Una Galani

Breakingviews - Lebanon blast lays bare cost of a weak state

05 Aug 2020

MUMBAI/LONDON (Reuters Breakingviews) - Lebanon has added tragedy to crisis. A powerful blast in the Beirut port on Tuesday devastated the area and sent seismic shockwaves across the capital, killing at least 100 people and injuring 4,000. A health emergency created by the pandemic may now be followed by a wider humanitarian crisis. Chronic political weakness makes everything worse.

Breakingviews - Mukesh Ambani’s retail M&A would wipe competition

04 Aug 2020

MUMBAI (Reuters Breakingviews) - Mukesh Ambani, India’s richest man, is keen to meet all the shopping needs of domestic consumers. A flurry of dealmaking involving his $176 billion oil-to-telecom giant Reliance Industries could make that a sharper reality by seriously blunting the competition. Ambani’s Reliance Retail is a conglomerate within a conglomerate, accounting for one quarter of group revenue last year. It has joint ventures with luxury labels from Tiffany & Co to Jimmy Choo, and owns Trends, a mass-market chain. In groceries, it operates supermarkets plus a cash-and-carry business catering to tiny shops. The unit is also a big owner of electronics stores, petrol pump retail outlets, and so-called Jio Points which function as sales counters for Ambani’s mobile operator. Overall, it’s the country’s largest retailer by reach, scale, revenue and profitability with almost 12,000 stores covering 28.7 million square feet. Ambani reminded shareholders last year that the business is “four times larger than the second largest retail player” and “larger than all the other major retailers put together”. Now consolidation is coming down the aisle. Reliance Industries might buy its closest brick-and-mortar rival, Kishore Biyani’s Future Group for up to $3.6 billion, according to Mint newspaper. The potential target owns supermarket chain Big Bazaar and the upmarket Foodhall. Meanwhile, Ambani is sizing up investors for his retail arm after Reliance’s digital business raised $20 billion from Facebook, Alphabet’s Google, KKR and others. Jeff Bezos’ Amazon was expected to provide top competition for Reliance’s emerging online business but ET Now says it might inject funds into its rival. Hazy definitions of market share might help smooth the way fwith competition watchdogs. Figures in the company’s annual report emphasise two perspectives. Pre-pandemic, Reliance Retail’s full year revenue was equal to just 2.6% of the $822 billion retail market, where tiny mom and pop stores dominate. In contrast, just 11% of the overall market is “organised”, referring to corporate-backed chains and shops run by licenced traders. Here, Reliance Retail already pockets nearly $1 out of every $4 spent, and only slightly less in groceries. Biyani’s Future Group has financial troubles, so a tie-up could benefit its stores and customers. Over the longer term, though, Ambani’s outsized dominance will translate into unbeatable pricing power. Ultimately, India’s shoppers will pay for that.

Breakingviews - Mumbai’s slums test lockdown logic

30 Jul 2020

MUMBAI (Reuters Breakingviews) - Just maybe, India’s financial capital can start to look beyond its Covid-19 lockdown. An antibody testing study has found that a whopping 57% of people sampled in densely populated slum areas of Mumbai had coronavirus antibodies. Some 40% of the city’s 20 million or so residents live in similar settings, where toilets and water supply are often shared and social distancing is impossible. The result tests the logic of the city's strict lockdown.

Breakingviews - TikTok deal depends on how, not how much

29 Jul 2020

DALLAS/MUMBAI (Reuters Breakingviews) - A potential takeover of TikTok hinges more on the “how” than “how much.” Some investors in the social media app’s parent company ByteDance, among them General Atlantic and Sequoia, want to buy the video-sharing phenomenon for $50 billion, Reuters reported on Wednesday citing people familiar with the situation. That valuation suggests it will expand much faster than rivals like Snap, but it also suggests – optimistically – that TikTok will make a clean break from its Chinese roots.

Breakingviews - Unilever almost looks fair and lovely in India

22 Jul 2020

MUMBAI (Reuters Breakingviews) - Unilever is rebranding its controversial and lucrative “Fair & Lovely” skin-whitening products to “Glow & Lovely”. Both names are better apt to describe how its $73 billion Indian unit, Hindustan Unilever, is weathering a strict lockdown in the giant emerging market.

Breakingviews - OneWeb’s relaunch shortens distance to profit

06 Jul 2020

MUMBAI (Reuters Breakingviews) - OneWeb’s relaunch will better position it to go head-to-head with Jeff Bezos and Elon Musk in orbit. The collapsed SoftBank-backed satellite startup is set to exit bankruptcy and get back into the internet space race with a $1 billion injection from the owner of India’s Bharti Airtel, the world’s third-largest telecom operator, and the UK government. The deal, if approved, will shore up future revenue and reduce sizeable risks.

Breakingviews - India’s war on China apps will have network effect

30 Jun 2020

MUMBAI (Reuters Breakingviews) - India is extending a fight with China from the Himalayan mountains into cyberspace. ByteDance’s hugely popular video-streaming app TikTok is among 59, mostly Chinese, ones banned by New Delhi on national security concerns. It significantly narrows a top growth market for Chinese technology firms and may embolden other governments to shut them out. But the network effects could be messy all around.

Breakingviews - Remittance woes will transfer from poor to rich

26 Jun 2020

MUMBAI (Reuters Breakingviews) - The pain of shrinking remittances will be shared. From tech engineers in Silicon Valley to construction crews in the Arabian Gulf to domestic helpers in Lebanon, the global economic slump and accompanying job losses could fall by a record sum, lopping a fifth off some $700 billion sent home annually by such workers, according to the Pew Research Center. That money is a lifeline for poorer nations, which will be hit first. Richer countries should expect to suffer too. 

Breakingviews - Sovereign funds are having their rainy-day moment

23 Jun 2020

MUMBAI (Reuters Breakingviews) - Sovereign wealth funds are having their moment. These state-owned outfits come in a dizzying array of shapes and sizes. But they are all mostly considered as “rainy-day” funds for future generations. As the Covid-19 pandemic pushes economies around the world to their limits, these vehicles will play a big role in managing the fallout.

Breakingviews - Economic arsenals intensify India and China clash

17 Jun 2020

MUMBAI (Reuters Breakingviews) - Economic roads between India and China may prove as fraught as real ones running through the Himalayas. The first deadly clash between the nuclear powers in decades is even weightier given their deepening commercial links. Those were supposed to help maintain the peace, but instead it is looking like geopolitical and financial battles will feed on each other.

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