Week 45

Crunch! 📉

May 29, 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 saw positive markets, declining COVID-19 cases, a wallet squeeze for consumers wanting to purchase new cars, and a massive fine for a major Indian bank! Time is flying, and May is over! Check out my round-up of this month's recommendations, and share yours too by replying to this email! I hope you enjoy your Sunday :) 

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Now let’s get into the news.

Markets

Markets 

After a strong performance on Friday,

ended the week in the green with both indices rising 1.70%. BSE Sensex rose almost 200 points, while Nifty 50 rose by less than 100 points as the number of COVID-19 cases in the country dropped, boosting investor sentiment. Reliance, M&M, HDFC Bank, Induslnd Bank, and Kotak Bank were among the top gainers at the end of the week with shares rising as much as 5.85%. On the contrary, Sun Pharma, Bajaj Finserv, Ultra Cemco, Dr. Reddy, ICICI Bank, and Bajaj Finance were among the top losers with shares falling as much as 3.82%. As per market experts, investor sentiment was on the rise as the number of daily COVID-19 cases fell, and the outcome of the 43rd GST Council meeting was also announced by Finance Minister Nirmala Sitharaman. 

COVID-19

On the COVID-19 front, India continued to maintain the

in daily new COVID-19 cases. On Saturday, India reported 1,73,790 fresh COVID-19 cases, the lowest daily rise in the last 45 days, pushing the total number of COVID-19 cases in the country to 27,729,247. The death toll climbed to 3,22,512, with 3,617 fresh COVID-19 fatalities in the last 24 hours. 

On the vaccine front,

plans to start the production of the drug substance present in the COVID-19 vaccine Covaxin. The company will start with 2-3 million doses per month, and will later increase production to 6-7 million doses per month by the end of the year, eventually scaling it up to 10-15 million doses per month. Bharat Biotech, the producer of Covaxin, tied up with IIL to increase the production of the vaccine to match the growing demand in the country. IIL is also working on another COVID-19 vaccine, that is currently being tested on animals, and is expected to come out by next year for human vaccination. 

Have you been vaccinated yet? 

Auto crunch! 

M&M 

The Chief of

expects that it will take another 2 years for the company's car sales to return to their pre-pandemic peaks, as slow vaccinations and a rise in cases are hurting the country's recovery prospects. Due to an economic slowdown in 2019, and a global pandemic in 2020, India's passenger vehicle sales dropped to 2.7 million units in the last fiscal year, the lowest level it has been in the last 6 years and well below its highest peak at 34 million units. Car sales saw a sign of recovery between January and March, however, the second wave of a highly infectious Indian variant forced lockdowns again crumbling consumer and investor sentiment across the country. Mahindra holds a 6% share of India's passenger vehicle market and is the country's largest manufacturer of tractors. Currently, urban and rural buyers are holding back until the second wave passes, and the automakers across the country are hoping for a strong economic recovery once the number of COVID-19 cases drops and lockdowns are lifted.

Used Cars

As mentioned earlier, the rise in COVID-19 cases is causing a major 'wallet squeeze' for investors, consumers, and manufacturers. This crunch in spending has shifted the demand for various things, in particular, the demand for passenger vehicles. Due to the slowdown in demand over the last 6-8 months, car companies are taking multiple price hikes, forcing customers to favour cheaper

to match their reduced budgets. Used car companies like Mahindra First Choice Wheels, Droom and OLX are seeing a sharp rise in stocks as dealers build their used cars inventory to match the growing demand. India is one nation where I personally have witnessed a number of individuals shying away from the idea of purchasing 'used cars' as compared to its popularity in countries across the world. Have you ever owned a used car in India? Let me know! 

Oof, that's a fine :/

RBI 

On Friday, the Reserve Bank of India imposed an

on HDFC Bank for the breach of certain provisions of the Banking Regulation Act (1949). In a statement, the central bank claimed that HDFC Bank was fined due to deficiencies in regulatory compliances. The central bank also ensured that their decision to fine HDFC bank would, in no way, affect regular customers. So my readers that are account holders at HDFC bank, do not panic or worry! Your money is fine. 

HDFC Bank was called into question by the central bank after a tip from a whistleblower highlighted the irregularities in the bank's auto loan portfolio. 

License 

In other news, on Thursday, the Government officially dismissed the idea of invoking a

to produce vaccines, as the country suffered from a shortage in supply after opening vaccinations to individuals over the age of 18 years. Compulsory licensing is not a very attractive option, and instead, the Government promotes the idea of forming partnerships to boost the production and supply of vaccines.

No licensing ---> no restrictions = more vaccines!  

Monthly Recommendations

Movies

1. The Secret Life of Pets 2 (Netflix) 

2. Llamageddon (Amazon Prime) 

3. The Woman in the Window (Netflix) 

4. Into the Storm (Netflix) 

5. Army of the Dead (Netflix) 

TV Shows/Documentaries 

1. Close Enough (Netflix) 

2. Money Explained: Vice (Netflix) 

3. Nail Bomber: Manhunt (Netflix) 

4. Friends: The Reunion (BT TV/Stream) 

5. Futurama (Disney +)

Books

1. Missionaries by Phil Klay 

2. The Vanishing Half by Brit Bennett

3. Bandit Capitalism by Bob Wylie 

4. The Cost of Free Money by Paola Subacchi 

5. Long Bright River by Liz Moore 

Music 

1. Snake - Lil Keed 

2. B.B. King Freestyle - Lil Wayne ft. Drake 

3. Let.go.of.my.hand - J Cole ft. Bas & 6LACK 

4. Someone New - Hozier 

5. Mixed & Mastered - JM7 

6. Bite my Tongue - The Academic 

7. Young Folks - Peter Bjorn & John 

8. One Day (Vandaag) - Bakermat

9. When I B On Tha Mic - Rakim

10. Space Song - Beach House  

Other News

1. Due to the second wave of COVID-19 cases,

has said that it has enhanced the production of oxygen generators to meet the rise in demand. 

2. According to Government data, the

surpassed Mauritius as the second-largest source of foreign direct investment into India with inflows of USD 13.82 billion. 

3.

stated that it will halt production at its car manufacturing plant in Tamil Nadu after workers staged a protest on Thursday demanding leave and health benefits. 

4. The

has extended the suspension of scheduled international flights till the 30th of June, 2021. 

5. The retail price of

in the city of Mumbai crossed the INR 100 per litre mark, the highest price it has ever gone. 

Quiz

Quiz time! 

I am a path situated between high natural masses. Remove my first letter & you have a path situated between man-made masses. 

What am I?

Think carefully...

See you next week!

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Quiz Answer: Valley and Alley

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