Also in today’s edition: The Epstein list; Coming soon: Jio mutual funds; TikTok's US ambition; Against oil odds
Good morning! A New Year brings an opportunity to start afresh and the Indian scientific community seems to concur with that. As per a report in The Indian Express, the community’s marquee event, Indian Science Congress, has been postponed indefinitely. The announcement marks a break from tradition, with January 3rd being its scheduled date for more than a century. A turf war between the Indian Science Congress Association and the Department of Science and Technology is supposedly the reason behind this delay. Honestly, sounds just like the old times.
Adarsh Singh also contributed to today’s edition.
The Market Signal
Stocks & Economy: Apple continued to lead the tech stocks rout after another Wall Street analyst downgraded the stock. People Sandler and Co. followed Barclays in cutting the world’s most valuable company’s rating, citing piled up handset inventories.
Forecasters see a January drop in share prices to be ominous. A popular theory says: “as goes January, so goes the year.”
While one set of data released Thursday showed an unexpected pick-up in private sector hiring in December, a clear picture will emerge after full employment data for the month is released on Friday.
Asian indices recovered tentatively in morning trade after starting the year in losses. The recovery started in India on Thursday, in fact. Companies are expected to report robust performance in the December quarter. The GIFT Nifty was hinting at a flat opening on Friday.
RETAIL & HOSPITALITY
Holy Of Holies
It’s not just Ayodhya that’s prepping for the January 22 consecration of the Ram Janmabhoomi temple. Indian FMCG and hospitality majors want to strike gold in what could become one of the biggest pilgrimage destinations in the country.
Bisleri and Parle are setting up greenfield plants and increasing distribution centres, respectively, in the city. Quick service chains McDonald’s and Burger Singh are expanding locally too. Companies and industry bodies reckon Ayodhya’s visiting or floating population will boom eight- to tenfold. For context: nearly 24 million tourists visited Ayodhya in 2022, per the UP Tourism Department.
Caveat: If you fancy meat and booze, you may have to travel to Ayodhya’s outskirts. The 5 km radius around the temple is a vegetarian and alcohol-free zone.
Nobody Wants To Be On This List…
…not least former heads of state, bankers, celebrities, and academics. But that’s how hotshot financier-paedophile-sex trafficker Jeffrey Epstein rolled before his conviction and eventual prison suicide in 2019. A US district judge recently ordered that sealed court filings (spanning Epstein’s ‘black book’, private airplane logs, etc.) containing the names of friends, clients, associates, acquaintances, and even those he just name-dropped to lure underage girls, be made public. This tranche is being gradually released and includes names we knew of earlier: former US presidents Bill Clinton and Donald Trump, Prince Andrew, Duke Of York, and Bill Gates. Then there are the surprises.
Who?: Michael Jackson. Google co-founder Sergey Brin. Peter Thiel. Private equity giant Leon Black. Noam Chomsky. Stephen Hawking. Naomi Campbell. Former Israel PM Ehud Barak. Former Norway PM Thorbjorn Jagland. 2024 US Presidential candidate Robert Kennedy Jr. CIA director William Burns.
And that’s just the beginning.
A Whale Is Coming To The Pond
Jio Financial Services, whose parent Reliance Industries played a major role in popularising the equity share as an investment instrument for small investors, has applied for a licence to begin a mutual fund (MF) business.
Big fish: While Jio has the parentage of India’s largest conglomerate by market cap, its partner BlackRock is the world’s biggest asset manager with nearly $10 trillion under management as of last year.
Crowded pond: There are currently about 45 asset managers operating in India, as per the Association of Mutual Funds in India (Amfi). Discount broking firm Zerodha, financial services group Bajaj Finserv, and investor Samir Arora’s Helios started MFs in 2023. More are lining up. The sector, however, is dominated by SBI, ICICI Prudential, and HDFC Mutual Funds, which control 40% of the total assets managed by the industry.
Amfi data shows the industry’s assets under management nearly doubled to ~₹50 lakh crore (~$600 billion) as of November 2023 from ~₹25 lakh crore in November 2019. Yet, MFs have less than 10% (pdf) of the household savings pie, which theoretically means vast territory remains unconquered. Households invested 6.1% of their savings in MFs in FY23, which was a jump from 1.3% in FY21. Rising digital penetration and falling returns from other instruments have driven investors towards MFs. Retail investors’ newfound love for equity and swelling wealth, at least on paper, in turn, are drawing many players in the financial services sector towards the business.
TikTok’s Tenfold Target
The groundswell against it notwithstanding, TikTok has an ambitious plan to ramp up its e-commerce business in the US. Bloomberg reports that it has set a 2024 merchandise goal of $17.5 billion for TikTok Shop—10x what it’s making in the country right now.
ByteDance-owned TikTok’s e-commerce arm will compete with other Chinese-owned platforms Temu and Shein, which have been doing great business in the States. TikTok’s USP is its combination of social media stickiness and impulse shopping in ways competitors are yet to crack. Amazon’s tryst with livestream shopping (Amazon Live) isn’t a craze in its home country yet, though it's better placed overall despite TikTok poaching its sellers.
TikTok Shop in the US will also start charging higher commissions, though its cut is still less than Amazon’s. Speaking of, Amazon merchants suspended from the platform are increasingly relying on “e-commerce-focused lawyers” to have their businesses reinstated.
Big Oil Vs. Bigger Oil
There is little doubt that we’ll see tussles increasing over green energy transition. While the transition itself is fledgling, a complex rivalry is shaping up between the two big US energy companies, ExxonMobil and Chevron, and the world’s preeminent oil cartel, Opec+, dominated by Saudi Arabia and Russia.
“The great rebalancing”: The two US companies recently went out shopping, spending $124 billion to consolidate oil production in the western hemisphere. Consolidation is continuing with energy company APA striking a $4.5 billion deal to buy Callon Petroleum.
The US and Canada produced more oil and gas than all of West Asia combined in 2023. This enormous capacity gives them the power to blunt any aggressive moves by Opec+ to dial up or down production to protect global prices.
Such competition is good for heavy energy importers such as India as it will likely bring stability to prices.
🎧 The great rebalancing of oil. Also in today’s edition: cancer-detecting bras and Mickey Mouse’s murderous rage. Listen to The Signal Daily on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts.
App crazy: Led by gaming and social media, Indians downloaded nearly 26 billion apps on their mobile phones in 2023, about two billion less than in 2022.
Dealbreaker? In a legal opinion that could potentially end the proposed Zee-Sony merger, former chief justice of India UU Lalit has said that the deal can go ahead only if Punit Goenka heads the combined entity.
New key: Windows keyboards will now feature a button for Microsoft’s AI assistant, Copilot, a first since the company’s epoch-defining operating system got its own key in 1994.
Banished: Carrefour has stopped stocking PepsiCo products on its shelves because they are too expensive. The French retailer said it will not sell Pepsi, Lay’s, 7Up, etc.
Old is good: The US government will pay Microchip Technology $162 million to make old-gen semiconductors used in some gadgets and vehicles.
No more targeting: Google Chrome will be free of tracking cookies by the end of 2024. It will begin with 1% of Chrome browser users starting Thursday.
BFD: Demand for big guns has surged so much that the US Army and British weapons maker BAE Systems will restart production of M777 howitzers, heavily used by Ukraine.
THE DAILY DIGIT
Or ~$3.1 billion. The amount of subsidy the government is planning for FAME-III, the third phase of Faster Adoption and Manufacturing of Electric Vehicles. (Business Standard)
Paperback’s revenge: Bookworms, rejoice. Your dusty old books might be a treasure trove and it’s time to make use of them. Collectors are willing to pay top dollar for rare and antiquarian books. As per an analysis by Rare Book Hub, 2022 saw book and paper auction sales of $1.06 billion. But old age alone ≠ value. Like other valuables, the demand for old books is fueled by buyers' interest in a particular copy; the reasons for which can be as varied as scholarly interest, favourite authors or an interesting history of ownership.
Game’s up: Remember Tetris? That old game where you have to fit falling pieces of different shaped blocks into solid pieces. For years, that game was part of everyone's lives but no one could ever beat it. That seems to have changed now. Willis Gibson, a 13-year-old from Oklahoma, has become the first one to do so. Wills reached level 157 of the game, after which the game crashed. More than the achievement though, it’s the game’s enduring appeal that has caught the people’s attention. The game attracts players across ages to its World Championships, with players streaming techniques for mastering the game. Now that’s something!
PR love: Mad Men fans, this one’s for you. Pop Tarts, one of America’s favourite cereals, has become the toast of the town (no pun intended) thanks to a viral sponsorship. Kellanova, the company behind Pop Tarts, sponsored its first college football game wherein its toaster-pastry mascot jumped into a giant makeshift toaster. Subsequently, the ‘toaster’ ejected actual pop-tarts only to be wolfed down by a crowd of players on live TV. The stunt has become an instant hit online and Kellanova’s marketing chief gives us a behind-the-scenes peek in this interview. Time to channel your inner Don Draper.