Business Bytes

April 2022

World

In the News World Bank freezes projects in Afghanistan The World Bank has suspended four projects in Afghanistan worth $600 billion dollars, because the Taliban hasW banned girls from returning to school. The ARTF (Afghanistan Reconstruction Trust) projects were planned to support the urgent needs in the education, health and agriculture sectors as well as community livelihoods. (Source: BBC)

Evergrande: China property giant misses debt deadline Bankers and fund managers say Evergrande’s default late last year spurred concerns over a lack of disclosure as international investors struggle to assess the company’s hidden debts.

Those worries were compounded this week after six Chinese property groups including EvergrandesaidtheywouldmissadeadlinetofileauditedannualresultsinHongKongthis month.

The fall in debt fundraising by Chinese real estate groups comes as international bondholders move closer to taking legal action against Evergrande. The group revealed this week that mystery lenders to its property services units had claimed more than $2bn of its cash, diminishing the chances of oshore bondholders recouping their losses. Many of the giant companies operate on extremely high debt.This overleverage is dangerous because these companies have assets, investments, and ties in so many places that if they failed the economy would take a massive hit.

Germany Takes a Step Towards Gas Rationing Germany has decided to create a warning to limit the gas used throughout the nation, due to refusing Moscow’s demands.

As Russia and Germany shared the NordStream 2 initiative, Germany has frozen the project until an agreement between Russia and Ukraine can be reached, in addition to agreeable conditions between Russia and the Western nations.

Source: NYPost

EU announces Circular Economy Action Plan EU commisioner Frans Timmermans states “It’s time to end the model of ‘take, make, break, and throw away’ that is so harmful to our planet,”

The EU is introducing measures to improve sustainability and enable more of a circular economy. One method of doing this is to make products, such as telephones last longer. or clothing more durable.

This would save costs through reduced energy needs in the production process and reduce waste.

TherewillalsobemoretransparencyforconsumersandprotectionagainstGreenwashing.Howe critics are concerned with the level of government involvement in the markets and eventual higher

Or , fo

Source: Tesla.com

Tesla opens Giga Factory in Berlin Tesla launched its new car factory outsideBerlin,withChiefExecutiveElonMuskhanding over the first deliveries to customers. The US carmaker's muchhyped Berlin plant is the largest for electric vehicles in Europe. The gigafactory will be able to produce up to 500,000 cars per year, when it reaches full capacity. On the other hand, Daimler produced 310,000 carsatitsSindelfingenplantin9,1 20 andsincethenhasopenedafuturisticenergyecient Factory56inSindelfingen.CapacitynumbersforFactory56arenotdisclosedhowever.

Tesla plans a second stock split: Tesla wants to split its stock so it can pay a stock dividend to shareholders, accordingtoafiling releasedonMonday (28.3.2022).

TheSecuritiesandExchangeCommissionfilingsaidtheelectriccarmakerwillaskatitsannual shareholders meeting “for an increase in the number of authorized shares of common stock [... ] in order to enable a stock split of the Company’s common stock in the form of a stock dividend.”

A stock dividend is a dividend paid to shareholders in the form of additional company shares instead of cash. These dividends do not aect the value of a company, but they dilute its share price.Inotherwords,ifthereisa6for1split,investorswillgetastockdividendoffiveshares foreveryoneshareofTeslatheyown.Thiswouldbeaonetimeevent.

Tesla’s shares were up more than 6% on the news.

W

Gorillas A Striking Start-Up Special Unicorn is the term used in the venture capital industry to describe a startup company with a value of over $1 billion. It was named after the mythical creature due to the rarity of such an event happening.

A quick delivery company, focusing on groceries. Gorillas run more than 140 warehouses, in which they store groceries, ready for delivery to over 60 trillion customers. Gorillas offers more than 1000 products on their IOS and Android Apps.

Gorillas mission statement states: “Gorillas exists to create a world with immediate access to your needs. We are not business people building a delivery company— we are delivery people building a business.”

Gorillas operate warehouses in major cities, from where workers, so-called “riders” , collect the goods ordered by a customer, and deliver them on one of the Gorillas E-bikes within 10 minutes.

Here in Stuttgart, a Gorillas warehouse is located on Gutenbergstraße 70, close to Schwabstraße. From a warehouse the delivery range is about 3 kilometers. Overall, Gorillas operate more than 140 warehouses.

INVESTORS In terms of venture capital investors, Gorillas has done incredibly well. From a seed funding round in August of 2020, until a Series C funding round in September in this year, Gorillas collected 1.3 billion USD of funding, most recently at a valuation of 4 billion USD. This funding comes from multiple investors, mostly from their lead investors, which include Delivery Hero, Tencent, Food Labs, Coatue, and DST Global. Nevertheless, as Gorillas offers goods at prices equal to supermarket levels, their sales margins and profits have been more than underwhelming. Yet, this is also the case for Gorillas main competitors Wolt and Flink, who have collected 1.1 billion USD and 822.5 million USD respectively, but face the same problems.

Sources:

When deciding where to invest, the main question to ask yourself is what is going to happen next?

Denoting that how the future will develop the next few years is the most important factor to have in mind when coming up with conclusions about where to invest.

For example, in recent years has been noticeable the increase on citizens’ interest about protecting the environment and taking action to avoid climate change. This could be a good sample of social issue to bear in mind and do some research about renewable energy companies that have tools to become successful in the near future.

Now, here’s a list of the best type of companies that are likely to be prosperous the next year as a hint for you to guess what is happening the upcoming years and what are the specific businesses you should invest on.

TOP 10 BEST INVESTMENTS FOR 2022 1. SPORTS BETTING BUSINESSES According to studies, sports betting is the most lucrative high-profit business to invest in in 2022, but is not made for everyone, as with any startup. Sports betting businesses are a great way to scale in the market and increase your profit margin.

2. YIELD FARMING Cryptocurrency investments are a growing industry as well; in particular, yield farming refers to a crypto strategy in which buyers earn an extra commission by

lending out their virtual coins to third parties. It increases their value since cryptocurrency creation is a complex process.

3. STOCKS Despite the COVID-19 pandemic that shut down every country, 2022 seems very promising for stock investors.

4. ECOMMERCE Ecommerce is one of the best investments to choose from. Since COVID-19, online stores have grown rapidly, and more people are opting to shop online instead of visiting a physical store.

5. REAL ESTATE By investing in real estate, you can get a higher return if you have enough financial market knowledge; for example, a good investment would be purchasing a home to later rent it to a tenant, this will give you a monthly income.

6. RENEWABLE ENERGY Renewable energy are becoming increasingly important to investors who want to ensure that their money is aiding the sustainability of the planet rather than harming it.

7. ELECTRIC VEHICLES Linked to the idea of renewable energy, it is important to know to that in recent years, the electric vehicle industry has grown in value and is rapidly overtaking the traditional motor industry.

8. ARTIFICIAL INTELLIGENCE In 2022, any technological investment is a great option, but artificial intelligence in particular, is expected to dominate technology and investment trends. It can be found everywhere, from cellphones and computers to televisions and refrigerators.

9. CYBERSECURITY As more and more transactions, purchases, and other important matters utilize technology, the risk of cyber attacks has never been higher. WThanks to its big demand in the market, investing in cybersecurity will bring you more revenue than other trends.

10. PRECIOUS METALS An investment in precious metals (especially gold) is highly advisable during uncertain times like the pandemic. Although gold has become somewhat obsolete, investing in companies that mine precious metals is still a good idea.

SOURCES:

https://earth.org/green-investing-for-the-future-of-the-planet/ https://www.forbes.com/sites/kenrapoza/2021/06/06/defi-yield-farming-what-is-it-how-should-you-invest-init/?sh=46104e902193

PUZZLE TIME!

Answers in the next edition of Business Bytes!

STEEPLE ANALYSIS

India

A STEEPLE analysis is used to analyse external factors that might affect the success of a business. It looks at areas such as social, technological, economic, environmental, political, legal, and ethical.

Social Factors Social factor refers to changes in trends which could impact business. The population of India is 1.38 billion people with 70% in the ages of 15 - 65. This provides a large potenital workforce attracting multinationals to the country. The aging population of India creates a high amount in pension costs and increase in the employment of older workers.

Technological Factors India is ranked 48th for innovation in the world, which demonstrates how the development of technology over time has benefited the country. By using technology in different businesses, businesses are able to be more efficient. This could be in terms of physical labour, services, products/market development, etc.

Environmental Factors India’s cities emit high concentrations of carbon dioxide and other pollutants, which could be harmful towards car manufacturing businesses or businesses within the vehicle industry. Many car manufacturing companies are located in India, such as Hyundai and Toyota, which could be a possible source of environmental impacts. However, this may benefit companies that are more environmentally conscious, such as hybrid car companies or bicycle manufacturers.

Economic Factors India’s economic growth has been exceptional in recent years. According to the IMF, the Indian economy grew by an estimated 9.5% in 2021. The country has a stable economy having an increase in government investments and has also achieved a high macroeconomic stability ranking (90/100). The Indian government has increased foreign direct investment (FDI) restrictions such as raising insurance and defence. This has led to significant progress in the overall business environment.

Political Factors India is one of the largest democracies in the world. The political environment is greatly influenced by government policies, politicians interest, and ideologies of several political parties. The taxation system is well-developed and split into categories such as service tax, income tax and sales tax.

Legal Factors In recent years there have been a number of legal changes implemented in India. Examples are recycling and minimum wage increase. This has directly affected businesse through increased costs.

Ethical Factors The Indian constitution robustly supports human rights. India has recently legislated several rights-based laws with far reaching impact, including the Right to Information and Right to Education Acts. Nevertheless, there exists a void where businesses – big and small – fail to understand their responsibilities to respect human rights. On the other hand, India is one of the better ranking countries when it comes to perceived public sector corruption.

Sources:

blogs/scientifically-trended/india-science-and-technology-in-the-21st-century/ https://en.wikipedia.org/wiki/Automotive_industry_in_India#:~:text=According%20to%20The%20New%20 York,%2C%20Volkswagen%2C%20and%20Maruti%20Suzuki. https://www.ethicaltrade.org/issues/business-and-human-rights-india https://timesofindia.indiatimes.com/ https://www.visualcapitalist.com/wp-content/uploads/2022/02/Mapping-Corruption-in-Countries-Around-theWorld-Full-Size.html