Heartbreak finale for Sony-Zee merger show?
Also in today’s edition: Spite island; Dark matters; China still a draw for Wall St banks; Football’s not the only show
Good morning! What if someone stole your voice? Especially, if voice buys you your daily bread. In a classic case of David Vs Goliath, the Association of Voice Artists is taking on voice cloning softwares powered by generative AI companies. As per The Economic Times, the Association represents 20,000-odd voice artists in the country and are lobbying the government for protection from these companies. Their demands include a licensing agreement for training these softwares as well. While it’s difficult to stop AI’s onslaught, one sure hopes that these artists’ voices are heard.
Adarsh Singh and Venkat Ananth also contributed to today’s edition.
The Market Signal*
Stocks & Economy: Asian stocks rose in early morning trade after a stellar comeback by US equities on Monday. Shanghai was the only laggard. US gains were led by tech stocks, especially Nvidia, which announced new AI products for PCs.
Inflation eased in Japan and now investors are keenly awaiting US data, which will be out later this week.
Meanwhile, Samsung reported a 35% drop in December quarter profit, which was worse than expectations.
Indian equities pulled back on Monday and are expected to recoup some losses on Tuesday. The GIFT Nifty was indicating a muted start to the day. Foreign portfolio investments are at a nine-year record of ₹2.68 lakh crore (~$32.2 billion) and closing in on the all-time high of ₹2.77 lakh crore of 2014-15.
They Said ‘I
Cult TV shows are known for their ‘will they-won’t they’ romantic arc between the protagonists. This one’s ending in a breakup. Sony is on the verge of calling off its very delayed, $10 billion merger with Zee Entertainment, Bloomberg reports. Promoter and CEO Punit Goenka was to lead the merged entity but Sony wanted him gone as he battles a misappropriation probe.
What now? Sony-Zee would have had an insurmountable lead in TV, film production, music, and the streaming business. Separately, they’ll be fending off Reliance-Disney which signed a pre-merger agreement late last year.
Digging your own grave: The Goenkas have long struggled with high debt and miffed investors. A bulk of their shares in various group entities are under pledge. The Sony merger would have brought them much needed cash and allowed them to eventually hike their stake from a mere 4% currently to up to 20%.
Not so sunny-side of life
Who says social media can’t change anything? Just look at Maldives. The island country had to suspend three deputy ministers for a bizarre social media tirade against India’s Prime Minister, Narendra Modi. The ministers in question called Modi a "clown", "terrorist" and "puppet of Israel” on X, where the PM had posted videos and photos of his stay at Lakshadweep islands.
A dangerous mix: The incumbent government came to power on the promise of ending Maldives’ "India first" policy. However, the tourism-dependent nation draws the most visitors from India. The mixing of politics and business will impact it diplomatically and economically. Indian tourists and travel aggregators are already shunning the archipelago.
Meanwhile: Bangladesh national elections attracted a mere 40% turnout after the opposition parties boycotted them on the ground of widespread fraud. Needless to say, incumbent Prime Minister, Sheikh Hasina, won a record fifth term, with a two-thirds majority.
A Taste For The Dark
For Indians travelling abroad, grabbing bags of chocolates at airport duty free shops is almost a ritual. Chocolates in myriad shapes and sizes are the quintessential edible souvenir of a “phoren-returned” Indian. But India is now emerging as a producer of commercial as well as gourmet chocolates.
Newbie: Family-owned snacks and savoury maker Haldiram’s is the latest entrant into the business with the brand Cocobay. The company, which has been expanding its portfolio to include frozen and baked foods, wants to position Cocobay in the premium category.
Oldies: Heavyweights Nestle and Mondelez have also collectively announced investments worth ₹9,000 crore (~$1.08 billion) to build new chocolate factories.
Dark ones: It’s the craft chocolatiers, however, who are planting the Indian flag in the global arena and capturing the taste buds of the local elite.
Fine things take time to mature. India’s wine story, which has aged well, began in the 1990s. Single malts, cheeses, and dark chocolate are maturing faster as the high-spending cohort of epicureans is expanding quickly. Hyderabad-based Manam and Kerala’s Paul and Mike have won numerous global awards for their creations. In the past five years, the dark chocolate market grew from $41 million to $86 million. That is only a tiny sliver of what Mordor Intelligence estimates is India’s overall chocolate market—$2.21 billion in 2024 and expected to grow at a compounded annual rate of 6.64% to $3.05 billion in 2029. But then, only the discerning like it bitter.
The US and Europe are hitting China with sanctions and trade barriers but their banks are quietly setting up offices in the mainland. UBS Group is expanding its wealth and asset management business in that country while Citibank has secured a Chinese brokerage licence and is setting up a wholly owned subsidiary there.
Scaling (fire)walls: Tensions around leaked trade secrets are so high, some US and European banks have stopped briefing their China heads on company strategy altogether. Unable to compete with domestic giants, banks have also abandoned their Chinese units to operate as minor players. Large banks, including Goldman Sachs, meanwhile, wound down their Chinese ops.
Yet, China had 6.2 million millionaires at the end of 2022, and that number is set to grow by 112% in the next five years, according to UBS’ own research. Not an opportunity it would pass up.
BUSINESS OF SPORT
Swift-Ing In The Midfield
Come May 2024, as the La Liga draws to an end, Real Madrid’s iconic Santiago Bernabeu will have its biggest visitor: Taylor Swift, with her Eras’ Tour hitting the Spanish capital. Concerts such as Swift’s could soon become a template, as a host of European football clubs look beyond traditional stadium revenue sources, and cash in on the growing post-pandemic demand for live entertainment.
Why not: Football clubs, as The Financial Times reports, are increasingly upgrading existing or building new stadiums to accommodate other forms of live events. Some, such as Manchester City, are adding dedicated music spaces. These could become pivotal, as income from broadcast rights gradually starts declining or drying up.
The Spurs way: Some, such as Premier League club Tottenham Hotspur, have shown early signs of success. Its £1 billion stadium has already played host to Rihanna concerts, NFL matches and boxing events, resulting in a 50% increase in commercial revenue over five years.
Add to cart: American enterprise security company SentinelOne has acquired two-year-old Indian security startup PingSafe in a deal worth over $100 million (₹831.6 crore), TechCrunch reported.
Only for the big daddies: Blackstone has collected $1.3 billion in its newest fund targeted at wealthy investors. The minimum investment in the fund is $5 million.
Pink slips: Indian e-commerce company Flipkart is likely to trim its workforce by 5-7% as part of a restructuring exercise, per The Economic Times. Flipkart currently has over 22,000 employees.
All clear: India’s aviation regulator, the Directorate General of Civil Aviation, stated that safety checks by three Indian airlines operating Boeing 737 MAX 8 aircraft were “satisfactorily performed.” Incidentally, billionaire Mukesh Ambani owns a Boeing 737 MAX 9 with plugged doors.
Sold out: Indian real estate developer DLF sold over 1,100 luxury apartments of its project in Gurugram worth $865 million (₹7,200 crore in three days). The project, DLF Privana South, is yet to start construction.
Sluggish: Apple’s iPhone is expected to see a double-digit decline in sales in its key Chinese market in 2024, according to Jefferies. Homegrown company Huawei with its Mate 60 device has been eating into Apple’s share among smartphone users.
🏽🏽: Congressional leaders of the Republican and Democratic parties reached an agreement on a $1.6 trillion federal government spending level for 2024. The agreement, when passed into legislation, will avert a government shutdown.
THE DAILY DIGIT
The number of bogus firms detected by the Indian government since May 2023. These firms have been involved in alleged input tax credit evasion of ₹44,015 crore (~$5.3 billion). (Indian Express)
Time capsule: The march of progress is unrelenting but some like to delay its oncoming in their own way. For B. George and the late David Wheeler, it was through creating the ARChive of Contemporary Music (ARC). The New York-based institution keeps and maintains the largest popular music collection in the world. With more than 3 million records stored, the non-profit is governed by a board including director Martin Scorsese and singer Paul Simon. Naturally, this impressive collection needs an impressive home but funds are hard to come by. If only pop-stars had the money…
Fire in the belly: That’s what you feel when you eat a pack of Buldak ramen. Samyang, the company behind the spicy Buldak ramen, is a smash hit in the US. Its packets are flying off the shelf and retailers like Walmart and Costco can’t get enough of them; despite the fact that it’s twice as spicy as Tabasco sauce and costs twice as much as its rivals. Retailers believe that its bright packaging (it comes in pink, purple, and lime green colours) and social media challenges help attract customers. The success of Samyang has brought in much needed vindication for its matriarch Kim Jung-soo as well, who faced an uphill battle in running the company, thanks to Korea’s infamous patriarchal culture.
FAN-ATIC: Growing up, we’ve all had dreams of meeting our favourite stars. But some people don’t just dream, they want to make that happen, even if that means travelling 6,000 km. A group of teenagers from rural Tamil Nadu decided to do just that by taking a train to Vishakhpatnam and then somehow reach Seoul from there on a budget of ₹14,000 (~$168). The goal was to meet their idols, the Korean boyband BTS. Thankfully, they realised the futility of this idea when they reached Chennai and were found by the police, which turned them to the Child Welfare Committee for counselling. What a crazy world!