Arvind's Newsletter

1.JSW Group (Sajjan Jindal) is on the upswing this week, with listing of JSW Infrastructure, its port and maritime infrastructure business, at premium of 20% on listing price, in a weak stock market. But the more interesting news on the group was that it and SAIC Motor Corporation have finalised terms of agreement for an alliance involving MG Motor India, the Economic Times reported. Morris Garages, is a fully-owned subsidiary of China-based SAIC. Legal documentation is on and a formal statement is likely around Diwali. When and if this happens, it would mark the first large group entry in to the auto sector after many years.

As per negotiations, the new alliance plans to release electric cars under its banner by January 2024. The deal could raise MG Motor India's valuation near $1 billion, it added. In the initial phase, Jindal will own 32-35 percent of MG Motor India, SAIC will own 51 percent, employees and dealers will own 6 percent; and an unidentified domestic financial institution will own 6-7 percent, as per the report.

Accumulated losses will be written off against SAIC's equity, and a plan for change of control is underway to avail all tax benefits. Once losses are removed, the plan is to go for SAIC to undertake an offer for sale (OFS) to gradually off-load its stock down to 38-40 percent; Jindal will also increase stake to 49-51 percent, and employee-dealers to 8-9 percent.

2.Investors increasingly fear the U.S. falling into a recession, worried by interest rates remaining elevated for a protracted period.

Yields on longer-duration Treasury bonds recovered slightly from 16-year highs but have suffered a hammering that rivals their plunge in the aftermath of the dot-com crash reports Bloomberg. Meanwhile, oil prices suffered their biggest one-day fall in more than a year yesterday with $5 drop to $85.8 reported the Financial Times. Mohamed El-Erian, a bond investor who had been buoyant on the U.S. economy’s prospects, admitted in the Financial Times that he was “now less confident of what is in store in 2024,” and Goldman Sachs analysts said in a note to clients that “our conversations suggest investors worry again about a … 2024 recession.”

3.MIT Technology Review has an interesting interview with DeepMind cofounder Mustafa Suleyman, also the author of a recent book,” The Coming Wave: Technology, Power, and the 21st Century's Greatest Dilemma.” He opines that Generative AI is just a phase. Whats next is Interactive AI. Read on.

4.Dan Ariely and Francesca Gino became famous for their research into why we bend the truth. Now they’ve both been accused of fabricating data, writes Gideon Lewis-Kraus in the New Yorker magazine. He probes the replication crisis facing behavioural economists.

5.City of Light or City of Bites? France Tries to Ease Bedbug Anxiety.

With less than a year to go before millions are expected in Paris for the Olympics, a wave of widely publicised reports of bedbug infestations has put French authorities under pressure.

After a string of viral posts on social media purporting to show specimens crawling across the seats of trains, cinemas and subways, photos of bedbugs are now being splashed across newspaper pages. And the insects have been discussed endlessly on television talk shows around the country in recent days, fueling nationwide anxiety, if not alarm, especially in the French capital.

While evidence that bedbugs are suddenly sweeping the country is mostly anecdotal, experts say that the pests have resurged in households in Paris, New York and other cities over the past decades because of a boom in international travel and the bugs’ growing resistance to pesticides after they had been nearly eradicated in the mid-20th century.

The run-up to the Olympics is fertile ground for hand-wringing about a country’s preparedness — in China, it was smog; in Brazil, it was water pollution; in Greece, it was security — and with less than a year to go before Paris hosts the Summer Games, the sudden spotlight on bedbugs has left President Emmanuel Macron’s opponents itching for a fight.