China halts, Japan vaults

Good morning! It’s been 134 years since crates of soap marked ‘Made in England by the Lever Brothers’ touched Indian shores. Today, Hindustan Unilever (HUL), the Indian arm of the very-British FMCG behemoth Unilever, is becoming the jewel in the crown. Country chief Sanjiv Mehta told The Financial Times that India will surpass the US as Unilever’s largest market by value. Inflation notwithstanding, HUL had bumper sales in 2022. A major reason? Indian consumers are buying larger packs for optimum value. So much for the sachet economy.

A programming note: We are taking a publishing break on Thursday (October 6) on account of Dussehra. The Signal and The Signal Daily will resume publication on Friday.

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The Market Signal*

Stocks: It’s a good time to be a commodities exporter. Indonesia, a big exporter of commodities such as coal and palm oil, is reaping the benefits. The Jakarta Composite Index is up 6.51% since the beginning of the year, making it the best performing market in Asia-Pacific, CNBC reported. 

Quoting Bank of America research, Investopedia said that commodities have returned 28% this year. The dollar earned 17.7% and oil investors made 9.2%. Bitcoin was the worst performer, losing nearly 60% of its value, followed by stocks at 23.7%. 

Early Asia: The SGX Nifty climbed 1.11% at 7.30 am India time. The Hang Seng Index rose 4.32%. Nikkei 225 was marginally up (0.19%).

AVIATION

Gourmet Fare Awaits at 30,000 Feet

Not like passengers needed any wooing to fly again, but Indian airline cos are looking to whet appetites.

Truffle oil scrambled egg with chives, mushroom cheese omelette, and Malabar chicken curry are just a few of the options available now on Air India. Tata's Vistara and AirAsia have also followed suit. Expect steamed vegetable bao, cracked wheat salad, and sabudana khichdi on IndiGo.

Backpedal: There was a time when IndiGo took deliberate decisions to weigh less and keep costs low. Like going for a light coat of paint and not serving tea and coffee to avoid spillage and seat stains.

But airlines today are going all out to win customers. A revamped food menu adds to costs at a time when fuel prices are already rising, and new competition (Akasa Air, Jet 2.0) is trickling in. Will the gamble pay off?

FINTECH

Anatomy Of The Merger That Wasn’t

It was supposed to be the second-largest acquisition of an Indian digital company by an MNC. But so much has happened in the year since Prosus—the investment arm of Naspers—said it’d buy BillDesk that a $4.7 billion all-cash deal seemed foolhardy. The trigger? Global market corrections.

Details: In 2021, news broke about Prosus’ Indian subsidiary PayU acquiring BillDesk. If cleared by the Competition Commission of India (CCI), the deal would be the largest in India’s startup sector after the $16 billion Walmart-Flipkart deal.

But long-drawn CCI clearance and a bull-turned-bear environment—not least a global fintech downturn and Paytm’s cratered stock—made Prosus wary about BillDesk’s near-$5 billion valuation. It had just sold billions in Tencent stock and walked away from investing in insurtech company Acko.

BillDesk wouldn’t entertain a revised valuation, however. The end result is the scrapping of a merger whose total payments value would’ve eclipsed that of Razorpay.

TUNE IN

Facebook Is Making People Lonely

In this episode of The Signal Daily, we bring back two stories from our archives. Young adults are feeling lonely, and we have Facebook to thank. Listen in to understand how Facebook apps are making us feel lonely.

In other news, we talk about vegan leather—a probable bandwagon in the near future. But, the question remains, is it really environment-friendly? Tune in to know more!

🎧The Signal Daily is available on Spotify, Apple Podcasts, Amazon Music, and Google Podcasts, or wherever you listen to your podcasts.

GREEN FINANCE

Japan Picks Up Where China Left Off

Nature abhors a vacuum. So does finance.

Japan is planning to step into China’s shoes in green financing in Asia. For many years, China had taken the lead in providing infrastructure finance to many developing countries, especially those in Asia, as part of its ambitious Belt and Road Initiative (BRI). But rising indebtedness among countries that owe China has sullied the BRI as “debt-trap diplomacy”.

Stepping back: Combined with its economic troubles at home, China is scaling back on debt, providing Japan with an opportunity to take the reins of climate-change financing in Asia.

The Signal

In the high-stakes game of international finance, the one who has the money also gets to set the rules. For example, when the IMF or the World Bank lend money to a country, they lay down conditions to be met and milestones to be achieved.

Japan reckons Asia-Pacific nations would need about $40 trillion to achieve net-zero emissions by 2050, and it is stepping up to provide some of that. Being the principal financier would help it lay down the rules and drive the green transition framework in the region.

Japan, which is falling back on fossil fuels for its energy needs, believes that the norms for Asia have to be different—a point that India also has been making. It would benefit borrowers too if aid and debt are denominated in yen, as yen financing is the cheapest in the world due to Japan’s ultra-easy monetary policy.

FYI

Back on the table: Shying away from a court battle, Elon Musk has offered to buy Twitter at his original bid of $54.20 a share. Twitter shareholders had cleared the deal on September 13.

Upgrade: Shipments of India-made iPhones crossed $1 billion since April this year and are expected to touch $2.5 billion by March 2023—nearly double the volume of exports from April 2021-March 2022.

Clapback: VideoLAN, the non-profit entity behind VLC player, has issued a legal notice to the Indian government for banning its website.

Lip service: Shell CEO Ben van Beurden—who took home a pay package of $8.2 million in 2021 and presided over the 2016 Gulf of Mexico oil spill—wants European governments to tax the rich in order to help the poor.

Deal?: The Competition Commission of India has given the nod to the Zee-Sony merger, on condition that the two parties don't misuse their dominance in the market.

In the bank: Indian EV startup Euler Motors raised $60 million in a Series C round led by Singaporean sovereign fund GIC.

FWIW

Phased out: Parisians will eventually have to bid goodbye to a cultural symbol: after more than 120 years, the Paris metro paper ticket will be discontinued in 2025. It was supposed to have happened sooner, but the Russia-Ukraine war and a global chip shortage delayed the contactless option. On the bright side, the new project will save at least 50 tonnes of paper.

The bots are coming: The United States is grappling with a nationwide shortage of pharmacists and technicians, so pharmacy chain Walgreens is turning to a network of automated drug-filling robots. Walgreens is looking to save up to $1 billion a year with this project. And pharmacists’ workload is being cut by 25%. Win-win.

Desert wonderland?: Saudi Arabia will host the 2029 Asian Winter Games. Yes, you read that right. The Gulf state plans to build a mountain resort in NEOM, its $500-billion futuristic desert megacity. Called Trojena, the new resort will have outdoor skiing, a man-made freshwater lake, and a nature reserve. Sportswashing ftw.

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