Our Top Reports For Today
- (00:00) Stories Of The Day
- (01:10) Stock Markets continue to hit record highs on political continuity. S&P booster for India.
- (07:39) Moody’s downgrades China
- (08:31) Global CO2 emissions from burning fossil fuels set to hit record high.
- (09:42) November sees highest pharmaceutical exports on surging demand from US, Europe.
- (16:06) Digital powers music to a Rs 12,000 crore industry and growing, says EY report.
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Markets & More
The party to celebrate the BJP’s wins in the three northern states of Rajasthan, Madhya Pradesh and Chhattisgarh continued in the stock markets as they hit record highs for a second straight day.
The markets continue to bet on political and economic continuity in the general elections of 2024 or a return of the BJP in a comfortable majority.
The BSE Sensex crossed the 69,000-mark decisively and hit a record high of 69,381 during the day. The index closed at 69,296, up 431 points.
The Nifty50 hit a new high of 20,864 before settling 168 points, or 0.8 per cent, higher at 20,855.
Adani Group stocks continue to rule the bourses, having recovered substantial parts of the losses incurred on the selling pressures they saw in January after a short seller alleged that the Group was buying its own stock and rigging its books.
Founder Gautam Adani is now the 16th richest man globally. His rank rose three places in the Bloomberg Billionaires Index in less than a week, pumped by a 30% gain in two sessions, which has seen his wealth surge by over $4.41 billion to $70.2 billion, though still down by $50.3 billion, in contrast to January.
India is set to become the third-largest economy by 2030, and S&P expects it to be the fastest growing major economy in the next three years (see chart 3).
A paramount test will be whether India can become the next big global manufacturing hub, an immense opportunity, S&P said in the India segment of its report titled Global Credit Outlook 2024: New Risks, New Playbook.
Developing a strong logistics framework will be key in transforming India from a services-dominated economy into a manufacturing-dominant one. Unlocking the labour market potential will largely depend upon upskilling workers and increasing female participation in the workforce.
Success in these two areas will enable India to realise its demographic dividend. In the automotive sector, India is poised for growth, building on infrastructure, investment, and innovation.
Speaking of automotive. The economy is looking strong for now, with growth having come in at 7.6% for the July to September quarter but the consensus amongst economists is that it will start slowing down in the current and next quarter.
One indicator of demand contraction could be passenger vehicles sales which grew at 7.9% so far for the year and almost mirroring GDP growth - so far that is.
Shashank Srivastava, senior executive officer of marketing and sales at Maruti Suzuki told BQ Prime in an interview that his expectation was that this 7.9% will become 6.1 -- 6.2% by the end of the year."
Demand for entry level cars has already fallen reflecting the income squeeze at the lower end while SUVs which were powering sales of overall passenger vehicles are now slowing down.
SUV sales have risen by 26% in the current fiscal so far and contributed over 50% to the overall sales in the last three months, Srivastava said. In contrast, sales of mini and micro cars tumbled to 35,000 units in the September quarter, a 75% drop compared with five years ago.
FADA, the principal association of automobile dealers, has complained in interviews to The Core about the extremely high levels of inventory, over 63 days, that they have been holding. This is compared to half of that around 35 to 40 days last year at the same time.
Two wheelers are around 40 to 45 days now and last year as well.
All time high gold prices are prompting some Indians to exchange gold jewellery for new pieces as demand rises during the wedding season.
More Indians are looking to reuse their gold, and the higher prices mean imports will remain pressured in the coming months, Surendra Mehta, national secretary at the India Bullion and Jewellers Association Ltd. told Bloomberg.
Consumers have been buying to meet wedding-related needs, but are otherwise largely staying away from the market, he said.
Spot gold hit a record high on Monday and has risen more than 10% since early October on speculation the Federal Reserve will cut rates early next year.
A weak rupee means bullion is even more expensive in India, which is totally reliant on imports.
Prices in India have been moving around 60,000 rupees for 10 grams.
Indian households and temples collectively hold about 25,000 tons of the precious metal. The country imported 220 tons of gold in the July-September quarter, 19% more than a year earlier.
And now our energy segment in collaboration with IndiaEnergyWeek.
Oil prices jumped by nearly 1% on Tuesday, lifted by uncertainty over voluntary output cuts by the OPEC+ group of producers, tensions in the Middle East and some encouraging economic signals in Europe, Reuters reported.
Brent crude was still below $79 while West Texas Intermediate crude futures were up 66 cents at $73.19.
Saudi Arabia's energy minister said that OPEC production cuts could continue past the first quarter of 2024 causing the prices to hold somewhat, analysts said.
In general, crude at present seems to be driven more by demand or the lack of it rather than supply of which the OPEC countries are continually threatening to cut more supply.
The Energy Segment was brought to you by India Energy Week to be held on February 6 next year. Details at www.indiaenergyweek.com
Moody’s Downgrades China
Ratings agency Moody's has cut its outlook on China's government credit ratings to negative from stable on Tuesday.
The move reflects the concern over the impact of rising local government debt and a deepening property crisis in the country, Reuters reported.
The downgrade reflects growing evidence that authorities will have to provide more financial support for debt-laden local governments and state firms, posing broad risks to China's fiscal, economic and institutional strength, Moody's said in a statement.
China’s usage of fiscal stimulus to support local governments and its spiralling property downturn is posing risks to the nation’s economy, Moody’s said.
The government pushed back soon after the outlook change was announced, saying it was “disappointed” with Moody’s decision and the nation’s economy “will be highly resilient and has large potential.” The impact of the property downturn is well under control, the finance ministry said in a statement, Bloomberg reported.
Action At COP28
Global carbon dioxide emissions from burning fossil fuels are set to hit a record high this year, worsening climate change and fuelling more destructive extreme weather, scientists have said.
The Global Carbon Budget report, published on Tuesday during the COP28 climate summit underway in Dubai, said that overall CO2 emissions, which reached a record high last year, will plateau in 2023 due to a slight drop from uses of land like deforestation, Reuters reported.
Countries are expected to emit a total 36.8 billion metric tons of CO2 from fossil fuels in 2023, a 1.1% increase from last year, the report by scientists from more than 90 institutions including the University of Exeter concluded.
When land use emissions are included, global CO2 emissions are set to total 40.9 billion tons this year.
Emissions from coal, oil and gas all rose, driven by India and China. The Chinese rise was caused by its economy reopening after COVID-19 lockdowns, while India's was a result of power demand growing faster than the country's renewable energy capacity, leaving fossil fuels to make up the shortfall.
The year's emissions trajectory pulls the world further away from preventing global warming exceeding 1.5 degrees Celsius above pre-industrial times.
Drug Exports Rise On Shortages
Pharmaceutical exports in the months of October and November have hit record highs, officials at India’s Pharmaceutical Export Promotion Council told The Core.
Moreover, a focus on areas like child immunisation, somewhat neglected during Covid, have led to a near 2,000% increase in vaccine exports from India.
Drug shortages in the US and Europe and revival in demand in Africa could take pharmaceutical exports from India to $28 billion in 2023-24, a 10.2% growth.
Drug shortages include those used for cancer, a key one and then for managing body weight, drugs that treat attention deficit/hyperactivity disorder (ADHD), antibiotics and cardiac medications.
I reached out to Uday Bhaskar, Director General of the Hyderabad-based Pharmaceutical Exports Council of India or Pharmexcil and began by asking him why growth was picking up presently and his outlook for the rest of the year.
Music Makes The World Go Round
Each year, some 20,000 original songs are generated in India by over 40,000 creators, generating over INR12,000 crore in revenues annually, a new and insightful report from consulting firm Ernst & Young titled The music creator economy, The rise of music publishing in India 2023.
Of the Rs 12,000 crore, digital revenues represent a significant 47% followed by broadcast at 35%.
Music publishing has grown in India to INR884 crore (approx. US$100 million) in 2022-23.
There is a distinction between publishing rights and recording rights which we will come to.
The report also surveys some 500 music creators to understand what they are looking for when it comes to creating music.
I reached out to Ashish Pherwani, Partner and Media and Entertainment Lead at EY and began by asking him about the industry’s growth and the increasing role of digital in its future, for creators and the industry.