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Purchase of shares from Tiger Global values Indian e-commerce company at about $35 billion

Walmart WMT 0.47%increase; green up pointing triangle has paid $1.4 billion to buy out a large investor in Flipkart, further cementing its control of the Indian e-commerce giant.

In recent days, Walmart bought the remaining shares of Flipkart owned by Tiger Global, according to a letter the New York hedge-fund sent to its investors that was reviewed by The Wall Street Journal.

The transaction valued Flipkart at $35 billion, down from nearly $38 billion when it sold shares to Japan’s SoftBank, Walmart and other investors in 2021.

The investment offers the U.S. retail behemoth greater exposure to the fast-growing global digital-consumer market.

Privately held Flipkart is one of the largest e-commerce companies in India. Started in 2007, Flipkart said last month it had a customer base of over 450 million and offered over 150 million products across 80-plus categories through its marketplace.

Flipkart’s business spans everything from traditional e-commerce to an online-prescription service and bricks-and-mortar stores.

In 2018, Walmart paid $16 billion for a 77% stake in the company, its largest acquisition to date. More recently, the stake stood at about 75%; it couldn’t be learned what it is now.

Walmart earns the majority of its revenue and profit from its U.S. business and has pared down other international operations in recent years, selling off much of its stake in U.K. retailer Asda and its operations in Brazil, Japan and Argentina.

Tiger and Flipkart have a long history. The hedge fund’s first investment in the company dates back to 2009, and Flipkart’s current chief executive, Kalyan Krishnamurthy, is a former managing director at Tiger.

The hedge-fund firm invested nearly $1.2 billion in Flipkart between 2010 and 2015 and has generated $3.5 billion in gains, according to the investor letter, a bright spot in a difficult environment for startup investors.

Investors await concrete policy measures to revive stalled growth as manufacturing recovery lags

Manufacturing activity in China contracted for a fourth straight month in July while growth in services and other sectors slipped, adding to calls for Beijing to unveil concrete measures to boost the flagging recovery of the world’s second-biggest economy.

China’s official manufacturing sector purchasing managers’ index for July came in at 49.3, slightly higher than analysts’ forecasts of 49.2 and above June’s reading of 49 but still in contraction territory.

The non-manufacturing PMI, which includes sectors such as construction and agriculture, fell to 51.5 from 53.2 the previous month. It was short of the 53 forecast by Goldman Sachs.

A reading below 50 indicates a month-on-month contraction, while one above 50 signals an expansion.

The July “data provides little encouragement that the economy is turning the corner”, Robert Carnell, head of Asia-Pacific research at ING, the Dutch bank, wrote in a note.

An anticipated manufacturing and export-led rebound from pandemic restrictions has failed to materialise for China’s economy this year as global economic conditions have deteriorated.

Growth in the country’s huge services sector, an important source of employment, has weakened, while slowing consumer spending and investment, weak exports and a property sector liquidity crisis have hampered growth.

Gross domestic product rose 0.8 per cent in the second quarter compared with the previous three months, well below forecasts.

The Chinese Communist party’s senior decision-making body, the politburo, last week announced measures to try to boost the flagging economy, which it acknowledged was making “tortuous progress”. Government departments have released initiatives to try to boost growth, and the central bank has eased monetary policy.

But analysts said Beijing would probably not unleash broader fiscal stimulus because of high debt levels, especially among local governments.

The PMI figures show “there is yet to be a significant turnaround in the softening recovery activity”, said Erin Xin, greater China economist at HSBC. “This puts more onus on policymakers to move swiftly to provide much-needed policy support, echoing the pledge made in the recent politburo meeting last week.”

Xin added that contractions in the July PMI sub-indices for employment could indicate that economic conditions would “continue to weigh on jobs and consumption, possibly delaying a full recovery”.

Youth unemployment soared to a record 21.3 per cent in June.

The National Development and Reform Commission, China’s state planner, will hold a press conference on Monday afternoon where it promised to unveil measures to increase spending.

China’s benchmark CSI 300 rose 0.5 per cent on Monday after the PMI data release, while the Hang Seng China Enterprises index added 2 per cent, with technology and property stocks climbing sharply on expectations that policymakers would have to step up efforts to stimulate the economy.

The slowdown in July in non-manufacturing activity, a rare bright spot, pushed the gauge closer to contraction, with most sub-indices other than business expectations already near or below the 50-point threshold.

“We can only put this down to continued hope that the government will pull something out of the bag that will reinvigorate the economy,” said Carnell. “However . . . we aren’t at all convinced that there is a fiscal bazooka waiting to fire up the economy.”

Analysts at Citi, though, argued that the decline in manufacturing activity was showing signs of easing, indicating that “industrial momentum” might be “showing signs of bottoming”.

Separate data from research group China Beige Book, which publishes alternative economic indicators, showed manufacturing activity picked up in July, but retail sales were markedly down compared with the previous month.

The Chinese carmakers planning to shake up the European market

BYD, Nio, Chery and others want to use their expertise in electric vehicles to take advantage of the continent’s coming ban on the sale of new petrol and diesel cars