Expert Analysis of the Global Macro Events & News affecting the Indian Markets
WEEKLY SYNOPSIS
| Index | 1 Week | 1 Month | 1 Year | 5 Years |
| Nifty 50 | 1.50% | 2.87% | 10.64% | 73.62% |
| BSE Midcap | 2.94% | 5.90% | 22.22% | 96.24% |
| S&P 500 | -1.16% | -0.05% | 9.71% | 54.47% |
| Nasdaq | -1.49% | 1.69% | 21.37% | 104.92% |
This was not a competition, but India still won.
Delhi being closed over the weekend was a bit of a bummer for me because it meant I had to cancel my plans and stay home, but since I was home because of the summit, I glued myself to Twitter tracking all updates of G20. When Prime Minister Modi handed over the gavel to the Brazilian PM, everyone brimming with pride applauding a job well done. So, as you might have guessed by now, this week I am talking about the Group of 20 Summit, 2023.
The G20 Summit held last weekend in New Delhi was a huge diplomatic success for India. While offices and institutions were shut last week in Delhi, diplomats from across the world were negotiating with all the arguments they had at the summit. While leftists are always opposing the ruling party and rightists defending all quirks of the government, everyone is equally lauding the government’s efforts that brought the G20 summit to India. For the first time, leaders from the world’s largest nations were gathered in our country, in our beloved capital – Dilli.
New Delhi Declaration – The Biggest Win
Every year, the nation hosting the summit is required to draw a declaration which is discussed and then, depending on the participant nations, fully or partially adopted. India, being ambitious as it always is, drafted a lengthy 83-paragraph long declaration which most of us didn’t think would be fully accepted. But, contrary to our assumption, the declaration was adopted fully and unanimously by global leaders. This is a landmark achievement as a developing country hosting the summit.
New Delhi brought up some crucial areas of discussion for global development. These included:
- Climate change and a greener future
- SDG focussed development
- Equitable growth and fair trade
- Multilateralism
These just feel like heavy and seemingly boring words used in international political conferences but stay with me as I break these down to discuss some of the most significant and interesting updates from the summit.
Our Steaming Planet – The Hot Topic
Well, that’s a pun here but climate change has been a hot topic and a global issue of concern for quite a long time. And now, the world is finally making tangible efforts to tame it. A global conference of course had to talk about it and at the G20, climate change was the topic of utmost importance.
Global leaders successfully adopted the Global Biofuel Alliance led by India which aims at mixing at least 20% ethanol with petrol. This is a big effort towards clean energy to achieve low and net zero emissions. Our country plans on achieving this by 2026 itself!
Another major step towards combating climate change is the Green Development Pact adopted by G20 leaders. The pact lays down the agreement towards reducing greenhouse gases by 2030 and more use of renewable energy. Urged by the G20, the UK added 2 billion dollars to the Global Climate Fund.
India – The Voice of Developing Nations
Developing nations always struggle to be at par with developed countries when it comes to having the right to voice their opinions on international platforms. India, this year became the voice that not only brought the concerns of developing countries into the conversation but also welcomed them to sit at the high table. This year, G20 welcomed another member – the African Union. This has been in discussion by PM Modi since June and on Saturday, it came into place without debates. Bringing the 55-nation union to G20, India is trying to be an ambassador of the Global South.
Having heaps of debt, third-world countries like Ghana, Ethiopia, and Zambia have been struggling to get on their feet since COVID-19. India called upon world institutions like the World Bank and IMF, and other nations to lend a helping hand to these nations. We are not growing alone, we are pulling others up too.
What’s in it for us investors?
This summit, with India having the presidency will have a great impact on the country’s economy, but in the long run. G20 is not significant just geopolitically but also economically. Here are the things we are expecting from it:
- Boost in FDI as India becomes a lucrative country for investments, with additional benefits coming from China’s current economic position.
- Green energy, as I earlier mentioned is a sector where we are expecting immense growth. There’s a lot of scope for development in the market and India is trying to get the first-mover advantage on this.
- Another sector that has moved after the summit is infrastructure. With the agreement to build a new trade corridor across India, the Middle East, and Europe, we saw infrastructure stocks go up when markets opened this week.
All these achievements came at a huge cost of 4100 crore rupees, the expenditure that the centre incurred for organising the summit but all the efforts and resources turned out to have been well allocated as the summit came to a successful completion. Onto the November follow-up now!
Equal Pay Breaking the Banks, Not Barriers.
We often talk about the power women hold. The roots of feminism can be found in the Gender Pay Gap. Equality and gender inclusivity in the workplace have been one of the top agendas for feminists around the world. Being a woman myself, I’ve often heard my co-female friends telling me to voice my opinions.
But can you imagine that asking for equality can make a city bankrupt? Surprisingly weird right? Something similar has happened in the UK’s second-largest city Birmingham. “Naari Shakti” has taken an altogether new turn in the city.
Birmingham City Council last week declared itself bankrupt. It has also put a halt on all government spending except the essential ones. It has issued the “Notice 114”. In recent years provinces like Woking, Thurrock, and Northamptonshire have all issued this notice.
What is Notice 114?
In legal jargon, it is an acknowledgment that a body’s expenses will exceed the resources available to pay them. In simple language, it means that the body will face a deficit in the upcoming/current fiscal year. It does not mean that the government is insolvent; rather it is a message for the relevant authority to take the necessary course of action.
The reasons are not very surprising. Let’s have a look at them.
- Equal Pay Claim- People, like they always do, are blaming the problem rather than looking out for solutions. Most reporters are blaming the female residents for asking for “equal” pay. The Labour-led council in Birmingham had estimated in July that equal pay claims brought by its female staff could cost it up to £760m (over ₹78 Billion). In June, the council revealed it had paid out 1.1 billion pounds to female workers but still had a current liability of 650-750 million pounds.
The problem runs back to the 2000s when more than 4,000 women said that they had been excluded from bonuses. This again happened in 2012 with 174 former female employees. This indicates nothing but the failure of the government to employ gender-equal rights at work for the last 25 years. Sounds like a Government Problem to me, doesn’t it?
- Commonwealth Games: It is a famous saying that Cut your Coat according to Cloth i.e., Live within your means and place. Another reason for the catastrophe can be attributed to the Commonwealth Games that Birmingham organized last year and spent 184 million pounds.
- Every Drop Counts- High inflation, COVID-19, and economic downturn added fuel to the fire. Another reason sighted by the experts was the “botched IT system” by Oracle that cost it 100 million pounds.
Government to the rescue?
The Rishi Sunak-led government has refused to help out the Birmingham City Council. The spokesperson said and I quote “The government had already provided extra funding for the council, at around 10 percent of its budget, but ”it’s for locally elected councils to manage their own budgets.”
For decades, the gender pay gap has been a stark reminder of the systemic inequalities faced by women in the workforce. It is just one city today, what if women around the world start asking for what they deserve? The disparity not only reflects the deep-rooted gender biases prevalent in societies but also impedes the economic growth and progress of nations, as visible in this case. As societies strive for progress and prosperity, bridging the gender pay gap becomes paramount, reinforcing the belief that everyone deserves equal pay for equal work, regardless of gender.
Exclusive Saturday Special – A Suprise
We couldn’t do the live last week and since it was missed by our investors, we are compensating this week by bringing you a special announcement. Something new has been brewing here at Green Portfolio.
Is it a Smallcase? A PMS Fund? Perhaps a different service altogether? The suspense will only lift when your fund manager, Divam Sharma, pulls back the curtain on our brand-new product during our special Saturday live session.
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Green Portfolio is a SEBI Registered (SEBI Registration No. INH100008513) Research Analyst Firm. The research and reports express our opinions which we have based upon generally available public information, field research, inferences and deductions through are due diligence and analytical process. To the best our ability and belief, all information contained here is accurate and reliable, and has been obtained from public sources we believe to be accurate and reliable. We make no representation, express or implied, as to the accuracy, timeliness, or completeness of any such information or with regard to the results obtained from its use.
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