Auquan's Weekly Wrap | 28th - 3rd February: What you might have missed

Top Themes

Inflation in Consumer Staples

Inflation in consumer staples is a global theme that has been affecting consumers across the world. The rising cost of food is being felt everywhere, with countries like Germany, the Philippines, Pakistan, and the US experiencing increased food prices. The food industry is grappling with rising prices for raw materials, like chicken eggs and raw milk, resulting in a surge in the cost of end products like tamagoyaki, yoghurt, and butter. To ease the burden on households, the German government is considering reducing the value-added tax (VAT) on certain foods, but not everyone would benefit equally from the measure. On the other hand, countries like Pakistan face a food crisis due to a shortage of basic foodstuffs like wheat flour.

• Ajikan's FY23/3 Downward Revision, Egg Grilling Struggles with Bird Flu
• Eye-watering onion prices make Philippine staple a luxury
• Turkey presses retailers to partially freeze prices ahead of elections
• Pakistan wheat shortage: People fight over flour sacks in markets; minister says a crisis can worsen further

Credit Card Delinquencies

Credit card delinquencies are rising in the US, as data from TransUnion reveals that total credit-card balances hit a record high of $930 billion in the fourth quarter, an 18% increase from a year earlier. The rising trend in delinquencies is due to the combination of higher interest rates and inflation, which is making it harder for consumers to pay off their debts. Brazil's credit card delinquency rates have also skyrocketed, reaching 44% in some cases. This has caused the country's biggest banks to limit credit access to those in need, leading some experts to question the fintech industry's ability to serve those who are unbanked.

• Consumers are piling on credit card debt, flashing signs of a potential crisis
• Credit Binge Sees UK Shoppers Use Debt to Buy TVs and Milk
• The 'Buy Now, Pay Later' Bubble Is About to Burst
• Brazil Consumer-Delinquency Rates Skyrocket as Emergency Credit Swells

Adani Group Accounting Fraud Charges

The Reserve Bank of India (RBI) has requested information from local banks regarding their exposure to the Adani Group due to a report from US short-seller Hindenburg Research. The central bank and stock market regulator investigate potential irregularities and bank exposures. Adani's businesses have lost over $100 billion in value, and listed companies, including TotalEnergies, have seen share price drops and trading halts. Banks such as Credit Suisse and Citigroup have ceased accepting Adani bonds as collateral. The recent issues surrounding Adani have led to reduced exposure by foreign investors to the Indian stock market.

• India central bank asks local banks for details of exposure to Adani group: Report
• Citigroup Halts Margin Loans on Adani Group's Securities
• Adani's market losses top US$100 billion as crisis shockwaves spread
• Bill Ackman says Hindenburg's Adani report 'highly credible'

Microsoft Antitrust Probe

Microsoft is facing a new antitrust probe by the European Commission over its purchase of Activision Blizzard King and has been issued a €60 million fine by the French privacy regulator CNIL over insufficiently transparent cookie consent policies. The company made a preliminary offer of concessions to try to allay the EU's concerns. Microsoft, which has been fined 2.2 billion euros in the previous decade by the EU for cases involving "tying" and other practices, declined to comment on the latest regulatory action.

• FOSS Patents: European Commission hands down Statement of Objections against Microsoft's purchase of Activision Blizzard King: MLex
• More trouble for Microsoft-Activision Blizzard deal in Europe
• French Regulator Hits Microsoft With €60 Million Fine Over Bing Cookie Consent
• Microsoft seeks to settle EU antitrust concerns over Teams -sources

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