SBI’s choice: BlackRock or black gold
Also in this edition: Hyatt Regency temporarily shut, Paul vs Mayweather snoozefest, New PUBG ban?
Good morning! You know what’s not fun? Watching two grown men, billionaires, battle for space. Jeff Bezos, previously known for such hits as Amazon, has declared that he will rocket to space next month. Wonder what Elon Musk will tweet next.
Anyway, today’s stories are grounded.
Do you want to own a football club?
Facebook: publisher or platform.
China could offer clues to how India recovers.
Between A Black Rock And BlackRock
India’s largest lender, State Bank of India, is on the horns of a dilemma. The world’s largest asset manager, BlackRock, and Norwegian life insurer, Storebrand, have been urging SBI to cut exposure to coal projects. The two global investors together hold less than 1% of its equity.
National duty: The government-owned bank can hardly afford to stay away from coal which is key to the country’s energy security. About 70% of India’s electricity comes from coal-fired generating stations. The country has been fast adding renewable energy capacity and SBI has been funding that growth. Its power sector portfolio is worth INR 1.8 trillion of which loans to renewable projects stand at INR 319.2 billion.
Capital activism: The 2015 Paris Climate Agreement triggered a global push to reduce use of fossil fuels, especially coal. Private investor activism is also rising and many global funds are forcing companies they invest in to fall in line or risk capital flight. French asset manager Amundi SA threatened to sell its holding of SBI’s Green Bonds on news that the bank was contemplating lending INR 50 billion to the Adani Group’s Carmichael mine project in Australia.
Your Chance To Own Manchester United
Something almost miraculous happened in the world of football over the weekend. Not on the pitch in front of fervent fans, but behind the scenes for them. The owners of Manchester United — one of the biggest football clubs in the world, valued at over $4 billion — announced that its fans will be allowed to buy shares in it. What’s more, this new class of shares will come with the same voting rights as those held by the owners. This could lead to fans getting an official say in matters that sway their emotions on a weekly basis.
The move comes in part as an apology from the owners for participating in the attempt to form a breakaway league by a handful of elite European clubs. Protests from fans of most of those clubs followed, with Manchester United even having a game rescheduled due to a pitch invasion. With this olive branch, at least they will have a better way to be heard.
As to why it’s miraculous, perhaps this Reuters graphic on how football, once the “working-class people’s game”, has been taken over by big money will help you understand.
Facebook Steps Closer To Being A Publisher
Facebook is rolling up its sleeves and preparing to launch its newsletter service (and Substack competitor), Bulletin. As early as the end of this month. The details here are simple. Much like Substack (and Revue), Facebook is going to offer writers the opportunity to write to its humongous audience. Reports say that with Bulletin, readers would open the story or the newsletter in a “new browser window” or tab (which is, the opposite of Instant Articles, remember?)
At this point, there is no conversation about the actual cost of subscription, despite previous suggestions that Facebook might not take a cut, unlike Substack. Facebook, keen to show its commitment to journalism, has said it will create a $5 billion fund for these writers. There is money to go around. The platform, we think, may also want to skip the subscription conversation for a while or it will have to share revenue with Apple and Google.
Avoiding controversy: Going by Facebook’s initial recruitment of writers, there’s a clear attempt by the social networking site to avoid controversial topics that add to the polarising nature of the platform. By that, we mean politics. To begin with, reports suggest that Facebook is going light (and niche), with high-interest subjects that also draw engagement — sport, fashion, environment, to name a few. And of course, “local news”, which has, over the years, been a victim of Facebook’s own initiatives.
This is yet another step from Facebook towards enabling a creator ecosystem. The once-humble newsletter is becoming an important content destination, particularly with the growth of services like Substack and Revue (now acquired by Twitter). But it also nicely dovetails into Facebook’s broader content ambitions: the audio/Clubhouse-like feature.
So what does that mean? Newer format-agnostic content can only be a good thing for Facebook. Its highly engaged audiences (and sheer reach) can expose a writer’s newsletter or audio program to billions of users. But what it also changes, given that Facebook is actively recruiting writers (and creators) for these content offerings, could be the answer to the multi-billion dollar question. What exactly is Facebook — a platform or a publisher? Bulletin might have just pushed it towards the latter.
The Chinese Crystal Ball
China’s post-pandemic life has been active for a while. Its household income grew 13.7% in the first quarter of 2021 despite no stimulus cheques, since it reopened its economy rather fast. Yet, consumers haven’t been spending much, buying only what they absolutely need. While retail is up, sales of services have been slow.
Why so cautious? A lot has happened over the past year and a half. Many people had to dip into their savings to keep up with job losses. Also, while China has largely opened up, fear of the Covid-19 virus is still around. Such lingering worries have forced consumers to spend less and save more.
Trendsetter: China’s consumer spending habits are a peek into what might happen elsewhere in the world. People are unlikely to go right back to pre-pandemic shopping levels. There may be a similar trend waiting to play out in the Indian economy. Even if the country manages to get enough people vaccinated and open up soon, spending is unlikely to pick up quickly.
Yesterday, we looked at how consumer confidence has dipped in India with the pandemic shrinking the middle class. Fewer people may go for the latest smartphone models as they ponder whether or not a third wave will strike.
What’s On Sale This Season?
A better question would be what isn’t. Consumer goods, especially snacks and beverages, are being heavily discounted across supermarkets and e-commerce platforms to clear out the past two months’ inventory.
If you remember, consumer goods companies had witnessed a strong recovery in the last quarter. They shelved discounts to trim costs and built up inventory anticipating summer demand. And then came the lockdowns.
Lost summer: With lockdowns keeping stores shut and customers confined to their homes, demand remained sullen. The inventory is now being routed to e-commerce where discounts as high as 30-70% are being offered on beverages and snacks.
Temporary: Note that the deep discounts will probably end as soon as old inventory is cleared out. Keeping the situation in mind, most companies have already reduced production.
Other sectors: Gold dealers, this week, are offering a discount of up to $12 an ounce over official prices. Automobile companies Maruti Suzuki, Hyundai, Honda, etc. are giving discounts ranging from INR 33,000 to INR 150,000. With air conditioner sales also suffering, retailers and companies are flooding the market with offers such as EMI and cashback.
Catching Up With Covid
1,00,636: The number of new cases of Covid-19 reported in India for Sunday.
2,427: Deaths due to Covid-19 reported in India for Sunday.
Free for all: Prime Minister Narendra Modi announced yesterday that the central government would provide free vaccines to all adults from June 21. He also said the centre would buy 75% of the total vaccines produced by manufacturers and provide them to state governments free of cost. The remaining 25% can be procured by private hospitals, but their charge will be capped at INR 150 per dose.
Watch out: A new variant of the Covid-19 virus, B.126.96.36.199, has been detected by NIV Pune in India, from international passengers.
Breakout in China: Guangzhou city authorities are on high alert after a recent uptick in Covid-19 cases, most of which are attributed to the Delta variant of the virus, first discovered in India.
What Else Made The Signal?
Last call: One of Mumbai’s most popular hotels, Hyatt Regency, announced that it will be shutting down “until further notice” and that it can’t afford to pay salaries any longer. The hospitality industry has been asking for a bailout from the government for a year now.
Much ado: The much-hyped exhibition boxing fight between YouTube-famous Logan Paul and retired world champion Floyd Mayweather drew so many viewers it crashed Showtime servers. Not that they missed much.
Pad up: The BCCI has reportedly finalised dates for the remainder of the 14th edition of the IPL. It’ll start September 19, 2021 with the final to be played on October 15.
Losing battle? After an Arunachal Pradesh MLA and a West Bengal MP, a parliamentarian from Telangana has become the latest political figure to call for a ban on the rebranded PUBG offering in India.
Delhivery date: The logistics company’s CEO, Sahil Barua, has said that the company will look to list in India between December 2021 and March 2022, with a public offering of shares worth $500 million.
Okay, fine: Google will pay around $270 million in fines and change some business practices as part of a settlement with French antitrust regulators.
Mental health boost: Now&Me, a Delhi-based startup that provides a community platform to discuss mental health issues, has raised $1 million in seed funding.
Run baby, run: The world’s fastest animal, the Cheetah, has been missing in action in India for a while. For more than 50 years, to be precise. But it’s coming back. For the first time, eight cheetahs are likely to make the trip from South Africa to the Indian wilderness in November, being relocated for conservation. The large cats are to be homed in Kuno national park in Madhya Pradesh and two wildlife sanctuaries in Rajasthan.
The music never fades: In a world teeming with bad news, it’s always nice to find some silver lining. Twitter has thrown up a heartwarming video where a Japanese maestro suffering from Alzheimer’s is taken to a concert by a fellow maestro. As it turns out, Alzheimer’s may rob you of your memories but not your love for music. Watch Maestro Seiji Ozawa dance to an orchestra’s tunes, led by Maestro Zubin Mehta. Some things are just too precious.
The art of paddy: There are innumerable ways to create art. Today’s story is about a rice field designer from China. In the midst of the pandemic, Liu Dong has created a piece of art using rice crops and GPS, fashioning eye candy that can catch your attention from up above. Dong claims there are nine different colours of rice in the world and his latest design, The Eight Fairies, uses some of them to paint a picture across more than 7,000 square meters.