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Vedanta (VEDL) share price has done well this year even as the prices of key commodities like iron ore, aluminum, and copper retreated. It soared to a record high of ₹470.60, meaning that it has jumped by over 1,453% from its lowest point in 2020. This growth has pushed its market cap to over ₹1.75 trillion or $16 billion.

Commodity prices weakness

Vedanta is one of the biggest companies in the commodities industry. It is a key player in commodities like aluminium, zinc, lead and silver, oil and gas, iron ore, steel, copper, and power. 

The company’s goal is to go out there, source key minerals, and then bring them to India, one of the fastest countries in the world. India’s economy is expected to grow by over 7% this year while China is struggling to hit the 5% mark. 

Vedanta also sells its products around the world, especially in the Asian region, which is doing modestly well. It is made up of many subsidiary companies like Cairn India, Hindustan Zinc, BALCO, Talwandi Sabo, and Meenakshi Energy. 

Its challenge, however, is that the prices of key commodities that it specializes in are not doing well this year, which is a sign of low demand. Other items have struggled because of overcapacity from China, a country whose economy is slowing. 

Copper, often seen as a barometer of the world economy, has dropped by over 18% from its highest point this year. Similarly, the price of iron ore has dropped by more than 33% from the year-to-date high. 

Aluminium, a metal used in the engineering and construction industries, has also dropped by 40% from its 2022 highs and by 11% from the YTD highs. 

Vedanta is also a big player in the energy sector, where it produces crude oil. It moved into this industry by merging with Cairn Oil & Gas, and is hoping to grow the share of domestically-produced crude oil in the country. 

Crude oil price has retreated in the past few months as concerns about global demand remain. Its oil and gas production fell to 112 kboepd in the last quarter from 135 in 2023. 

Vedanta earnings

The most recent financial results showed that the company produced 596kt of alumium, up by 3% from the same period in 2023. Domestic sales rose by 27% to 268kt.

Vedanta also continued to break records in its zinc business as its mined and refined production soared to 263kt and 262kt, respectively. 

Altogether, Vedanta’s revenue rose by 6% to ₹35,239 crore or over $4.2 billion. Its EBITDA rose by 47% to ₹10,279 crore while the EBITDA margin was 34%. 

The challenge, however, is that its total debt has jumped in the past few months. It had a net debt of ₹56,338 crore in 2023 and ₹61,324 crore at the end of the last quarter with 83% of this debt being in INR and the remaining being in USD terms.

Outlook for Vedanta

Vedanta is a core part of the Indian economy. It has a close resemblance to Japan trading companies like Mitsubishi, Mitsui, and Marubeni that go out, buy resources, and ship them to Japan. 

The company has operations around the world that do exactly that since India has limited natural resources. Therefore, in theory, there is a likelihood that the company will continue doing well as long as India’s growth is continuing. 

However, the firm also faces some challenges. The most notable one is that China has overcapacity in key areas and is flooding the market with them. As a result, prices of key items like steel, copper, and aluminium will likely continue falling in the near term, which will affect Vedanta’s profits. 

The other challenge is that the company is relatively overvalued as these concerns remain. It has a price-to-earnings ratio of 33.7, higher than its five-year average of 5.5x, according to data by Fintel. 

Vedanta share price analysis

Turning to the weekly chart, we see that the Vedanta stock price peaked at ₹470 earlier this month as its bull run accelerated. It then formed a double-top pattern at that level. In most cases, this is one of the most bearish patterns in the market. The neckline of this pattern was at ₹387. 

Vedanta stock has remained above the 50-week and 200-week Exponential Moving Averages (EMA), meaning that bulls are in control.

Therefore, the short-term outlook for Vedanta is relatively bearish, with the next point to watch being the double top’s neckline at ₹387. A break below that level will see it move to the 50-week moving average at ₹350. 

However, a move above the double-top level of ₹468 will point to more upside as bulls target the next key resistance level at ₹500.

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Digital Realty (NYSE: DLR) stock price has staged a strong comeback this year and is hovering near its highest point on record. It has soared by almost 100% from its lowest point in 2023, bringing its market cap to over $53 billion. 

DLR has risen by almost 20% this year, outperforming other data center REITs like CyrusOne and Equinix. It has also done better than other companies in the REIT industry like Realty Income and VICI Properties.

Data center demand is rising

Digital Realty is one of the biggest players in the data center industry, where it provides the buildings used by large technology companies. Some of the most notable data center players are firms like Amazon, Microsoft, IBM, and Google.

Instead of building or buying their data center buildings, these firms typically lease them from real estate companies and pay monthly rents. This happens because these firms have the scale that is needed to operate data centers globally. 

In the case of Digital Realty, the company has a presence in five continents and 25 countries. It also has over 300 data centers, which it offers to over 5,000 of companies.

Digital Realty and other data center REITS like Iron Mountain have been in the spotlight this year because of the ongoing demand for data centers because of artificial intelligence. Altogether, analysts expect that large firms will continue investing over $1 trillion in data center as data demand rises. 

This growth explains why a company like Nvidia has become a $3 trillion organization while OpenAI has achieved $150 billion valuation in the private market. 

Digital Realty has grown over the years through acquisitions. In 2015, it acquired telx followed by companies like DuPont Fabros, Ascenty, Interxion, and Teraco, which has helped it to grow in more metros. 

Digital Realty income statement and balance sheet

DLR has been in a strong growth in the past few years, helped by the rising demand for data and acquisitions. Its annual revenue has jumped from over $3.2 billion in 2019 to over $5.4 billion last year. 

Its funds from operations (FFO) figure has jumped from $1.43 billion to $1.91 billion in 2023 and $1.92 billion in the last twelve months. FFO is an important metric for REITs because it provides a more accurate measure of their operational performance. It excludes non-cash depreciation and focuses on core operations.

The most recent financial results show that Digital Realty’s revenue came in at $1.4 billion in the second quarter, a 2% increase from Q1 and a 1% drop from the same quarter in 2023. Its net income was $75 million while its EBITDA rose by 2% to over $727 million. 

Most importantly, Digital Realty’s FFO per share was $1.57, up from $1.52 in Q2’23 while core FFO dropped to $1.65 from $1.68. 

Analysts expect that Digital Realty’s revenue will be $5.57 billion this year, a 1.8% increase from the same period in 2023. For 2025, its annual revenue will be about $6 billion.

Valuation and dividends

Digital Realty and other REITs are invested in because of their dividends. In its case, the company has a dividend yield of 3%, which is lower than most REITs. The small yield is because of the company’s strong stock performance over the years. 

Digital Realty has not boosted its dividend payouts in the last two financial years. It paid a dividend of $4.88 in the last two years straight years. On the positive side, the company will likely boost its payouts in the future. 

In addition to a frozen dividend, there is a risk that the company is highly overvalued because of its exposure in the data center industry. 

Digital realty has a price-to-AFFO ratio of 27, much higher than the sector median of 16. Its forward P/AFFO has moved to 25, higher than the industry’s median of 17. Therefore, it needs to grow its revenue and profitability to justify the valuation multiples.

Digital Realty stock price analysis

Digital Realty stock

The weekly chart shows that the DLR share price has been in a strong bull run in the past few months. It bottomed at $79.23 in 2023 and has rebounded to $157 today. 

Most recently, the stock formed an ascending channel pattern shown in blue. It also remains a few points below the key resistance point at $160, its highest swing in 2022. 

Digital Realty has remained above the 50-day and 200-week moving averages, which made a bullish crossover in November last year. In most periods, this pattern is one of the most bullish signs in the market. 

Therefore, the stock needs to move above the resistance point at $160 to continue the uptrend. If this happens, it will likely retreat and retest the lower side of the rising channel at $150.

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The Indian stock market traditionally witnesses a significant boost during the festive and wedding seasons and with Indians estimated to spend more than $50 billion during the wedding season between November and mid-December, certain sectors are likely to see a surge.

According to a note by Indian brokerage Prabhudas Lilladher, in 2024, the industry has already witnessed over 42 lakh weddings from 15 January to 15 July, generating an estimated expenditure of $66.4 billion (Rs 5.5 lakh crore), according to a survey by the Confederation of All India Traders (CAIT).

India is projected to host another 35 lakh weddings between November and mid-December alone, up from 32 lakh weddings during the same period in 2023.

This is expected to contribute approximately Rs 4.25 lakh crore ($51.20 billion USD) in economic activity.

The government’s push for the wedding industry

The Indian government aims to strategically boost tourism in India by positioning the country as a premier destination for international weddings.

The campaign will start by profiling around 25 key destinations across India, showcasing how the country meets diverse wedding aspirations.

Inspired by the Make in India campaign, this strategy seeks to attract approximately $12.1 billion (Rs 1 lakh crore) that is currently spent on destination weddings abroad.

The CAIT has dubbed this forward-thinking initiative as a strategic effort to stem the outflow of currency from India.

Key sectors to benefit 

According to PL Capita, with the festive and wedding seasons driving up consumer demand, certain sectors of the Indian stock market are likely to see a surge.

Retail stocks, particularly those related to clothing, home decor, and luxury goods, are expected to experience gains as families spend on elaborate ceremonies and gift-giving traditions, the brokerage said.

The jewellery sector is also set for a significant boost due to cultural ties between weddings and gold purchases.

The recent reduction in gold import duties from 15% to 6% is likely to further increase gold demand, with consumers using this opportunity to make large investments.

Source: PL Capital

“The cultural and religious significance of gold, combined with its role as a valuable investment, is expected to drive a substantial uptick in demand,” said Vikram Kasat, head of advisory at PL Capital.

Major jewellery companies like Titan and Kalyan Jewellers are likely to see their stock prices climb due to this heightened activity.

The hospitality industry will also see significant gains as more weddings are held in lavish venues, with an increase in the number of guests following the pandemic.

Hotels, airlines, and travel-related businesses stand to benefit as families spend on destination weddings and event services.

8 stocks to likely to look at

These are some of the stocks that are likely to benefit, according to the brokerage:

Arvind Fashions

Arvind Fashions is a prominent player in India’s apparel industry, offering premium brands like Arrow, US Polo, and Flying Machine.

During the wedding season, the demand for formalwear, ethnic wear, and high-end fashion surges, positioning Arvind Fashions to benefit from increased spending on luxury and occasion-specific clothing.

Ethos

Ethos is India’s largest luxury watch retailer, offering high-end brands like Rolex, Omega, and Cartier.

The Indian wedding season, known for grand celebrations and gift-giving, drives demand for premium watches, making Ethos a beneficiary as customers seek luxury gifts and accessories for special occasions.

InterGlobe Aviation (IndiGo)

As India’s leading airline, InterGlobe Aviation, the parent company of IndiGo, stands to benefit from the rise in travel during the wedding season.

With destination weddings and increased domestic and international travel for ceremonies, IndiGo is set to capitalize on higher demand for flights.

Hero MotoCorp:

Hero MotoCorp, the world’s largest two-wheeler manufacturer, could see a boost during the wedding season as families often purchase new vehicles as gifts or for personal use.

The company’s affordable range of motorcycles and scooters makes it a popular choice for gifting during weddings.

Source: PL Capital

Titan:

Titan, known for its luxury watches and jewelry brands like Tanishq, stands to gain immensely during the wedding season.

Gold and diamond jewellery are integral to Indian weddings, and Titan’s trusted brands are likely to see heightened demand as families make significant jewellery purchases.

Safari Industries:

Safari Industries, a key player in India’s luggage market, will likely benefit from the increased travel associated with weddings.

Whether for destination weddings or honeymoon trips, the demand for luggage and travel accessories tends to rise sharply during this period.

Sai Silks (Kalamandir):

Sai Silks, with its flagship brand Kalamandir, specializes in ethnic and bridal wear, making it well-positioned for the wedding season.

With millions of weddings taking place, the demand for sarees, lehengas, and other traditional attire surges, directly boosting the company’s sales.

Lemon Tree Hotels:

Lemon Tree Hotels, catering to midscale and economy travelers, stands to gain from the spike in bookings during wedding season.

With an increase in both domestic weddings and destination celebrations, the hospitality sector sees strong demand, especially from families and guests seeking affordable accommodation options.

The post Indians to spend more than $50 during the upcoming wedding bonanza: 8 stocks likely to benefit appeared first on Invezz

Nikola Corp (NASDAQ: NKLA) has investors wondering if it could follow Tesla Inc (NASDAQ: TSLA) in creating substantial wealth or if it’s on a path similar to Fisker Inc, which succumbed to industry pressures and declared bankruptcy in June.

Tesla’s early investors have seen significant gains thanks to its first-mover advantage in the electric vehicle (EV) market.

In contrast, Fisker struggled with declining demand and failed to maintain financial stability.

So, where does Nikola stand?

Nikola is burning cash like there’s no tomorrow

Nikola is currently facing financial challenges that could spell trouble for its investors.

Recently, the company executed a 1-for-30 reverse stock split to maintain its listing on the Nasdaq Stock Exchange—a red flag signaling potential weakness.

Nikola’s cash burn rate is alarming, with an operating cash flow of approximately negative $459 million over the past year.

As of the end of the second financial quarter, the company had a mere quarter-million in cash and cash equivalents while its long-term debt and finance lease liabilities exceeded $266,000.

Additionally, Nikola has issued several convertible notes, which, when converted to common equity, will further inflate its share count.

Last month, Nikola issued another convertible bond, raising $80 million in gross proceeds, and plans to issue an additional $80 million in convertible bonds pending shareholder approval.

In 2023, the company’s stock-based compensation totaled $75.4 million.

While management projects a reduction to approximately $30 million in 2024, this still represents over 10% of Nikola’s current market capitalization.

Moreover, Nikola faces stiff competition from Tesla Semi, which threatens to overshadow its efforts in the trucking sector.

Should you buy Nikola stock in September?

The company’s track record of overpromising and underdelivering has only compounded investor concerns.

In 2023, Nikola projected 3,500 deliveries of its battery electric vehicles (BEVs) and 2,000 deliveries of its fuel cell electric vehicles (FCEVs), but only managed 79 BEVs and 35 FCEVs.

Revenue expectations also fell drastically, with the firm generating just $36 million last year, a sharp decline from the anticipated $1.41 billion.

However, there is a glimmer of hope. Nikola reported an 80% increase in deliveries of its hydrogen fuel cell trucks for 2024, which contributed to a more than fourfold increase in revenue to $31.3 million in its latest quarter.

This improvement has led Wall Street to maintain an “overweight” rating on Nikola stock, with a target price averaging $16.80.

Investors should proceed with caution. While recent performance shows signs of recovery, a few strong quarters don’t necessarily indicate a sustained trend.

A relapse in financial performance could lead to further declines in Nikola’s share price.

The post Nikola stock: potential millionaire maker or another Fisker? appeared first on Invezz

Bill Gates recently shared his thoughts on the current artificial intelligence (AI) boom, revealing that if he were a 20-year-old entrepreneur today, he would immerse himself in the AI gold rush.

Gates, the billionaire founder of Microsoft Corp, which has a substantial stake in OpenAI, is a significant voice in technology, and his comments carry weight in the world of AI stocks.

Gates envisions building an AI-centric startup if he could restart his career.

He believes that today’s AI startups only need a “few sketch ideas” to attract billions in investment—a scenario that embodies the entrepreneur’s dream.

This year alone, AI startups have attracted over $26 billion in funding.

Gates recommends being unique in using AI

According to Gates, success in the AI space hinges on a unique approach to solutions.

He suggests that a novel use of AI could set a startup apart in a market filled with competitors.

Gates mentioned that if his startup were well-funded, he would challenge industry giants like Nvidia, Google, and OpenAI.

Gates also pointed out that finding a niche in AI that is not already saturated with competition could be a winning strategy.

In a recent discussion with CNBC Make It, he acknowledged the difficulty of creating groundbreaking AI applications today.

He noted that the vision of revolutionizing the world with computers and software was unique in the 1970s, but now, many are already focused on AI.

Bill Gates’ message to the new generation

Despite the crowded AI landscape, Gates remains optimistic about the innovation potential.

He believes there are still unexplored opportunities for fresh perspectives in AI.

Gates encourages young entrepreneurs to view this as a frontier ripe for exploration, suggesting that their unique vantage point could lead to significant breakthroughs.

Gates emphasized that while designing innovative AI systems in 2024 is challenging, it is not impossible.

He motivates young people, whether at Microsoft, OpenAI, or elsewhere, to seize the opportunity to offer new insights and solutions in the AI field.

AI stocks have surged in popularity since the beginning of the year, with companies like Nvidia seeing their shares triple in value.

This surge has contributed to the S&P 500 reaching an all-time high of 5,667 on July 16th, and many analysts project continued growth driven by the AI frenzy.

Gates’ insights reflect a broader trend where innovative AI ventures are attracting substantial investment, signaling that the AI revolution is still evolving and full of potential.

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Chinese stocks could benefit as the US Federal Reserve prepares to announce its first rate cut this week, according to Steven Sun, the head of research at HSBC Qianhai Securities. This move may also prompt action from the People’s Bank of China.

“US monetary easing could be a catalyst for a rerating of growth sectors in Chinese markets, with growth outperforming value by an average of 44 percentage points,” Sun wrote in a research note to clients today.

The iShares MSCI China ETF is currently down nearly 15% from its year-to-date high in mid-May.

How could Chinese stocks gain from US monetary easing?

Chinese stocks have faced pressure recently as global institutions favoured US Treasuries and companies like Nvidia Corp due to higher interest rates in the United States compared to China.

However, Chinese equities could see higher price-to-earnings multiples following the Fed’s expected first rate cut on September 18, Steven Sun of HSBC noted in his note.

We stress that earnings growth is the key. We think growth sectors like semiconductors and consumer electronics, which recorded strong earnings in 1H24, could outperform during the upcoming easing cycle.

Historically, lower interest rates in the US have boosted global liquidity, some of which tends to flow into the emerging markets like China.

Additionally, the Federal Reserve often lowers rates to stimulate a stronger US economy, leading to an increased demand for Chinese goods and benefitting stocks of the related companies as well.

Beyond rate cuts: what Chinese stocks need for recovery

While lower interest rates typically improve risk appetite, encouraging investments in higher-risk assets such as Chinese stocks,some experts believe that Beijing needs more than an accommodative monetary policy to attract global investors.

Laura Wang of Morgan Stanley, for instance, believes “business fundamentals” will remain the primary factor in whether investors choose to invest in China equities or not.

Similarly, Aaron Costello of Cambridge Associates considers Chinese stocks as attractively priced at writing but dubs a “fundamental crisis of confidence” tied to the ongoing turmoil in Beijing’s real estate market as the main issue.

Costello also cautioned that lower interest rates may not necessarily boost the economy and, therefore, the stock prices in China if “households don’t want to spend the extra income.” Last week, Bill Winters, the chief executive of Standard Chartered warned clients that China’s housing crisis, despite occasional signs of increased recovery, may not be over just yet.

The outlook for the country’s housing market and broader economy remains uncertain.

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The global race to reduce reliance on China for rare earth minerals is facing significant challenges, as countries like the US, Japan, and Australia struggle to establish alternative supply chains.

These critical minerals are essential for high-tech industries, from electric vehicles to military technology, and securing their supply has become a strategic priority.

Despite multi-billion-dollar investments, delays in construction and declining prices are casting doubt on the ability of these nations to break free from China’s market dominance.

Source: Bloomberg

Rare earth projects in US and Australia face setbacks

Lynas Rare Earths Ltd. leads the US efforts to establish an independent supply chain for rare earths.

The company is constructing a processing plant in Texas, funded by over $300 million in Pentagon contracts.

However, the project has faced significant delays due to environmental permitting issues, pushing back its expected opening.

This delay highlights the hurdles facing the US in its quest for supply chain self-sufficiency.

Similarly, Australia’s Arafura Rare Earths Ltd., which received A$840 million ($560 million) in government loans, is also encountering delays.

The company’s Nolans project, which was expected to begin ramping up production this year, has not yet commenced construction.

These setbacks signal broader challenges for Western nations attempting to establish a reliable rare earth supply chain outside China.

China’s market manipulation

China continues to hold a tight grip on the rare earths market, controlling about 70% of global output and over 90% of refining capacity.

This dominance allows China to influence market prices, creating further complications for rival projects.

Recent price declines, driven by an oversupply from China and a weakening domestic economy, have undercut the profitability of new ventures in the US and Australia.

Iluka Resources Ltd., which received a A$1.25 billion loan to build Australia’s first integrated rare earths refinery, is also facing challenges.

The company has been hit with soaring costs that exceed initial projections, delaying the project’s expected 2026 opening.

China’s ability to manipulate prices exacerbates these difficulties, making it harder for competing projects to get off the ground.

Lessons from Japan

Japan’s struggle to reduce dependence on Chinese rare earths offers valuable lessons for other nations.

In 2010, following a territorial dispute, China temporarily halted rare earth exports to Japan, prompting Tokyo to seek alternative sources.

Japan invested heavily in companies like Lynas, helping it survive periods of low prices and operational difficulties.

This support has reduced Japan’s reliance on Chinese rare earths from 80%-90% to around 60%.

Japan’s decade-long effort highlights the long-term commitment and financial resilience required to compete in the rare earths market.

For countries like the US and Australia, Japan’s experience underscores that breaking free from Chinese dominance won’t happen overnight—it will require significant investment, patience, and perseverance.

Environmental and financial challenges threaten supply

Beyond economic factors, environmental concerns also loom large.

Rare earth mining and processing can lead to significant environmental degradation, including water pollution and habitat destruction.

These issues have led to delays in permitting and construction for projects in both the US and Australia, further complicating efforts to establish a sustainable and independent supply chain.

The environmental impact of rare earth production raises a critical question: can nations outside China develop an industry that is both economically viable and environmentally sustainable?

As these challenges persist, the future of the global rare earth supply chain remains uncertain.

The global race to secure rare earths is a complex, decades-long endeavor, as emphasized by Lynas CEO Amanda Lacaze.

Establishing a new industry requires patient capital, long-term commitment, and the ability to navigate economic, environmental, and geopolitical challenges.

For the US, Japan, and Australia, success will depend on their ability to overcome these hurdles.

While efforts to reduce reliance on China are advancing, the path to a truly independent rare earths supply chain will be fraught with difficulties, and the global market will continue to feel China’s influence for the foreseeable future.

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Shares of Ola Electric Mobility have garnered significant attention during Tuesday’s trading session following buy ratings from two major global brokerages, Goldman Sachs and BofA Securities.

The share price increased by more than 7% on the positive brokerage notes. This follows a largely flat period since its muted listing over a month ago.

After hitting a peak of Rs 157.53 on August 20, the stock has been trading in a range and closed at Rs 107.65 in the previous session, losing over 3% in a listless market.

Bullish outlook from Goldman Sachs and BofA Securities

Goldman Sachs has set a target price of Rs 160 on Ola Electric, implying a 49.53% upside from Monday’s closing price.

The global brokerage expects the company to achieve significant milestones, including an EBITDA breakeven by FY27 and a free cash flow (FCF) breakeven by FY30.

Goldman Sachs projects a robust revenue growth of over 40% compounded annually from FY24 to FY30, with an 11.9% EBITDA margin and a 27% return on invested capital (ROIC) by FY30.

“We view Ola Electric as positively levered to long-term structural trends in India’s electric two-wheeler market despite debates around its in-house battery cell manufacturing,” Goldman Sachs stated.

Meanwhile, BofA Securities has set a target price of Rs 145, signaling a potential 36% upside.

The brokerage emphasized the company’s technology and cost leadership, which it believes positions Ola Electric well to navigate the competitive landscape.

BofA also highlighted the company’s dominance in the electric two-wheeler (E2W) market, with a 40% share year-to-date in 2024.

“The adoption rate of electric two-wheelers in India, currently at 6.5%, is expected to rise to 25% by FY30, and Ola’s leadership in technology and cost will drive its success,” BofA Securities remarked.

Source: Finshots

Concerns from Ambit Capital and HSBC

While the outlook from Goldman Sachs and BofA Securities is bullish, Ambit Capital has a more cautious perspective.

Ambit recently initiated coverage on Ola Electric with a ‘Sell’ rating and a target price of Rs 99.60, citing concerns about increasing competition and potential policy risks.

“New players like Honda and Suzuki entering the market, combined with existing OEMs expanding their portfolios, could erode Ola Electric’s market share from 42.4% in FY25 to 25% by FY31,” Ambit Capital warned.

The firm also raised concerns about the capex-intensive nature of Ola Electric’s business model and the risk of changes in government incentives.

Adding to the cautious sentiment, HSBC also retained its ‘Buy’ rating but flagged concerns about Ola Electric’s recent market share losses.

The brokerage suspects that the losses could be attributed to the ramp-up of lower-cost variants from competitors and noted that there is a 15-20% downside risk to volume estimates for FY25 and FY26 if these trends continue.

Market share and the road ahead

Despite the mixed outlook from various brokerages, Ola Electric’s position as a market leader in the Indian electric two-wheeler space remains solid.

As the company works towards its breakeven targets and navigates a rapidly evolving competitive landscape, the coming years will be crucial in determining whether Ola Electric can maintain its market leadership and fulfill its growth potential.

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Thousands of workers descended on Brussels on Monday, causing disruptions near the European Parliament as they set off firecrackers and blocked streets in a large-scale demonstration.

The protest was organized to show solidarity with employees at an Audi factory in Brussels facing potential job cuts as part of the shift toward greener technologies.

More than 5,000 protesters from Belgium and neighboring countries joined the march, voicing concerns over the threat of job losses and the pressure cheaper foreign competitors, particularly from China, are placing on Europe’s industries.

Audi workers fear losing 3,000 jobs

The rally, led by trade unions, began at Brussels’ North train station and moved towards the European Parliament.

Protesters carried placards supporting the Audi workers and demanded an end to the “dumping” of industrial products by Chinese manufacturers.

With public transport disrupted due to a national strike, the demonstration highlighted growing fears that key European industries may not survive the transition to greener technologies.

Audi’s factory in Forest, a suburb of Brussels, employs 3,000 workers, 90% of whom could lose their jobs within the next year, despite the plant’s focus on manufacturing electric vehicles (EVs).

Audi factory closure: EU policies under scrutiny

Union leaders argue that even facilities focused on green manufacturing, such as Audi’s EV plant, are at risk. Protesters, enveloped in green and pink smoke from the trade unions, expressed frustration over the lack of support from both the Belgian government and the European Union (EU).

As tensions rose, police stationed water cannons nearby, anticipating potential escalations.

Many workers, including the families of long-time employees, took to the streets, demanding stronger action to protect jobs.

European Commission President Ursula von der Leyen has pledged to introduce a “Clean Industrial Act” within the first 100 days of her new term.

This policy aims to assist high-emission sectors in transitioning to greener practices while keeping production within Europe.

However, the specifics of financial support tied to the policy remain unclear, raising concerns among European workers and businesses alike.

Alongside domestic policy changes, the EU is also considering tariffs on Chinese-made EVs.

A recent investigation revealed that these vehicles benefit from significant state subsidies, leading to oversupply in the European market.

Trade Commissioner Valdis Dombrovskis is scheduled to meet with China’s Commerce Minister Wang Wentao to discuss the investigation’s findings, with an important vote by EU member states on the proposed tariffs slated for September 25.

Preserve Europe’s competitive edge

As Europe grapples with maintaining competitiveness, there have been increasing calls for substantial investment.

Former European Central Bank President Mario Draghi recently suggested that the EU allocate up to €800 billion to address the “existential challenge” of falling behind global rivals.

Draghi warned that without such action, Europe’s economy could face a “slow agony.”

European business groups have also urged the EU to cut red tape and reduce energy costs to help industries stay competitive.

The automotive sector, led by companies like Volkswagen AG, is considering requesting a two-year delay in meeting the 2025 emissions targets, as the company faces significant challenges in reaching those goals.

Audi workers’ protests are part of a wider wave of unrest in Brussels. Recent months have seen farmers block the city with tractors in response to rising costs and strict environmental regulations.

In response, von der Leyen has shelved some of the regulations and initiated “strategic dialogues” with affected sectors.

Balancing her green agenda with support for key industries will be one of the Commission’s most significant challenges in the coming years.

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Chinese stocks could benefit as the US Federal Reserve prepares to announce its first rate cut this week, according to Steven Sun, the head of research at HSBC Qianhai Securities. This move may also prompt action from the People’s Bank of China.

“US monetary easing could be a catalyst for a rerating of growth sectors in Chinese markets, with growth outperforming value by an average of 44 percentage points,” Sun wrote in a research note to clients today.

The iShares MSCI China ETF is currently down nearly 15% from its year-to-date high in mid-May.

How could Chinese stocks gain from US monetary easing?

Chinese stocks have faced pressure recently as global institutions favoured US Treasuries and companies like Nvidia Corp due to higher interest rates in the United States compared to China.

However, Chinese equities could see higher price-to-earnings multiples following the Fed’s expected first rate cut on September 18, Steven Sun of HSBC noted in his note.

We stress that earnings growth is the key. We think growth sectors like semiconductors and consumer electronics, which recorded strong earnings in 1H24, could outperform during the upcoming easing cycle.

Historically, lower interest rates in the US have boosted global liquidity, some of which tends to flow into the emerging markets like China.

Additionally, the Federal Reserve often lowers rates to stimulate a stronger US economy, leading to an increased demand for Chinese goods and benefitting stocks of the related companies as well.

Beyond rate cuts: what Chinese stocks need for recovery

While lower interest rates typically improve risk appetite, encouraging investments in higher-risk assets such as Chinese stocks,some experts believe that Beijing needs more than an accommodative monetary policy to attract global investors.

Laura Wang of Morgan Stanley, for instance, believes “business fundamentals” will remain the primary factor in whether investors choose to invest in China equities or not.

Similarly, Aaron Costello of Cambridge Associates considers Chinese stocks as attractively priced at writing but dubs a “fundamental crisis of confidence” tied to the ongoing turmoil in Beijing’s real estate market as the main issue.

Costello also cautioned that lower interest rates may not necessarily boost the economy and, therefore, the stock prices in China if “households don’t want to spend the extra income.” Last week, Bill Winters, the chief executive of Standard Chartered warned clients that China’s housing crisis, despite occasional signs of increased recovery, may not be over just yet.

The outlook for the country’s housing market and broader economy remains uncertain.

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