- Arvind's Newsletter
- Posts
- Arvind's Newsletter
1.The spin-off of Jio Financial Services (Jio Financials) from Reliance Industries has been on the anvil for awhile and the company fixed July 20, 2023 as the record date to determine shareholders entitled to receive shares in its new financial services entity.
Under the arrangement, shareholders of RIL will get one share each of Reliance Strategic Investment (RSIL) for every one share held in RIL as of the record date. Reliance Strategic Investment will be de-merged and later renamed and listed as Jio Financials. It will lend to consumers and merchants based on proprietary data analytics and will eventually branch out to insurance, payments, digital broking and asset management.
Though, an official announcement in regard to Jio Financial Services share price is yet to come but global brokerage Jefferies has estimated that Jio Financial Share price would be around ₹179 whereas JP Morgan has estimated Jio Financial Services share price to be around ₹189 apiece.
Jio Financials has potential to become a financial juggernaut, as it can potentially acquire at low cost customers from the ready cachet of more than 400 mn subscribers, Reliance Retail, which operates the largest retail chain and Reliance Cinema, its Entertainment platform.
It will worth tracking how Jio Financials executes in the market place and competes with likes of Bajaj Financials, private banks as well as digital rivals like Paytm.
2.It is early stage for India in trying to develop a chip manufacturing and R&D eco-system so it it is not surprising there are challenges. The ill-fated Vedanta-Foxconn partnership which has been struggling for sometime to tie-up a technology partner has decided to separate and look for partners separately.
The semi-conductor market is cyclical and goes through boom followed by over-supply as new capacity exceeds demand. Currently, $160 billion global memory chip industry is going through a rough patch, with consumers and businesses tightening their purse strings – and that’s put a damper on chip sales worldwide.
According to market research, that drop in demand dented chip prices by as much as 18% last quarter, so it’s no surprise Samsung, the market leader, reported a likely 22% drop in sales compared to the same time last year. And its operating profit fell a staggering 96%, marking the company’s lowest profit since 2009. It will need deep pockets to compete in this market.
However, industry peers like Micron and SK Hynix think the industry might be bottoming out. And some analysts are latching onto that idea, expecting Samsung’s profit to bounce back in the second half of the year. After all, the rise of AI could be a game-changer: AI servers need up to six times the memory capacity of standard ones, which could give the market a much-needed boost.
3.The world needs more battery metals. Time to mine the seabed say some but opposed by many conservationists.
The International Seabed Authority (ISA), is established to preserve deep-sea ecosystems and regulate mining there. China, which holds five of 31 exploration licences worldwide and dominates the global mineral market, favours seabed mining. So do Russia, Norway, and South Korea. Sixteen countries, including France, Ireland, Germany, Chile, and climate-vulnerable Pacific island nations, are opposedSome argue that a greener and AI-powered future isn’t possible without underwater mining for metals (cobalt, nickel, REEs, manganese, etc.) that will help us get there—especially because terrestrial mines are becoming less productive.
But even companies with a stake in said future aren’t buying this argument. Volvo and BMW—which produce EVs—and Google and Samsung oppose deep-sea mining. Additionally, ISA has no frameworks for environmental harm, no compliance monitoring system, and no scientific assessment group to vet applications.
Scientists have warned that the practice could wipe out entire ecosystems with blasting, noise pollution, and the spread radioactive minerals.
4.A SpaceX Falcon 9 booster rocket completed its 16th mission, a record. The first-stage rocket, which had its inaugural launch in May 2020, landed successfully on a drone ship, after helping carry a payload of Starlink satellites into space on Sunday night. Falcon 9s were originally intended to be used 10 times each before decommissioning, but SpaceX’s vice president said the vehicles were “still looking really good” so they tried getting them ready for 15. Now, one has pushed past even that.
Reusable launchers have slashed the cost of space flight: Carrying a kilogram to low-earth orbit with some Falcon rockets is about 40 times cheaper than using the now retired Space Shuttle.
5.How China is fighting back in the semiconductor exports war
China has been on the receiving end of semiconductor export restrictions for years. Now, it’s striking back with the same tactic.
On July 3, the Chinese Ministry of Commerce announced that the export of gallium and germanium, two elements used in producing chips, solar panels, and fiber optics, will soon be heavily restricted. Exports of the materials will need to be approved by the government, and Western companies that rely on them could have a hard time securing a supply.
Even though the news immediately sent the price of gallium and germanium up, the curbs are not likely to hit the US as hard as American export restrictions have hit China. Zeyi Yang, China reporter of MIT Technology Review , explains why
