Namaste! Aaj ka news roundup, Newswala style!

MARKETS

Markets: Indian markets saw considerable ups and downs in the last week, with Sensex hitting new heights. This week, Dalal Street is set to experience a flood of initial public offerings (IPOs) with seven public issues opening for subscription.

BUSINESS

India Strikes $100 Billion Trade and Investment Deal with EFTA

What happened

India and the European Free Trade Association (EFTA) – encompassing Iceland, Liechtenstein, Norway, and Switzerland – shook hands on a robust Trade and Economic Partnership Agreement (TEPA) on March 10. The deal, not just about trade but also marking a significant investment commitment, sees the EFTA nations pledging a colossal $100 billion into India over the next 15 years.

Commerce Minister Piyush Goyal, elated at the prospect, highlighted the immense potential for growth in sectors such as pharma, medical devices, and food industries. Goyal emphasized the agreement as a "modern trade agreement," emphasizing its fairness and benefit to all parties involved.

Why it matters

This deal isn't just a diplomatic feather in India's cap; it's a strategic move with broader implications. The $100 billion investment commitment is a major boost for key sectors like pharma, medical devices, and food, signalling significant economic growth potential. What adds spice to the story is the timing – coming just ahead of India's general elections in April and May 2024, it's a political win for the government.

As negotiations with the UK, the EU, and Oman continue, India is strategically diversifying its trade partnerships. Prime Minister Narendra Modi emphasised the collaborative opportunities across various sectors, recognizing the EFTA nations' global leadership in innovation, R&D, and diverse industries.

The agreement, born after a pause in negotiations since 2013 and 21 rounds of talks, covers crucial aspects like goods, services, rules of origin, intellectual property rights (IPRs), and investment promotion.

Zoom out

India's foray into this comprehensive agreement with the EFTA nations paints a picture of confidence and commitment to open trade, even in a world leaning towards protectionism. The $100 billion investment pledge is not just a number; it's a marker of trust in India's growth trajectory.

BIG MONEY MOVES

Spotify tunes into India's independent music scene

Spotify is placing its bets on independent music to amplify its presence in India. While film music commands 70-90% of Spotify's consumption, independent tracks created by singers in collaboration with labels are on a faster rise. Amarjit Singh Batra, Spotify India's MD, envisions a gradual shift towards a 50:50 balance between film and independent music.

Despite film music's dominance, the most-streamed song on Spotify in India in 2023, "Maan Meri Jaan" by King and Saurabh Lokahnde, with over 275 million streams, defied the movie association trend.

HCLTech and ServiceNow forge alliance for Gen-AI solutions

HCLTech has teamed up with American software company ServiceNow to deliver cutting-edge Gen-AI solutions aimed at boosting efficiency and cost-effectiveness for businesses. HCLTech's comprehensive services, covering consulting, design, implementation, and managed services, will leverage ServiceNow's entire suite of products.

The collaboration targets substantial cost-savings and increased productivity across various business departments. Bill McDermott, CEO of ServiceNow, commended HCLTech's expertise and envisioned the co-creation of industry-specific GenAI solutions.

BUSINESS

Siemens Rides High on India's Growth and Sustainability Wave

What happened

Siemens, the German engineering giant, is placing a bold bet on India's economic expansion and its rapid shift towards digitalization and sustainability. 

Sunil Mathur, Managing Director of Siemens Ltd, revealed the company's keen focus on venturing into new sectors, either through organic growth or strategic acquisitions. The recent acquisition of C&S Electric and Mass-Tech's electric vehicle (EV) division, coupled with a substantial investment in rolling stock for Indian Railways, showcases Siemens' commitment to diversifying its portfolio.

Why it matters

Siemens is aligning its strategy with India's increasing emphasis on sustainability, driven by factors like energy efficiency, global export requirements, consumer demand for greener products, and regulatory pressures.

Judith Wiese, Chief People & Sustainability Officer at Siemens AG, also highlighted the company's $1 billion investment in India over the past 6-7 years, aiming to acquire businesses, establish new units, and upgrade existing facilities.

Siemens' global restructuring, marked by exiting non-core businesses and transforming into a focused technology company, underscores its commitment to staying ahead of market trends. Sunil Mathur emphasized the importance of continuous reinvention, highlighting Siemens' successful transition from a mechanical to an electrical and automation company, and now, a technology powerhouse.

Zoom out

Siemens' restructuring efforts have not gone unnoticed, with Siemens Ltd's stock gaining an impressive 350% in the last five years, outperforming the benchmark Sensex by a substantial margin. The global stock of Siemens has nearly doubled on the Frankfurt Stock Exchange, reflecting the company's ability to adapt and thrive in dynamic market conditions.

As Siemens continues to ride high on India's growth trajectory and sustainability wave, the company's strategic investments and portfolio reshuffling position it as a key player in India's evolving economy.

BIG PICTURE

Intel secures $3.5 billion boost to forge defense-chip dominance in US

The US government is set to invest $3.5 billion in Intel Corp., solidifying its role in producing advanced semiconductors for military and intelligence programs. Tucked into a recent spending bill, this funding, part of the $39 billion Chips and Science Act grant pool, aims to boost domestic chip production.

Intel, eying a total incentive package exceeding $10 billion, is positioned as a key player in the defence market. The Senate is expected to pass the legislation, aligning with broader efforts to enhance domestic chip manufacturing capabilities.

Indians in for price drop on Swiss watches and chocolates 

Swiss watches and chocolates are set to become more affordable as part of the Trade and Economic Partnership Agreement (TEPA) inked with the European Free Trade Association (EFTA) on March 10. New Delhi plans to slash the current 30% import duty on chocolates and 20% on Swiss watches to zero over a seven-year period.

With total trade at $18.66 billion between India and EFTA nations, this deal promises a sweet and timely reduction for Indian consumers. The agreement will also eliminate duties on machinery items and medical devices from Switzerland. 

BUSINESS

Saudi Aramco Faces Profit Dip of 24.7% in 2023

What happened

Saudi Aramco, the world's largest oil company, reported a substantial 24.7% drop in profits for the year 2023 compared to the preceding year. The financial setback, outlined in a filing with the Saudi stock market, attributes this decline to a combination of lower oil prices and strategic production cuts.

Aramco's net income for 2023 landed at 454.7 billion Saudi riyals ($121.25 billion), a significant decrease from the 604.01 billion Saudi riyals ($161.07 billion) recorded in 2022. The impact is notably attributed to weakened refining and chemicals margins, coupled with reduced sales volumes in the face of global economic uncertainties.

Another major cause as highlighted by the company's CEO, Amin Nasser, was the challenges posed by the Red Sea crisis.

Why it matters

The profit setback stems from lower crude oil prices, decreased sales volumes, and weakening refining and chemical margins. 

• However, the oil giant has elevated its dividend to both investors and the Saudi Arabian government, despite facing lower energy prices and a decrease in production.
  
  

• The total payout for the fourth quarter, amounting to $31.07 billion, including a special component, demonstrated an uptick from the previous quarter's levels.

As oil prices fluctuate amid global uncertainties, including the Israel-Hamas conflict, Aramco extended its oil supply cuts through June. Analysts predict prices could rise to $90 per barrel by the end of 2024. 

Zoom out

Saudi Aramco's financial performance reflects the volatile nature of the oil market, with external factors like geopolitical events influencing prices. Despite a dip in profits, the company's strategic decisions, including extending supply cuts and diversifying the economy, demonstrate adaptability.

As the energy giant navigates economic challenges, its role in funding Vision 2030 and the transfer of Aramco stakes to the Public Investment Fund underscore its significance in shaping Saudi Arabia's economic future. 

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