MARKET PERSPECTIVE

By J Mulraj

Sep 12-18, 2026

Fiddling as the world burns

Image created by ChatGPT

Some mindless global leaders, with a blood lust, are destroying the world, leaving behind a wake of death, destruction and destitution. They are the modern day Nero’s, fiddling as the world burns.

Michael Jackson brought this out in his poignant Earth Song.

Did you ever stopped to notice
All the blood we’ve shed before?
Did you ever stop to notice
This crying Earth, these weeping shores?

Consider this. If building something (a road, a building, a port) is added to the GDP, shouldn’t its destruction lead to a subtraction from GDP? So, given the destruction caused in ongoing wars in Iran, Ukraine, Yemen and other places, actually result in, probably a global de-growth of GDP? If so presented to investors, would stock markets be where they are?

But that’s only a part of the stupidity, the insanity and the perfidy of war.

The US-Iran war has cost, as per the Pentagon, a humungous $ 33 billion, for a nation already $40 trillion in debt. Moreover, the resultant closure of the Strait of Hormuz has resulted in the price of oil shooting up, causing grief to all nations. The average price of Brent crude was $ 71/b in February, before the war started; it is now $ 104. A 46% increase!

Closure of the Strait of Hormuz has blocked not only 20% of global oil trade, but also other commodities.

Urea, produced by Saudi Arabia, Qatar, UAE and Iran, has a share of 21% in global trade, saw a 40% hike in price. Sulphur, used to make phosphatic fertiliser, accounting for around 45% of global trade, saw a 40% increase in price. Aluminium, produced by various Gulf countries, which accounts for 10-15% of global trade, saw an approximately 19% rise in prices.

Shortage, and higher prices, of urea, and phosphatic fertiliser, will result in a food shortage, and of famine in the poorer countries unable to afford the higher prices.

The war between Russia and Ukraine, which produce 13% of the world’s wheat, will result in a shortage of bread soon. As is known, a similar shortage in 2011 led to a surge of protests in the Middle East, called the Arab Spring, and to the overthrow of some Governments.

Another casualty of the war is diesel. This is attributable to two reasons; both a consequence of wars. Ukraine has been targeting Russian refineries producing diesel, and a blockade of the Strait of Hormuz has reduced supplies of crude oil. This has resulted in a 1.6 million barrels/day drop in production, on a demand of 28-29 m. barrels/day. Diesel price has gone up 69% in USA since the war began.

High prices of commodities, of crude and of diesel, would impact the Nov 4 mid term elections, dampening the prospects for the Republican Party to retain a majority in Congress and/or Senate. Since he initiated the war on Iran, believing it would be over in a week’s time (it’s lasted 6 months), it seems that what goes around, comes around.

Wars, of course, have awful environmental impact, raising greenhouse gases. Over the past 47 years, a whopping 12 trillion tonnes of ice has melted, due to global warming, for which wars are a part. The melted snow has increased the sea level by an inch, which has affected the lives of 3 m. people.

The arms race to produce the next victory is a MAD race (Mutually Assured Destruction). Now the Chinese are carrying conflicts to outer space, developing a 100 GW microwave weapon that can fry a satellite in space. Star Wars will have a literal meaning.

And what is happening in India? Sadly, it appears that the RBI may be about to dismantle a beautiful philanthropic effort launched years ago by the house of Tatas. The two sons of Jamshetji Tata settled much of their wealth to Charitable Trusts, viz the Sir Ratanji Tata Trust (SRTT) in 1919 and Sir Dorabji Tata Trust (SDTT) in 1932. Both trusts donated their earnings to charity, in the fields of education, healthcare and other causes.

The earnings came from dividends from operating group companies. Both Trusts cumulatively hold some 66% of Tata Sons, the group holding company, the Board of which controls the companies, the capital allocation and the dividend policy.

Looking at the family tree, both Dorabji and Ratanji had no biological children. Ratanji adopted Naval Tata, who had two sons, Ratan N. Tata and Jimmy Tata, both unmarried, from his first marriage, and Noel Tata, the current Chairman of Tata Trusts, from the second. He is married to Aloo Mistry, the daughter of the late Pallonji Shapoorji Mistry, and the sister of the late Cyrus Mistry. The Shapoorji Pallonji (SP) group holds a 18.4% stake in Tata Sons, which is an unlisted company.

On September 11, 2026, the RBI rejected the Tata Sons application to de register as a Core Investment Company. It classified Tata Sons as an upper layer NBFC and require it to list.

The biggest beneficiary of such a listing would be the SP group. It’s 18.4 % stake would be conservatively valued at $ 17.6-19.8 b.

The two Tata’s had bequeathed much of their wealth for philanthropic purposes, through a structure of Charitable Trust holding controlling interest in the holding company and ploughing back dividend income from operating companies to the two Trusts, for charity.

This structure presumed that there would be people with character and with long term vision in governance of the Trusts, the holding company, the operating ones as well as in Government. The weakness of the structure has been exposed.

There are other examples of such philanthropic gifting  with different structures. One such is Amar Bose, founder and sole owner of Bose Corporation in USA. Educated at M. I.T. , where he later taught for decades, Amar Bose set up a unit to study audio systems and painstakingly produced products like the Bose Wave Radio and the Noise Cancelling Headset which is crucial for pilots in noisy cockpit, as well as for his passengers. The headset took 11 years to produce for a limited market (pilots) and another 22 years for the public. Impossible to imagine a listed company, pressurized by investors for quarterly reports, to think of.

Dr Bose bequeathed his holding in Bose Corporation as non voting and non saleable shares to M. I. T. entitling it to receive only a steady stream of dividend income whilst leaving the company free to pursue long gestation projects with no shareholder pressure.

One hopes that an alternative solution can be worked out which would help the SP group to exit (they had, after all, funded the Tatas during some difficult years) whilst retaining the philanthropic elements of the highly respected Tata Group.

Last week the BSE Sensex closed at 74294, for a weekly loss of 2221 points.

The US Fed has raised interest rates by 25 basis points. Another similar raise can be expected before year end. Perhaps prompted by the Nov 4 mid term elections.

One hopes that global leaders are struck by a bolt of empathy, or any such, which would help put an end to senseless wars.

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Comments can be emailed to: jmulraj@asiaconverge.com
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