BackiPhone 7 launch, dynamic pricing for trains and Trump’s gain
Apple releases the latest version of the iPhone; Rajdhani, Shatabdi prices to rise with demand; Trump overtakes Clinton in latest poll
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1. Apple won’t reveal first-weekend sales for iPhone 7
Apple Inc. last week announced the launch of the iPhone 7, the latest instalment in its hugely popular series of smartphones. The iPhone 7 and 7 Plus will hit the stores on 16 September in the first wave of countries. However, Apple is grappling with falling phone sales, which clocked negative growth in the past two quarters. With markets wary of the ability of the iPhone 7 to turn around the sales numbers for Apple, the company has decided against releasing first-weekend sales figures, reasoning that the numbers could be distorted due to logistical issues.
2. Trump ahead of Clinton in a new CNN/ORC poll
A latest opinion poll ahead of the US presidential election gave Republican nominee Donald Trump a 2 percentage point lead over the Democratic nominee Hillary Clinton. However, at 45% to 43%, the difference between the two candidates is not much. But what is interesting is the stark divisions in the way different demographics plan to cast their ballots. Trump is more popular among men, while Clinton among women. However, most married women said they were likely to vote for Trump instead of Clinton. Meanwhile, younger respondents tended to favour Clinton while older ones generally favoured Trump.
3. G-20 calls for cooperation to tackle steel glut
World leaders, in a communique at the G-20 summit in Hangzhou, China, recognized excess capacity in steel as a global issue requiring joint action. The Group of 20 nations further blamed government subsidies as often being market distorting. In the past, China has often been singled out for allegedly flooding the globe with cheap steel exports. According to the OECD (Organisation for Economic Co-operation and Development), the global crude steel industry is laden with around 600 million tonnes of excess capacity, half of which might be in China alone.
4. Horticulture production to outstrip foodgrain output
India’s horticulture production most likely exceeded foodgrain production for the fourth year in a row in 2015-16, according to the third advance estimates released by the agriculture ministry last week. A recent piece in Mint had noted that horticulture crops are grown in about 10% of India’s gross cropped area, compared to over 50% of the area used to grow foodgrain, which signals the success of small and marginal farmers in growing more fruits and vegetables, driven by higher demand. Uttar Pradesh, Andhra Pradesh and Maharashtra are the top three fruit-producing states, accounting for nearly a third of India’s fruit production.
5. SpiceJet June-quarter net profit rises
Low-cost carrier SpiceJet’s net profit for the June quarter rose 104% year-on-year to Rs149 crore, marking the sixth consecutive profitable quarter for the company. SpiceJet outshined some of its main rivals in the June quarter, with IndiGo and Jet Airways (India) Ltd both reporting a decline in profit. Meanwhile, latest data from the Directorate General of Civil Aviation show that SpiceJet’s passenger load factor of 92% in July remains the highest in the industry, surpassing Go Air (90.3%), IndiGo (83.6%) and Jet Airways (83.8%). Also, SpiceJet’s domestic market share has increased from 9.4% in the March 2015 quarter to 12.7 in the June 2016 quarter.
6. ICICI Prudential Life gets Sebi nod for IPO
ICICI Prudential Life Insurance Co. received capital markets regulator Securities and Exchange Board of India’s approval to raise an estimated Rs5,000 crore through an initial public offering, the first by an insurer in India and the biggest in nearly six years. Prudential will not dilute its stake in the IPO of ICICI Prudential Life, while ICICI Bank will be selling its 12.65% stake. As of 31 March, ICICI Bank held a 67.6% stake in the life insurance firm and Prudential Corp. Holdings 25.9%. As Mint reported, the IPO is likely to be launched in the week beginning 19 September.
7. SBI to raise $1 billion through AT1 bonds
State Bank of India (SBI) reportedly plans to raise $1 billion through dollar-denominated perpetual bonds for foreign investors. As Mint reported, these bonds are likely to be issued with a five-year call option, i.e., SBI can buy back the bonds after a lock-in period. The so-called AT1, or additional tier-I, bonds carry no maturity date and will help bolster SBI’s capital adequacy at a time when it is preparing for a merger with its associate banks. SBI’s total capital adequacy ratio, now at 14.01% of risk-weighted assets, has improved in the past few quarters. AT1 as yet contributes only 0.11% to the 14.01% total capital adequacy.
8. Rajdhani, Shatabdi, Duronto prices on dynamic fare system
The Indian Railways introduced a dynamic fare system in its Rajdhani, Duronto and Shatabdi trains from Friday on an experimental basis. Tickets for the aforementioned trains are likely become more expensive on average as the base fare will rise by 10% with every 10% of berths sold, subject to a ceiling of 1.4-1.5 times. To illustrate, a Mumbai-Delhi journey by Rajdhani three-tier AC could cost Rs2,736, a 31% increase over the current fare of Rs2,085. Meanwhile, there is no increase in the base fare for Executive Class and 1AC.
9. Electricity generation records slowest growth in 16 months
Electricity generation growth slowed to 0.15% year-on-year in August after decelerating from 9% year-on-year in the first half of 2016. This was indeed the slowest growth in more than a year. Also, it’s the slowest August growth in at least seven years. Downbeat electricity generation raises concerns over the demand environment and perhaps implies that the industrial segment is yet to see a meaningful recovery, as noted by Mint in a recent piece. Of course, part of the apparent decline in electricity demand might be on account of a fall in temperatures and monsoon rains.
10. Air pollution cost India 8.5% of its GDP in 2013
A joint study by the World Bank and the Institute for Health Metrics and Evaluation, released last week, said that air pollution deaths cost the global economy $225 billion in lost labour income in 2013. A recent piece in Mint noted that these findings question the conventional wisdom that caring for the environment necessarily entails sacrificing economic growth. Adding welfare costs and costs of lost labour due to air pollution puts India’s GDP loss at more than 8.5% in 2013. India’s GDP growth at constant prices was less than 7% in 2013-14. So air pollution alone might be offsetting the Indian economy’s growth efforts.
Graphics by Ajay Negi.
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