Wednesday, 29th July ’20


The Morning Tea

Good morning, welcome to another refreshing day. Hold on with us as we take you on this journey to become smarter every day. In a recent report, it was discovered that COVID-19 cost global tourism $320 billion. Also, cinema halls and gyms are likely to open after a long closing haul. As the economy eventually gets back on feet, we request our readers to continue to take precautions while moving out of their secure homes.

Additionally, here are a few words of Sir Richard Branson to start your day.

If somebody offers you an amazing opportunity and you are not sure you can do it, say YES and then learn how to do it later.

MARKETS

  • Markets: Markets neared a 5 month high with strong trends in other Asian markets. There are hopes of another US economic stimulus as republicans proposed a $1 trillion coronavirus aid package. Markets can be expected to reach higher in the short term. IndusInd bank quarterly profits tank 68% to Rs 461 crore. Nestle profits jumped 11% to Rs 487 crore. NIIT Tech profit dipped 21%

TECHNOLOGY & INNOVATION

  • Big Tech is even buying amid a world economy ravaged by the coronavirus pandemic. The Big 5, FB, Google, Amazon, Microsoft and Apple, have announced 27 acquisition deals until June 30 this year which is 6 more than what they had in the same period last year. A big worry for economists and lawmakers is whether they are potentially choking off competition. 

  • Digital banking platform Niyo has acquired mutual fund investment startup Goalwise to accelerate their road map for advanced features which includes international and domestic stocks, robo-advisory and auto-invest products. Goalwise currently has over 60,000 users with Rs 850 crore AUA

  • Israeli startup Nanox raises $110 million in series B to take on the world of medical imaging and imaging analytics with hardware that reduces the size and cost of scanning equipment, plus software that improves the quality of images. The production costs are around $10,000 compared to $1-3 million for the CT scanner. Nanox has already signed with 13 countries. 

WHAT ELSE IS COOKING

  • Flipkart launches 90-minute delivery service: The new hyperlocal service called ‘Flipkart Quick’ promises to deliver products from local Flipkart hubs in just 90 minutes. It aims at digitizing kiranas by integrating them into e-commerce marketplace. Starting off from Bengaluru, the service will expand to 6 other cities in a few months. With a mandatory minimum delivery fee of Rs. 29, customers can get their deliveries between 6am to midnight.

  • Tata Steel to commission its 1st scrap-based plant in Rohtak: In collaboration with Aarti Green Tech Ltd, Tata’s new Rohtak plant will have an annual capacity of 5 lakh tonnes. The facility would be equipped with scrap processing equipment such as shredder, baler, material handler etc. The plant aims to enable a circular economy and a sustainable tomorrow for India.

  • Royal Enfield’s “Service on Wheels” initiative: The premium bike-manufacturer has rolled out a doorstep service facility called “Service on Wheels” for its customers, amidst the COVID-19 situation. Under the initiative, the company has deployed 800 units of purpose-built Royal Enfield motorcycles across the dealerships in the country. Customers can book the ‘Service on Wheels’ by contacting their nearest Royal Enfield dealership outlet, the company noted.

IN-DEPTH ANALYSIS

Remittances to India estimated to dip by 25% in FY 2021

Why is it in the news?

As per the Global Banking Group, the remittances to India are expected to decline by 25% in 2021, due to COVID-19 induced economic crisis. Remittances refer to the value of monetary transfers that are sent by the workers residing abroad, for more than 1 year to their home country. 

How was the prior scenario?

  • In FY 2020, India was the largest recipient of remittances (in value) in the world, amounting to 2.7% of its GDP
  • More than half of those remittances came from Indian workers residing in the Gulf region

 What could trigger this decline?

  • Recent job losses faced by Indian workers in the Gulf along with many furloughs in the offing
  • 10% decrease in oil prices reduces remittances to India by 7% in the long run, as per the group’s report
  • Weak economic outlook of the US can trigger employment and incomes of migrant workers adversely

Remittances are important for maintaining the stability of current account balance and aiding government programs on child labour, education, poverty alleviation, etc

MANAGERS’ CORNER – Finance With TMT

M&A feeds off a downturn and covid has not registered a blip in Fintech. Square acquire European peer-to-peer payments startup Verse, Mastercard acquire API provider Finicity, and Credit Sesame acquire the Canadian challenger bank Stack. 

In India the PMI contracted by a record amount in April and hasn’t improved much since. Market capitalization declined significantly from December 2019 to May 2020, partly as a result of a net outflow of more than $5 billion in foreign investment from January to April. This has made inorganic growth, or M&A, essential.  

A Portfolio divestiture is pertinent to India Inc. According to a McKinsey survey, five Indian corporations, with combined revenues of $80 billion in 2019, revealed that the top three subsidiaries in each conglomerate accounted for at least 70 percent of the group’s earnings. 

The remaining subsidiaries,100 or more per group, contributed less than 30 percent of earnings and had most of the debt in each group. Considering the liquidity crunch and scarce capital at the moment, they could thrive under different ownership – one that regards them as a core business.

THE MILLIONAIRE MINDSET- Person of the Day

Phil Knight- The Shoe King

Phil Knight is the founder of Nike and in his best selling book “Shoe Dog”, he narrates his journey and how he made Nike the global brand it is today. Here are some of the best tips from the entrepreneur who made Nike an international sensation.

  1. Use your 20s to learn and explore: Phil traveled to multiple countries for both culture and business to learn all he could.
  2. Believe in what you do: Whatever you do might end up not having everyone nodding to your ideas. It is your belief that will carry you forward.
  3. Just do it: If something needs to be done, or is simply a good idea, go for it. Doing things is the only way to know if you were right.
  4. Find trustworthy partners in your job and life: Loyal people are a scarce resource and a gift. Keep them close and hold them tight in your journey.
  5. Don’t be reckless but if you decide to go all-in, don’t look back
  6. Always have a plan B: There should always be a backup plan if you ever fall back. These plan Bs will always give a strong sense of power and ability to take risks.
  7. Offer your team hope and cause to believe in:  Your team is what will define you. It is your responsibility to ensure that your team can see your vision and seek the same aspirations.

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