless of the form it takes, every currency has the same basic goals, to encourage economic activity by increasing the market for various goods, domestic and international. Money in its true sense is merely a 'universal store of value', or in simpler terms a 'concept' that eases the process of barter between two or more parties. Currency is the physical paper notes and coins in circulation, and is beneficial because they are long-lasting, easy to transport, and hold value! 

Before the US Dollar became the citadel of currencies, gold, and other precious metals pegged most currency values across the world, however during World War II, central banks across the world could pay the US Government 35 dollars for an ounce of gold, allowing 'paper money' to hold some claim over physical metals. Due to the shortage of gold supply, however, the US Government decided to abandon this plan, triggering the rise of the USD as fiat money. In simpler terms, fiat money is when the dollar holds value because people have faith that other parties will accept it.

Why do currencies fluctuate? 

Simply put, the currencies across the world fluctuate in price based on supply and demand. Most of the world's currencies are bought and sold based on flexible exchange rates, which means each currency's value changes/fluctuates based on the supply and demand in the foreign exchange market. Two scenarios to remember:

1. A high demand for a currency or a shortage in its supply will cause the

price to increase.

2. A low demand for a currency or a surplus in its supply will cause the

price to decrease

.   

The supply and demand for each currency depend on a lot of factors such as the monetary policy, the rate of inflation, and political and economic conditions!

Pretty easy right? I hope you enjoyed this short breakdown of this amazing concept! Keep an eye out for other research posts just like this in the upcoming weeks!    

Fastest Growing! 

Levi's 

According to US clothing company

, India has emerged as the fastest-growing market in Asia for their brand. For the first quarter of 2020-21, the company's sales in India grew greater than the sales reported during the same period in 2019. In 2019, the company reported sales worth INR 1118 crore. The company credits this success to its strong efforts setting up profitable stores and rapidly adapting to the e-commerce world.

Inc Tech

Feeding of the rapid shift to the digital world, the

in India is expected to rebound and reach a total valuation of USD 93 billion in 2021, an increase of 7.3% from 2020. This number is expected to further grow to USD 98.5 billion in 2022, as per Gartner's projections. IT is an important asset in today's age, especially in the corporate world for the number of advantages it brings. IT no longer just supports corporate operations but is fully participating in delivering crucial business value. While IT is significantly reducing costs, it is also making jobs redundant, leaving many unemployed. How would you maintain the balance between tradition and progression?  

Sports

IPL! 

Yes! The Indian Premier League is finally here! Get the popcorn ready, an exciting two months of T20 cricket is coming up! The first match between the champions Mumbai Indians and Royal Challengers Bangalore took place yesterday and saw the underdogs Royal Challengers Bangalore come out on top in a jaw-clenching opener. While the IPL is not the same without the fans, it will still prove to be entertaining. IPL games are on every day up until the final, which will be held on the 30th of May. 

Keep your eyes open...

The IPL is a

for young, unknown, and talented cricketers to showcase their skills and cement their name as a future cricket superstar. A number of cricketers have gone on to play at an international level after impressing selectors during the IPL season. With the new season up and running, here is a list of the top 5 up and coming players to watch: 

1. Riley Meredith (Kings XI Punjab) - Australian Fast-Paced Bowler.

2. Shahrukh Khan (Kings XI Punjab) - Indian Batsman, p.s. no he is not the actor! 

3. Mohammed Azharuddeen (Royal Challengers Bangalore) - Indian Wicket-keeper Batsman. 

4. Liam Livingstone (Rajasthan Royals) - English Batsman. 

5. Chetan Sakariya (Rajasthan Royals) - Indian Medium-pace Bowler. 

And a lot more! Enjoy the IPL season, and if you're not a big cricket fan, don't worry, I've got you covered with a quick round-up of the best performances from the week! 

Other News

1. Energy giant

has struck a deal with US-based EIG Global Energy Partners to sell a minority stake in a newly formed oil pipeline business for USD 12.4 billion. 

2. The Government's

collections are estimated to be INR 9.45 lakh crore, a 5% rise from the country's earlier predictions. 

3. Shares of popular restaurant chain

rose 18% on their debut trading day on Wednesday. 

4. On Wednesday, the Government approved a

(PIL) scheme worth INR 6,238 crore for air conditioners and LED lights production. 

5. According to a list released by Forbes magazine, India has the third-highest number of

in the world. 

Quiz

Quiz Quiz Quiz! 

Six letters have I, and many more; 

One word tells what the others are for; 

Conceal a thing is what I do; 

So what am I? Need a clue?

Tricky one...!

See you next week!

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Quiz Answer: A riddle!! 

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