China Reports Resurrection
Also in today’s edition: Payment bank biz was dead on arrival; Aussie dorms are full
Good morning! We are very much inclined to believe this is a fast one. Reuters reports that Alibaba’s e-commerce platform Taobao is working with rocket startup Space Epoch to deliver super ultra-fast deliveries anywhere in the world in under an hour. The company plans to customise its Yuanxing-1 reusable rocket to deliver up to 10 tonnes of goods in a 120 square metre container. Next what? Warp speed deliveries?
🎧 LinkedIn is getting TikTok-ified, and is even introducing games on the professional networking platform. Also in today's episode: Hospitals are hustling patients out of the door asap so that they can reduce their average length of stay (ALOS). ALOS is a key metric of optimum use of hospital beds and other resources. Tune in on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts.
The Market Signal*
Stocks & Economy: It was another blockbuster year for equity investors. The Nifty 50 returned 29% and the BSE Sensex gained 25% in FY24. The NSE’s market cap hit $4.56 trillion, a $1.5 trillion or about 49% rise in the 12 months to March 31. Among major indices, only the Nasdaq Composite, which rose 34.2%, and Tokyo's Nikkei 225, which gained a stupendous 43.35%, outperformed the NSE.
US personal consumption expenditure rose in February. That complicates matters for the Federal Reserve, which is now also concerned about unemployment.
The Reserve Bank of India, meanwhile, begins its three-day monetary policy deliberations on April 3 and will reveal its rate decision later this week. It may attempt to calibrate systemic liquidity but is not expected to change interest rates.
The GIFT Nifty indicates a positive start for equities in the new financial year.
BANKING
A Model With No Business
It’s a business that was too late to make a meaningful impact. We’re talking about payment banks (PBs), which are in the spotlight because of the Reserve Bank of India’s crackdown on Paytm Payments Bank.
The RBI decided to introduce PBs in India after seeing their success in Africa where telecom companies operated them. A key objective of PBs was to help migrant workers who struggled to send funds to families back home.
As in Africa, the RBI gave preference to telecom companies. In 2016, it granted 11 PB licences but only five of them are operational now. The largest, Paytm PB with 300 million wallets and 30 million bank accounts, is about to cease operations. But PBs stood no chance against Unified Payments Interface or UPI, which is a much more efficient digital payments mechanism. For everything else there was net banking, as The Core reports.
PODCAST
Tune in every Monday to Friday as financial journalist and host Govindraj Ethiraj gives you the most important take on the latest in business and economy.
Today, he speaks to Ashok K Bhattacharya, Editorial Director & Columnist, Business Standard, on India's state budgets, which together are bigger than India’s union budget.
HIGHER EDUCATION
Plenty To Study, No Place To Crash
Cities Down Under are suffering a student squeeze. An influx of students, especially from India, has thrown the rented housing market in major Australian cities such as Melbourne and Sydney out of kilter.
A housing shortage has led to rents for shared rooms and dorms to shoot up 15% in the last quarter. The shortage is so acute that the country has tightened migration rules, insisting on higher bank balances. Visa approvals are also down 5% and the country would cut net immigration from 510,000 in 2022-23 to 250,000 by 2025. With a headcount of 120,000, Indian students are the second largest group in the country.
The issue is spreading elsewhere too. The Economic Times quoted Amit Singh, founder of UniAcco, a platform catering to students seeking overseas accommodations, as saying that US, UK, and New Zealand have similar issues and could affect aspiring international students.
GEOPOLITICS
The Recoupling Begins
It was perhaps fitting that news of the revival of Chinese manufacturing came over the Easter weekend. Resurrection, rejuvenation and cooperation were themes that dominated the last few days in China.
Uptick: China’s purchasing managers’ index rose to 50.8 in March from 49.1 in February, the first jump in six months. There were signs of revival earlier too. Exports rose 7.1% in the first two months of the year. So did factory output, which expanded 7% in the same period.
Roll call: Over the weekend, President Xi Jinping met with a clutch of US business leaders, including some of the biggest asset managers. Among them were Stephen Shwarzman of Blackstone, Andrew Schlossberg of Invesco, Raj Subramaniam of FedEx, Evan Greenberg of Chubb, Peng Zhao of Citadel Securities, Mark Carney of Bloomberg, and Brian Sikes of Cargill. Xi met European business leaders at the China Development Forum earlier in the week.
The Signal
There is little doubt that China is coming out of its multi-year funk. Despite its rocky relations with the US and Europe, global businesses and asset managers now recognise that there is no way they can ignore Beijing. Wall Street is eager for a re-entry as its companies are the only ones that can match US companies on the scale of revenues and profits. President Xi understands it too well. Beijing’s strategic contestation with Washington and neighbours such as Delhi and Tokyo will continue but that doesn’t mean China is not open for business.
FYI
Cell venture: Oil marketing giant Indian Oil Corporation has joined hands with Japan’s Panasonic Energy to make lithium-ion batteries in India.
Manna from taxman: Infosys landed an unexpected bonanza when the income tax department refunded Rs 6,329 crore (~$760 million) collected in excess over 11 years.
Heat and rain: Thunderstorms will likely lash Punjab, Haryana, and Chandigarh this week while heat waves will sweep states such as Maharashtra and Karnataka, the Met department warned.
Shining before IPO: Singapore-based online fast-fashion retailer Shien reported a profit of over $2 billion for 2023 on a gross merchandise value of $45 billion.
On the backfoot: President Recep Tayyip Erdogan’s AK Party suffered heavy electoral losses after opposition leader and Istanbul Mayor Ekrem Imamoglu’s Republican People’s Party swept nationwide mayoral elections.
THE DAILY DIGIT
Rs 63,000 crore
Or $7.5 billion. That is the dividend payout by public sector enterprises to the government for FY24, 26% more than Budget estimates. (Business Standard)
FWIW
Fitting in: One size fits all is usually not a good strategy to go to market even if it’s cost-effective. Especially for clothing labels. But Brandy Melville (BM) is not only sought after by American teens for its low-priced clothes, it is a status symbol on school campuses. BM’s well-cut minimalist style is hugely popular with skinny girls, who are the only ones who seem to fit in them. Their price tag adds to the allure but doesn’t diminish the cool quotient. Despite drawing flak for its sizeism, its popularity has not flagged. And guess what’s fuelling the urge to own the alcoholic sounding brand. Weight loss drugs such as Ozempic.
The content is too much overlapping over text and audio versions since this merger of Core and Signal. Should do something about it otherwise very difficult to follow both.