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Adani’s jumbo-sized airport ambitions
Also in today’s edition: The great Goldman reshuffle; TCS has a moonlighting caveat; Apple dumps YMTC; Truss’ trust deficit
Good morning! Reuters reports that Ye, the cultural icon formerly known as Kanye West, is acquiring Parler. The right-wing social media platform’s parent Parlement Technologies hailed the deal—whose details are yet unknown—as one that’d “change the world”. The development follows Ye’s antisemitic rants on social media, and Twitter’s soon-to-be owner Elon Musk “expressing concerns” over his friend’s now-taken-down tweet.
🎧 Vaccine makers need a new lease of life, and Truss is in trouble. The Signal Daily is available on Spotify, Apple Podcasts, Amazon Music, and Google Podcasts, or wherever you listen to your podcasts.
The Market Signal*
Stocks: After a lacklustre opening, Indian equities rallied to end the day well in the green. The impetus came after the UK scrapped tax cuts, which calmed frayed nerves and boosted markets there, too. Indian corporate earnings added to the positive sentiment. But China delaying the release of its third quarter GDP data, seemingly because of the Party Congress, is raising some concerns.
Early Asia: The Nikkei 225 was up 0.85%, Hang Seng 1.08% and the SGX Nifty 0.23% at 7:30am India time.
Goldman Sachs Hits The Reshuffle Button
One of the world’s largest investment banks is in for one of the biggest rejigs on Wall Street following the business spinoffs of Big Four consultancies EY and Deloitte. The Goldman Sachs Group is forking its units into three divisions.
Elaborate: Goldman is disbanding its loss-making consumer-banking business. It will merge investment banking and trading. The second division will comprise asset and wealth management, while the third will house fintech platforms, transaction banking, lender GreenSky, and the GM and Apple ventures.
Impetus: Goldman has been struggling to keep investors happy. It recently reported a 48% dip in quarterly profits, while Big Tech companies poached its tech talent. The overhaul aims to reduce dependence on trading revenues and focus on steady fee-based businesses.
The reorganisation is a sea change from CEO David Solomon’s prior plans, which included ambitious retail-banking goals.
Tata’s Moonlight Sonata
If you are at TCS and looking for extra gigs, the company itself might offer you some. Interestingly, you may get “rewarded”, not paid for it.
Creating space: TCS is setting up an internal platform for jobs its regular staff can take up. Milind Lakkad, chief of HR, told The Economic Times that the company was trying some proofs of concept for gig work.
Infosys, which does not take kindly to moonlighting either, has a similar programme called Accelerate, where employees can take up internal gigs.
Meanwhile, TCS COO NG Subramaniam separately told the same publication that moonlighting is “unethical, unacceptable” and could take the industry apart.
Pay but not pay: The IT services moonlighting debate speaks to a conundrum where companies are facing a talent crunch but do not want to increase staff costs. TCS’ attrition rates are north of 20%.
Adani Takes Off On Airport Overhaul
India’s richest man has long wanted to build aerotropolises—urban clusters whose economies are centred around airports. The Business Standard now reports that Gautam Adani’s Adani Airport Holdings (AAHL) pitched investors plans to boost revenues in the seven airports it currently operates.
Details: AAHL wants a “top airline”—most likely Indigo or Air India—to move from Mumbai to Navi Mumbai airport, which may be operational by 2024. The intent is to free up slots at the existing airport and turn Mumbai into a transit hub a la Dubai.
AAHL also wants to develop 21 hotels, hospitals, multiplexes, aquariums, Madame Tussaud’s wax museums, Legoland theme parks, cargo hubs, and “rainforest cafes” across its airports. The goal: increase passenger-handling capacity from 31 million to 75 million by 2027 and boost average transaction value by 200%. For the latter, it’s banking on premium brands to throng the commercial spaces.
Adani’s assertion that India’s second-busiest airport is congested has detractors. AAHL’s airport privatisation spree in 2020-2021 also didn’t culminate into better flight movement everywhere; Thiruvananthapuram is one example.
Meanwhile, planning authority CIDCO is still figuring out how people from Mumbai and the outskirts of Pune can travel to and from Navi Mumbai airport. With the metro line between both airports expected to be completed only by 2026, the big question is whether an eye-popping airport in the satellite city will be enough to attract adequate footfalls and business; for a while, anyway.
American Hawks Serve Dips For Chinese Chips
The Biden administration’s sweeping restrictions against China’s homegrown tech sector are bearing fruit. Apple, which had engaged Yangtze Memory Technologies Co (YMTC) since 2018 for cheap memory chips, will no longer source the component from the state-owned company. It’s a blow to YMTC, for whom a partnership with Apple would’ve helped it compete with market leaders Micron (US), Kioxia (Japan), and Samsung (South Korea).
Heads may roll: US citizens, residents, and companies are also barred from supporting Chinese chip development without a licence. This means 43 American executives across 16 listed Chinese chipmakers will have to choose between their jobs and citizenships. YMTC has over a dozen employees in the US.
Making do: Since American talent will be near-impossible to come by, YMTC is wooing Chinese graduates with plum offers, including the option to buy homes below market value.
Hunt For Safe Harbour
There are two leadership positions in the world today that nobody is envious about—the Prime Minister of Britain and the president of the Indian National Congress (INC).
Saving Liz Truss: UK’s Chancellor of the Exchequer Jeremy Hunt was to present his economic plan on October 31. With the prime minister wilting faster than lettuce, Hunt on Monday reversed the tax cuts and slashed the energy package that promised succour to households. It calmed the markets but renewed fears of cost of living rising further.
If Truss somehow survives this, she might even stay at the wheel for much longer than people are giving her a chance.
A captain for INC: The last time there was a contest for the Congress president’s post, Sonia Gandhi trounced Jitendra Prasada 7,542 to 94. Many see Mallikarjun Kharge as the Gandhi family’s proxy and Shashi Tharoor as the face-saving foil. The result will be out Wednesday.
Under a cloud: An investigation by the BBC has revealed a widespread culture of harassment and bullying in broadcaster Al Jazeera’s newsroom.
Add to cart: Hindustan Unilever is reportedly looking to acquire majority stakes in plant-based nutrition company Wellbeing Nutrition and organic food company Conscious Food.
Not the 🧅: Onion prices have increased by 60-80% in the last week. The retail price of onions has shot up to ₹40 ($0.5) per kg.
Binge on: Direct-to-home company Tata Play has entered the OTT video space with an aggregated offering called Tata Play Binge.
No unlock: Doubling down on its zero-Covid policy, China has locked down one of the districts near Zhengzhou, an iPhone manufacturing hub. The district is said to have a population of nearly one million.
Reform or else…: Disney has issued a warning to French authorities that its future releases could potentially skip cinemas and go directly to streaming because of the country’s “windowing” distribution system.
THE DAILY DIGIT
The estimated losses of the insurance industry in the wake of Hurricane Ian, which swept through the US states of Florida and South Carolina. (Financial Times)
Revenue jab: Illness is a business. This isn’t us endorsing conspiracies against Big Pharma, but an indisputable fact. Moderna, Pfizer, and BioNTech—which reaped bumper profits in 2021—are struggling with waning demand for Covid vaccines. The trio are now diverting resources into new drug development. Pity Sanofi/GSK and Novavax, which are seeking approvals just as vaccine sales are estimated to plummet by a fifth next year.
PG only: Jamaica’s airwaves will no longer have songs glorifying drugs and crime. The ban was enforced by the Jamaican Broadcasting Commission to curb “moral disengagement” in a country with one of the highest crime rates in the Americas. Jamaican musicians, however, aren’t amused. While one highlighted that people can still access such tracks on streaming platforms, another pointed out that no one needs radio today anyway ¯\_(ツ)_/¯
Total Eclipse of the heart: American social media is in mourning after the death of 10-year-old bullmastiff-black lab mix Eclipse. The dog, who had an owner-run Facebook account, became a celebrity in Seattle after videos of her riding the local bus surfaced in 2015. Eclipse would regularly board the bus in front of her house and alight at the dog park. RIP, sweet girl.
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