- Arvind's Newsletter
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- Arvind's Newsletter
1.The rich are getting richer in India, if a new report is to be believed. According to Knight Frank’s ‘The Wealth Report 2023’, India’s ultra-high-net-worth individuals (UHNWI), with net worth over $30 million, is estimated to rise by 58.4 per cent in the next five years from 12,069 in 2022 to 19,119 individuals in 2027.
India’s billionaire population is expected to increase from 161 individuals in 2022 to 195 individuals in 2027. The Indian high-net-worth-individual (HNI) population, with asset value of $1 million and more, which was recorded at 797,714 persons in 2022 will also rise to 1.65 million, a growth of 107 per cent in a five-year period.
However, the threshold to entering the club of the country’s wealthiest 1% is $175,000 in India. In the US, it is at $5.1 million
Bank of Baroda (BoB) Now Has a Business Model as Competitive as any Private Ban, report the Economic Times based on an interview with Sanjiv Chadha, MD and CEO of the bank. Some excerpts:
“Today, we are growing our retail loans organically at 27%, which is faster than probably any private sector bank. In BoB World, we have an interface that is as sophisticated as that of any other bank. We have also been able to attract talent from almost every bank, retain it, and also use it in terms of key functions to upgrade ourselves. As we speak, our chief financial officer, chief risk officer, chief digital officer, head of collections, head of home loans — all of these are very senior professionals from the market. To sum up, we now have a business model for a public sector bank (other than SBI), which can be competitive as a private sector bank.”
“One must recognise that the corporate credit cycle had turned even during Covid. Even at that point, we had articulated that since the corporate credit cycle had turned, despite the challenges in MSME and retail, we would expect credit costs to come down. And fortunately, that’s how it has transpired. But I think it is important to make sure that you don’t have the same kind of issues again, and that’s where having a chief risk officer who’s a very experienced professional is very valuable. It actually gives so much confidence to the underwriting team and to the business. We are fortunate to be in a very favourable credit cycle, but that does not mean that this is going to continue indefinitely. And you need to prepare for that time when it actually is going to become unfavourable again.”
The biggest risk which is developing is the technology risk and it can have an impact on operational resilience. We have seen instances where banks have been put into difficult situations because of the fact that the technology platform was not robust enough. So that’s something which we are acutely conscious of and we are preparing for. So today as we speak, we are implementing a large project with one of the big four firms to improve the operational resilience of the bank and also to secure certification that our processes are standardised and robust. This is one thing that is going to test the system as we move ahead.
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3.China’s edge on E.V. car batteries.
Despite billions in Western investment, China is so far ahead in making batteries for electric cars that the rest of the world may take decades to catch up. Here’s how China controls each step of lithium-ion battery production, from getting the raw materials to making the cars reports the New York Times:
Mining: China has bought its way into a cheap and steady supply of essential rare minerals needed to make the batteries. It controls 41 percent of the world’s cobalt, mostly by owning mines in the Democratic Republic of Congo. Investments in Indonesia will help China become the largest controller of nickel by 2027, according to a consulting firm.
Refining: Regardless of who mines the minerals, nearly everything is shipped to China to be refined. Chinese companies are supported by the government with cheap land and energy, and can refine minerals at a larger volume and a lower cost.
Components: China makes most of the parts that go into a battery. It has recently invested in a cheaper alternative to the cathode, which is the positive terminal of the battery. These cathodes now account for half the market.
Assembly: China makes the most batteries — and the most cars. Labor costs are lower, and there are more equipment manufacturers, so the country can build battery factories at nearly half the cost of others in North America or Europe, an expert said
4.Russia exported more oil in April than in any month since its full-scale invasion of Ukraine last year, with almost 80 per cent of crude shipments flowing to China and India, according to the International Energy Agency. The rise in shipments reflects Moscow’s success in finding both new buyers for its oil since Europe blocked imports and new vessels after its access to western shipping was restricted.
The EU is now discussing its 11th sanctions package on Russia since its invasion of Ukraine last year reports the Financial Times. At the same time, “The EU should crack down on India reselling Russian oil as refined fuels, including diesel, into Europe,” the bloc’s chief diplomat said.
India has become one of the biggest buyers of Russian crude oil since Moscow’s full-scale invasion of Ukraine, with its refiners earning large margins by buying heavily discounted crude that is now largely barred from the EU, before selling full-priced fuels into Europe.
Indian refiners, for example, use crude from multiple different countries including Russia, making identifying the exact origin of a barrel of diesel or gasoline challenging.
5.Pivot to Nuclear Energy :Europe (excluding Germany) is reinvesting in or reevaluating nuclear power after Russia’s full-scale invasion of Ukraine last year highlighted the region’s reliance on energy from Moscow.
Electricity prices dropped 75% in Finland after a new nuclear power plant opened. The huge Olkiluoto 3 reactor 9 (a much delayed project) finally went online in April.
Much of France just passed a law accelerating the construction of mew nuclear reactors , while Poland, Hungary, and Sweden are also looking to expand their nuclear fleet.
The energy business outlet OilPrice.com says we are “witnessing the dawn of a new nuclear era,” although it warns that the world needs to build nuclear expertise and supply chains that are not reliant on China and Russia, which invested in their nuclear industries while Western nations neglected theirs.
