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Apple takes a bite of India
Also in today’s edition: Outward remittances hit an all-time high; Crypto’s rep sinks; Monkeypox is swinging about; Zilingo row gets murkier
Good morning! Dungeons & Dragons is having a moment. It had even earned a bit of bad press because of its cast spells feature. But pop culture gave it a makeover. Read: That ’70s Show, The Big Bang Theory, Community, and The Simpsons. The result? Fans have become simps for the game over the past decade or so.
The Market Signal*
Stocks: Benchmark indices recovered on Friday, mirroring their Asian peers. Asian markets looked up after China's central bank unexpectedly cut its key interest rate. In the last leg of a turbulent earnings season, during which many a tech reputation bit the dust, Zoom, Nvidia and Alibaba will publish their numbers.
Early Asia: The SGX Nifty was trading up 2.89% at 7.30 am India time. The Nikkei 225 was in the green. Hong Kong’s Hang Seng index slumped 0.91%.
The Greenbacks Are Flowing Out
The dollars are flowing out of the country thick and fast. Soon after pandemic curbs were lifted, well-off Indians flew to foreign shores for leisure, studies and business.
Peak outflow: The rush was so much that foreign currency remittances from India rose 55% to almost $20 billion in FY22. The RBI doesn’t ask any questions if forex upto $250,000 per person is taken out of the country. That means a family of four can take out a million dollars a year. Spending on travel more than doubled to nearly $7 billion and crossed $5 billion for education. Money is also spent on managing investments and supporting relatives abroad.
Big jump: RBI data shows remittances began to climb sharply in 2015-16. Since then the outflow has grown leaps and bounds with a fall only in the past two pandemic-stricken years.
Crypto’s Inside Story Makes Regulators Balk
Investigative services firm Argus has found that investors in Gnosis and other coins profited from insider trading. One wallet netted $140,000 in profit after immediately liquidating its Gnosis assets the moment the token was listed on Binance. The same wallet bought at least three other coins shortly before they were listed, only to liquidate them right after they made it to crypto exchanges.
Not buying it: While exchanges maintain that they have stringent policies against such trading, regulators aren’t buying it. SEC chief Gary Gensler likened the crypto boom to the stock boom that preceded the Great Depression of 1929. Christine Lagarde of the European Central Bank said that crypto is “worth nothing” and “based on nothing”.
PS: A South Korean law firm is taking Terraform Labs—which operated the boom-gone-bust Luna token and UST stablecoin—to the cleaners and demanding that founder Do Kwon’s property be seized.
Apple Looks To India
Apple is poring over the atlas to find a manufacturing spot. The Cupertino-based tech giant may drop its location pin in India or Vietnam, both frontrunners for its business plans.
The catalyst? The Covid-19 pandemic. Apple's production has been hit because of China's zero-Covid policies. Foxconn halted production in two factories in China because of a surge in cases. Strict travel restrictions marred executive plans to visit China outposts.
Game on: Call it the Microsoft-Activision Blizzard deal effect. Apple has also held talks with one of the world's largest gaming companies, Electronic Arts, for a possible acquisition. Apple's AR/VR headset is inching closer to reality.
A large chunk of Apple's manufacturing—more than 90% of iPhones, iPads, and MacBooks—comes from China. In its latest earnings call, Apple CEO Tim Cook warned that the country’s Covid-19 restrictions could put an $8 billion dent in revenue for the quarter. China's rocky relationship with the US (compounded by Russia's invasion of Ukraine) could also pose a problem.
China's loss could be India's gain. Up to 6% of the world's iPhones this year could have the Made in India tag. It has a comparative advantage in cheap, abundant labour. Earlier this year, Apple began producing its latest, iPhone 13, in India. It assembles the Airpods Pro, iPads, and HomePod mini devices in Vietnam.
On the flip side, Vietnam Prime Minister Pham Minh Chinh reportedly met Cook to discuss manufacturing in his country. Chinese assemblers may want to conduct business in Vietnam thanks to frosty India-China relations. Who will win?
🎧 Apple is looking to expand its manufacturing centres outside China. India and Vietnam are frontrunners to become the next hub. Check it out!
Monkeypox Goes Global
The WHO reported 92 confirmed cases of monkeypox in 12 countries, including the UK, Portugal, Spain, the US, Canada, and Australia. It has warned that the number could go up globally.
Tell me more: A viral illness with usually mild symptoms, Monkeypox is accompanied by fever and a distinctive bumpy rash within one-three days. Human-to-human interaction is also possible through body fluids, respiratory droplets, and direct contact with lesions. The Congo strain has a mortality rate of 10%, and the West African strain has a 1% fatality rate. A smallpox shot works well to protect against monkeypox since the two viruses are closely related. The risk of monkeypox evolving into a pandemic is low.
Step up: The Union Ministry has called upon the NCDC and ICMR to monitor potential outbreaks. It's also started screening arrivals across international entry points—airports, seaports, and land border crossings. Suspected samples will also be directed to the National Institute of Virology (NIV) in Pune for further investigation.
Zilingo Saga Takes Defining Turn
Amid a crisis that’s fast turning into a defining moment for Zilingo, the Singapore-based fashion start-up fired its co-founder and CEO Ankiti Bose after suspending her for alleged financial irregularities. Bose maintains that she was wrongfully dismissed and accused of financial irregularities as payback for her claim of harassment.
Stasis: Ramesh Bafna, who was roped in as CFO in March to help steady Zilingo after Bose’s suspension, quit within two months. GoTo CEO Andre Soelistyo resigned from Zilingo’s board of directors. Zilingo now finds itself without a CEO too.
Financial woes: The soon-to-be-unicorn is now struggling to pay salaries to its employees. After incurring losses in the previous quarters, the company took several loans to stay afloat. The legal battle against Bose will drain company coffers even further.
🎧 Things are escalating at Zilingo after Ankiti Bose was sacked as CEO. What happened? Tune in.
Change Down Under: Australian Labor Party’s Anthony Albanese defeated incumbent Scott Morrison to become Australia’s newest prime minister.
Creepy Elon: Elon Musk allegedly exposed himself and propositioned a SpaceX flight attendant for sex, according to a Business Insider report.
More layoffs: Telemedicine company mFine has fired 75% of its workforce, totalling 600 employees, as per an Inc42 report.
Space jam: Boeing’s passenger spacecraft Starliner docked itself to the International Space Station for the first time. Indian rocket startup Skyroot too successfully completed its full-duration launch test.
In the fray: E-commerce rivals Amazon and Flipkart are among those eyeing a strategic investment into diagnostic chain Metropolis Healthcare.
Offset: The Indian government is said to be borrowing an extra $13 billion to offset the lack of revenue from cutting fuel taxes.
Hit pause: Saudi Arabia has banned international flights to 16 countries including India as Covid-19 cases surge in the country.
A Big Mac a day...: A Wisconsin man celebrated 50 years of eating a big Big Mac almost every day. Don Gorske has eaten nearly 33,000 burgers since 1972, going Mac-free for just eight days in the past five decades. He's even made it to the Guinness World Records. Talk about commitment.
Nightmare in slumber town: It’s not you, it’s climate change. High nightly temperatures are making it difficult to get a good night’s sleep. The average citizen is losing up to 44 hours of sleep every year, with people in warmer climes experiencing more sleep disturbance. Cue: the heatwave that's currently affecting India and Pakistan.
Out! The UK government is going after gambling sponsorship in football. Premier League clubs may have to get rid of betting company logos from their jerseys by 2023 or 2024. West Ham and Leeds are currently sponsored by gambling companies.
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