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17-year-old international rivalry ended to oppose China, Adani Group suffers MASSIVE losses

International Story Of The Week – Boeing and Airbus ends 17-year long tariff rivalry to counter China

This week, Boeing and Airbus ended their long rivalry and entered a truce to counter growing commercial civil aviation development from China. China is expected to become the largest aviation market by 2025 and this move by the duopoly builds on Biden’s vision to counter China’s growing global economic influence through unfair policies.

The agreement signed this week would end the long-standing subsidies dispute. Started in 2004, both sides have alleged each other of subsidizing their respective aviation and disrupt the global level playing field. Mediated by the WTO, the recent consensus between the parties would open a new era for the hard-hit commercial aviation market.

The EU trade commissioner said he was “confident that at the end of the day we will be able to put this dispute to rest completely”. He added: “It is already a very big step in that direction.”

What’s in it for India? 

This move poses a strong global narrative in line with India’s long stand against China’s unfair policies and opens doors for a shift of attractiveness towards the Indian market.

Boeing-Airbus

Indian Story Of The Week – Adani loses nearly INR 2 trillion in four days

Owing to news from Economic times, Asia’s second-richest man lost around $27 Billion in four days – the highest loss this week by anyone on the globe. On Monday, Economic Times published that NSDL has frozen three of their Mauritius foreign investment accounts Albula Investment Fund, Cresta Fund, and APMS Investment Fund. These funds combined control around 3 percent of the group. Though Adani Group rejects all these claims by stating them as – “blatantly erroneous”.

The three funds, whose accounts were listed as frozen on NSDL’s website as of May 31, could not immediately be reached for comment. However, CNBC TV18 reported Albula as saying on Monday it was “not blocked by any means” and was “fully operational”. On the interesting side, all these funds (and additional two funds) are listed on the same address without a website and functional contact number.

Based on data by Indian stocks analysis firm Trendlyne ~95% of the fund’s capital is invested in Adani Group. Though Adani rejected these allegations, the explanation isn’t satisfactory to provide a floor for plunging share prices.

Article from Financial TImes Note – 

Analysts at Citigroup reiterated their “buy” call on Monday for Adani Ports, saying developments related to insufficient disclosure were unlikely to have an impact on the company’s prospects.

The company “remains well-positioned to grow its already high market share in [the] port industry in India and [its] valuation . . . is attractive”, the analysts wrote.

Adani group stock

Global Equity Market Update

Owing to the Federal inflation response, stocks on wall street experienced the worst fall in months. On Wednesday, the Fed made the statement that reverse in interest is not close until 2023(earlier projected 2024). This comes as a shock to investor’s belief that the Fed would think beyond fueling the labor market and act to taper the rising inflation..

Companies in Focus

  1. AstraZeneca wins legal battle against EU to increase their vaccine supply through UK facility
  2. In a move to address shareholders on immersing tensions between investors and Thoshiba’s management, the firm’s chair pledged fair enquiry to the recent “Unacceptable Events”
  3. eBay to sell its South Korea unit to local rival Coupang for $3.1bn
  4. To stand by its commitment to reduce risk, Credit Suisse parts away with its long partner Softbank. Softbank has relied on Credit Suisse as one of the prominent private lenders.

Happy Reading!

Shubham Agarwal (CFA L2 Candidate | Incoming MBA candidate at University of Cambridge, UK)

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