Industry Update

Indian billionaire Gautam Adani is raising $2.5bn from a deal that includes the sale of a minority stake in his renewables business to french energy giant Total, a transaction that may help the tycoon cut group debt. Paris-based Total will acquire 20 per cent of Adani Green Energy and a board seat as well as a 50 per cent stake in a portfolio of operating solar assets with 2.35 gigawatts capacity, the company said. Shares of Adani Green have more than quadrupled in value in the past year in Mumbai, giving the company a market value of about $20bn. “Primarily, this fund infusion will help Adani lower its leverage,” said Chakri Lokapriya, chief executive at TCG Asset Management in Mumbai. “Thanks to a series of deals, Adani is highly leveraged at this point of time.”

Source: https://www.thenationalnews.com/business/money/billionaires-gautam-adani-will-raise-2-5bn-from-a-renewables-deal-with-total-1.1151951

The race to deliver the jab to the world’s populations has so far been led by a handful of smaller nations, and now they’re outpacing some of the wealthiest countries in the eyes of traders too. The fastest Covid-19 vaccination rollouts globally, in Israel and the United Arab Emirates, are propelling their equities to the top of the world in 2021. Israel’s benchmark TA-35 stock index has gained 7.6% this year, outperforming both the S&P 500 and the Euro Stoxx Index. And the Dubai Financial Market General Index has climbed about 9.8%, all but reversing its 10% slump in 2020. Traders are rushing to price the global vaccine rollout and betting nations at the forefront will be the fastest to recover from the crisis, lifting their stocks, currencies and bond yields. The share of a country’s population that has been inoculated might be “the most important statistic to track over the next year,” according to strategists at JPMorgan Chase & Co.

Source: https://www.bloomberg.com/news/articles/2021-01-24/leaders-of-vaccine-rollout-deliver-world-beating-market-gains?srnd=economics-vp

The Reserve Bank of India (RBI) proposed a four-layered structure for non-banking finance companies (NBFCs) and new norms to strengthen their governance and operations. The RBI, in a discussion paper, proposed to differentiate between NBFCs depending upon the layer they belong to, such as base and middle. “To sum up, regulatory and supervisory framework of NBFCs shall be based on a four-layered structure - ‘Base Layer, Middle Layer, Upper Layer and a possible Top Layer’,” it read. As per the discussion paper, NBFCs in the lower layer will be known as ‘NBFC-Base Layer’ (NBFC-BL), and for the middle layer as ‘NBFC-Middle Layer’ (NBFC-ML).

Source: https://www.gulftoday.ae/business/2021/01/23/rbi-proposes-multilayer-system-and-stricter-norms-for-nbfcs

Tesla Inc. delivered a record number of cars worldwide in the fourth quarter of 2020, but fell just shy of a goal for 500,000 units for the full year. The electric-car maker delivered 180,570 vehicles in the last three months of the year, eclipsing its prior all-time high of 139,300 in the third quarter of 2020 while increasing 36% from 367,500 deliveries in 2019. The company has been ramping up output of its mass market models to meet rising global demand for battery-powered cars. The Palo Alto, California-based company said in a statement on Saturday its delivery count should be viewed as slightly conservative and final numbers could vary by up to 0.5% or more.

Source: Tesla Delivers 499,550 Vehicles in 2020, Just Shy of Target - Bloomberg

Tata Group has increased its stake in AirAsia India as it looks to increase its share of India's airline industry. On Tuesday  the company announced it would increase its holdings in the Indian-based joint venture with AirAsia from 51% to 84%. AirAsia, owned by Malaysian tycoon Tony Fernandes, has been scaling back its operations during the Covid pandemic. Last week Tata also put in a bid for the country's struggling national carrier Air India. Tata Group is paying AirAsia around $38m (£28m) for the increased stake in the AirAsia India joint venture which began in 2014. The deal puts the Indian conglomerate firmly in command of the budget carrier. AirAsia has been looking to reduce its cash-burn and its Japan unit filed for bankruptcy last month.

Source: Tata grabs bigger slice of AirAsia and India's airline industry - BBC News

Bitcoin has been flirting with the $30,000 mark for weeks, and finally passed that record-setting level Saturday. The virtual currency is now valued at above $33,000, an all-time high. Bitcoin (XBT) has tripled in value during 2020, growing steadily even as the stock market plunged in the early days of the pandemic. Investors have been drawn to it, as well as other cryptocurrencies, as the US dollar has weakened. With the Federal Reserve expected to leave interest rates near zero for several more years, bitcoin may continue to win new fans. Well-known names are adding to bitcoin's mainstream appeal. Rick Rieder, the chief investment officer of fixed income BlackRock (BLK), has said the digital currency could replace gold. Payment giant PayPal (PYPL) has embraced bitcoin, after showing reluctance to do so.

Source: Bitcoin price soars past $33,000, its highest ever - CNN

Billionaires have always traveled in a different orbit than the rest of us. Nicer things, more power, rocket-launching stations. But 2020 threw that gulf into stark relief. While much of the world grappled with soaring unemployment and plunging growth, the 0.001% benefited from unprecedented wealth creation. The world’s 500 richest people added $1.8 trillion to their combined net worth this year and are now worth $7.6 trillion, according to the Bloomberg Billionaires Index. Equivalent to a 31% increase, it’s the biggest annual gain in the eight-year history of the index and a $3 trillion jump from the market’s nadir in March. The gains were disproportionately at the top, where five individuals now hold fortunes in excess of $100 billion and another 20 are worth at least $50 billion.

Source: Elon Musk, Jeff Bezos Smash Records as World’s Richest People Add $1.8 Trillion - Bloomberg

Abu Dhabi’s ADNOC Distribution announced on Thursday that it plans to acquire 15 service stations in the eastern region of Saudi Arabia. The deal is valued at 36.7 million dirhams ($10 million) and is subject to regulatory approval, WAM, the UAE state news agency, said. “Expanding our presence in Saudi Arabia is an important milestone for our company and part of our profitable growth strategy. We see this expansion as a natural progression and look forward to significantly increasing our presence in the coming years. This is the first announcement of many we intend to make, with Saudi being a key strategic market for us,” Ahmed Al-Shamsi, acting CEO of ADNOC Distribution, was quoted as saying.

Source: UAE’s ADNOC Distribution plans $10m deal for 15 Saudi service stations (arabnews.com)

Fiat Chrysler Automobiles NV and PSA Group are poised to get shareholders' sign-off on a combination that's endured two years of extraordinary drama, marked by on-again off-again talks, the transformation of their industry and a global pandemic. At two separate meetings Monday, investors will be asked to approve a merger that will form Stellantis, the world's fourth-largest automaker. The hurdles the two overcame to get to this point were plentiful and prodigious, with Fiat even managing to patch things up after a short-lived attempt to join forces with PSA's archrival Renault SA. Fiat Chrysler and PSA executives reckon they'll boost returns with scale more closely resembling Volkswagen AG and Toyota Motor Corp., and have greater resources to compete with electric-car upstarts and tech-industry interlopers. But plenty of challenges await once the deal is done. Stellantis will be an amalgam of model lines with enviable positions in certain segments and areas of the world, but neither company has much of a foothold in the luxury-car business or China's vast auto market.

Source: Fiat and PSA's against-all-odds merger nears the finish line | Business – Gulf News

Warner Bros. has come up with a new plan to compensate filmmakers during the pandemic: treat every movie like a box-office smash. After shocking Hollywood with its decision to release all its new movies this year on HBO Max, the studio has adjusted terms of its deals with partners to guarantee payment regardless of box-office sales and to increase the odds of performance-based bonuses. Warner Bros will also pay a larger group of cast and crew money based on fees it collects from HBO Max, according to people with knowledge of the studio’s plans. The company is close to resolving disputes with many parties, said the people, who asked not to be identified because the discussions are private. Details of some accords have already begun to surface, with the Hollywood Reporter saying this week that Warner Bros. is close to a deal with Legendary Entertainment over the movie “Godzilla vs. Kong.”

Source: Warner Bros. Guarantees Filmmakers a Payday for HBO Max Movies - Bloomberg