Arvind's Newsletter

1.A tale of two foreign investors:TotalEnergies halts Adani investments; GQG bets on Indian govt backing amid US bribery charges

Two of the largest investors in the Adani group have made contrasting investment decisions after US authorities indicted Gautam Adani and two other directors in a $250 million bribery case.

French oil giant TotalEnergies, which has invested $3.2 billion in Adani group companies since 2019, said on Monday that it had decided to hold off on new investments until the allegations are clarified.

US-based GQG Partners affirmed its faith in the Adani group, expecting that the Indian government would back the ports-to-retail conglomerate. The American investor, though, added in a note to investors on 21 November that it expects the investigations to be long-drawn, hurting Adani group’s ability to borrow foreign capital.

In a separate news, Gautam Adani and his nephew, Sagar Adani, were summoned by the US Securities and Exchange Commission to explain allegations that they paid more than $250 million in bribes to win solar-power contracts, Press Trust of India reported. The case is set to test the long arm of US law, with prosecutors facing steep legal and diplomatic hurdles in their bid to imprison the Indian billionaire. His conglomerate plans to respond to the accusations after a legal review. Meanwhile, a US agency that agreed to lend more than $500 million to an Adani Group-backed port development said it’s still conducting due diligence on the project.

2.FIIs turn net buyers after 38 consecutive sessions, buy shares worth Rs 9,948 crore

After 38 consecutive sessions of selling, FIIs turned net buyers on November 25 after both benchmark indices gained on positive market sentiment post the elections in Maharashtra and the MSCI rejig. Domestic institutional investors (DIIs) net sold shares worth Rs 6,908 crore, while on the other hand, foreign institutional investors (FIIs) net bought shares worth Rs 9,948 crore, provisional data from NSE showed. DIIs turned net sellers after consistently buying for 13 straight sessions.

3.Apple rings in $10 billion in iPhone production freight on board ($15 bn at market value)

Apple Inc has reached a milestone, with its iPhone production’s freight on board (FOB) value hitting $10 billion during the first seven months (April–October) of 2024-25 (FY25). This marks a 37 per cent increase over the $7.3 billion FOB value from the same period in 2023-24 (FY24). 

The FOB value represents the price at which the product leaves the factory gate.

The estimated market value of this $10 billion FOB production is $15 billion, taking into account sales and distribution, marketing, margins, and logistics costs. Of this total, nearly 70 per cent — or $7 billion — has been exported, while the remaining $3 billion serves the domestic market. 

4.HUL approves de-merger of ice-cream business into separate listed entity

The board of directors of Hindustan Unilever (HUL) on Monday gave an in-principle approval to de-merge the ice-cream business into an independent listed entity.

Subject to necessary approvals and procedures, shareholders of HUL will receive shares in the new entity in proportion to their shareholding in the company, HUL said in a release.

“A separate listed entity will unlock fair value for HUL shareholders and give them the flexibility to stay invested in ice cream’s growth journey. Demerger will also facilitate a smoother transition for business as well as our people,” the release said.

5.COP29 Climate Deal

International negotiators struck a deal over the weekend to establish a climate resiliency fund, with wealthier nations committing $300B annually for developing nations by 2035. The agreement, which came together after the United Nations’ COP29 conference was extended by two days, fell far short of a stated $1.3T per year target.

Officials from developing nations—more than half of which are in Africa—have argued that while industrialised countries reaped the benefits of fossil fuels for economic development for decades, developing nations are more vulnerable to droughts, extreme weather, and rising sea levels.

The language of the deal allows for the $300B to be provided from sources like multilateral development banks and private companies in addition to public funds. China—the world’s largest emitter, is ironically still classified as a developing country—is also expected to voluntarily contribute to the financing.

6.Saudi Arabia is increasingly exercising a foreign policy that is leaving it out of step with Washington, analysts said. 

Talks with Iran, rapprochement with Qatar, and a growing willingness to wield its economic clout all point to a “Saudi first” foreign policy a chronicler of Crown Prince Mohammed bin Salman wrote for Bloomberg.

Riyadh’s willingness to hold discussions with Iran and Israel also means it can play a “new and useful role in moderating middle-east tensions,” two experts wrote for Foreign Affairs.

Still, according to the president of the Council on Foreign Relations, Saudi officials are focused inward, “determined to prevent the distractions of their dangerous neighbourhood from getting in the way” of economic development.

Michael Froman, president of the Council on Foreign Relations, reported from a trip to Riyadh that the kingdom was determined to keep regional instability from derailing Vision 2030, noting that achieving even a fraction of its goals would be “an astounding success.”

6.Huawei is poised to launch a phone running its own software, a sign of US-China splintering

China’s national technology champion Huawei is poised to launch its first flagship phone that can run its own apps on a fully homegrown operating system, in the latest sign of how technology is splintering into competing US and Chinese ecosystems.

The Mate 70 smartphone set to be released on Tuesday will feature HarmonyOS Next, which Huawei hopes to establish as a third major mobile operating system alongside Apple’s iOS and Google’s Android.

7.Singapore is a self-driving car paradise

Autonomous vehicles (AV) are largely synonymous with the U.S. and China, where big tech and automotive firms, including Google, Tesla, General Motors, Baidu, and Pony AI, have invested heavily in driverless vehicles.

But far from the Waymos, Cruises, and Apollo Gos, Singapore has slowly been rolling out more AVs to tackle issues ranging from labor shortages to land scarcity, as the vehicles can be deployed only when needed and can park more efficiently, needing fewer parking spaces.

While on-road trials in Singapore began in 2015, the pace has picked up recently, and this year has been particularly eventful. Authorities have greenlit self-driving robot sweepers for street cleaning and AVs to transport goods for FairPrice, the country’s largest supermarket chain. Changi Airport kicked off a two-year trial in July to test autonomous buses to ferry workers, while an all-terrain self-driving vehicle began delivering feed at the bird park.

8.Meta is struggling to respond to Bluesky’s success 

Meta’s Threads is losing ground to social media start-up Bluesky in capitalising on the exodus of users from Elon Musk’s X following Donald Trump’s election. 

Since election day, app usage of Bluesky in the US and UK skyrocketed by almost 300 per cent to 3.5 mn daily users, according to data from research group Similarweb.

 The site was boosted as academics, journalists and left-leaning politicians abandoned X, whose billionaire owner is a prominent supporter of the president-elect.

Prior to November 5, Threads had five times more daily active users in the US than Bluesky, which has just 20 full-time staff and was initially funded by Twitter when Jack Dorsey was its chief executive. Now, Threads is only 1.5 times larger than its rival, Similarweb said.

Bluesky has "blown past" its user growth projections so much that it's racing to get more servers to keep the site running smoothly, the social media platform's chief operating officer has said.

Rose Wang told Business Insider that the influx of new users at Bluesky over the past two weeks was "quite unexpected" and that the company's 20-person team has been in "firefighting mode."

9.The mystery of India’s female labour-force participation rate; The Economist

IN 2018 THE statistics office of the government of India released the first “periodic labour force survey”, designed to provide quarterly and annual snapshots of employment in the country. That year the proportion of women aged 15 and above who were in work was a miserable 23.3%, far below the global average of 53%. By contrast, the labour-force participation rate (LFPR) among Indian men was 75.8%.

But the rate has picked up healthily every year since, rising to 41.7% in the latest survey released in September. For a country marked by deep gender inequality, a change this rapid and in the correct direction seems like unalloyed good news. Is it?

Not everyone is convinced. One explanation offered by sceptics is that the rise is the result of changes in the way the government measures the rate. The International Labour Organisation (ILO), which does not include unpaid workers (such as those who help out on the family farm), pegs female LFPR lower, at 33% last year against the official 37%. Yet there is no disputing the trend. The ILO, like the government, shows the rate rising sharply in recent years, especially since the pandemic (see chart). Moreover, measurement changes may have had a one-time effect, says Amit Basole of the Azim Premji University in Bangalore, author of the “State of Working India” report. But it would not explain consistent rises.

Another cause for caution is that the rise does not appear to be driven by shifts in social norms. In many families it is considered a matter of some shame for the women of the house to work, carrying the implication that the men cannot provide. In rural areas, where much of the rise has occurred, the likelihood that a woman is in work declines with every extra thousand rupees her husband earns. There is no evidence that these long-established norms have shifted in recent years.

For clues about what is driving the rise, economists look at what work women are doing. “A lot of it is an increase in self-employment,” points out Ashwini Deshpande of the Centre for Economic Data and Analysis at Ashoka University near Delhi. This includes working on the family farm or running a small shop out of the home, but also things like rolling bidis, a type of cigarette, or making poppadums.

Mr Basole is of the view that the entry of large numbers of women into self-employment is the result of economic distress in rural areas. Rates of female participation in casual labour or fixed employment have declined in recent years even as more rural women work on family farms or on their own account, which “points to people trying to generate some sort of an income in the absence of opportunities,” he says. If economic distress is the cause women’s LFPR could fall again as their families’ prospects improve.

The other, more optimistic, explanation is that women are taking advantage of new opportunities. The government is serious about getting more women into the workforce, says Ms Deshpande, and has been pushing schemes to promote self-employment. Women have received more than two-thirds of loans under a government microfinance scheme aimed at encouraging non-farm businesses in rural areas. “This initiative likely encouraged more women to take up entrepreneurship, reflected in the growing number of self-employed female workers,” reckon analysts at Goldman Sachs, a bank. Yet average earnings from self-employment for women in rural areas remain stagnant. Ms Deshpande counsels patience: “We should give it time.” More women in the workforce is good news for India, and for its women. But it is only when they earn more, too, that it will be time to celebrate.