Why Ukraine matters
Also in today’s edition: Crypto ads to come with PSA; Global brands swoop in; Kyiv declares emergency; Call of Duty is on a break
Good morning! Air India’s second lease of life has hit a temporary snag. Incoming CEO Ilker Ayci may have turned around Turkish Airlines, but his proximity to Turkish president Recep Tayyip Erdogan, a close Pakistan ally, is currying no favours with the Indian government, considering India-Turkey ties are frosty at best. As per a report in The Economic Times, the Tata Group is now scurrying for a Plan B to deal with the white elephant in the room.
In this episode, we understand the ongoing conflict between Ukraine and Russia. It's beginning to feel like a scenario from the Cold War. In other developments, India's advertising authority has issued guidelines for crypto and NFT advertisements. Listen in to The Signal Daily.
The Market Signal*
Stocks: Ongoing geopolitical tensions continued to influence domestic markets. Benchmark indices stayed in the red. Consumer durables and banking stocks gained. IT, financial, and auto stocks tumbled. Wall Street's major indexes followed the downward trend.
Your Crypto Ad Has An Asterisk
Ever since crypto went mainstream, crypto ads followed. Bollywood stars towed. While there’s been a hue and cry over lack of regulation, there's finally a cop on the beat.
The Advertising Standards Council of India (ASCI), India's advertising watchdog, has entered the picture with guidelines around crypto firms and their marketing messaging.
Tl;dr: Among other norms, ASCI has mandated advertisements related to crypto products exchanges or virtual digital assets to carry the disclaimer: “Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions.” across print, video and audio streams. Ads need to do away with words such as 'currency', 'securities', 'custodian' and 'depositories' terms generally associated with regulated ones.
They had it coming: Singapore has enforced it; the UK is mulling over it. In July last year, the Delhi High Court asked crypto exchanges to bring guidelines on television ads. It comes at a good time. Crypto cybercrimes are becoming commonplace in India.
Global Brands Make A Beeline
It's been two years in the making. Things are finally looking up for the retail sector. Birkenstock, Victoria's Secret, Pianoforte Group, and H&M are dropping their pins across India. Victoria’s Secret will debut its brick-and-mortar store in Delhi; Birkenstock will step up with 25 stores across the country. This also spells good news for malls that are now doing away with concessions.
High spirits: India is finally looking beyond whiskey. Ready-to-drink (RTD) beverages have found a place in our hearts and bars. It probably explains why RTD mixes by Bombay Sapphire and Jack Daniel's are bringing their concoctions to India. Home-grown RTDs are also making quick strides. Psst: the tax levies help.
For some not-so-great news ahead of summer, Putin could make your beer expensive. Ukraine is a major barley exporter. The ongoing geopolitical crisis could impact global supplies.
Cold War 2.0 and India’s Diplomatic Dilemma
While Ukraine declared an emergency, multiple countries imposed sanctions on Russia following Vladimir Putin’s strongarming against the former. In defiance of the Russian president’s demand—that military alliance NATO withdraw from eastern Europe and not admit Ukraine as a member—US counterpart Joe Biden “redistributed” troops to Russia’s neighbours Lithuania, Latvia, and Estonia.
Germany’s halting of the Nord Stream 2 pipeline is a blow to both, Russia and European consumers. Energy prices may double. Meanwhile, Ukrainians shuttling between two sparring governments are struggling with everyday life.
The Ukraine crisis is reigniting Cold War embers. The Soviet-led Warsaw Pact—whose signatories once included the eastern European countries now embroiled in tensions with Russia—was a response to US-led NATO. Cuba’s support for Russia today also harks to the 1962 Cuban Missile Crisis, when Soviet Russia deployed missiles in Cuba in response to the US doing the same in Turkey and Italy.
NATO expanded to eastern Europe even after the Soviet Union collapsed. Putin responded by exerting influence in Georgia, Belarus, and Ukraine.
India is precariously placed in this geopolitical standoff. It gets nearly half its arms from Russia. Thanks to longstanding India-Russia relations, Putin even dismissed China’s concerns about bilateral defence deals. But he’s growing closer to China to counter the West, while India is part of the Quad front to counter China. Its Quad allies US, Australia, and Japan have announced sanctions against Russia; India is left to take a page out of the deft diplomacy manual.
The Next Target of Chinese Regulators
After a brief lull, it appears China’s dreaded tech regulators are back. While many economies in the West are still having a debate on internet censorship and cybersecurity, China plans to regulate AI from March 1, 2021 in what it calls an attempt to protect people’s rights and interests.
What is clear is that when it comes to regulating AI, China wants to be the first country to take the leap.
Tell me more: This will restrict the algorithms that use personal information to offer users different prices for the same service or product, control search results and content. The regulation is targeted towards ride-hailing apps, e-commerce, streaming platforms and social media.
Don’t get hooked: Tech firms are already toeing the line. ByteDance, the company behind Douyin, has been showing a mandatory five-second video asking users to log off if they spend a lot of time on the app.
Game Paused For Now
Bad news fans, there will be no mainline Call of Duty game next year, for the first time in two decades. But to be clear, the Call of Duty: Modern Warfare sequel by Infinity Ward will still release later this year as planned.
Why? Some executives thought that releasing a new version every alternative year would be better. This comes just a month after Microsoft announced its acquisition of Call of Duty owner Activision Blizzard. However, the deal hasn’t cleared regulatory approval yet and Activision Blizzard is continuing to operate as an independent entity for the time being.
In China: The gaming industry is facing a huge layoff risk. Chinese regulator body has frozen the licensing for seven months now which is raising a fear in the gaming market.
Action packed: The BharatPe saga escalated with the firing of company controller Madhuri Jain. Ashneer Grover also questioned the company’s governance review, only to be rebutted by board chairman Rajnish Kumar. Madhuri is now washing dirty linen in public
Fundraise alert: IvyCap Ventures has raised $214 million in the first raise of its third fund from a clutch of institutional investors, while Valley-based investors Naval Ravikant and Tim Ferris have backed a $45 million investment vehicle to enable Indian founders to invest in early-stage startups.
Add to cart: The Good Glamm Group will likely acquire video commerce company Bulbul in a cash and stock deal, with Bulbul founder Sachin Bhatia joining its Good Creator Company as chief executive.
Creator-friendly: LinkedIn will bring its creator accelerator programme to India, which is its second-largest market. Gen Z icon Ankur Warikoo has been roped in as a mentor. Globally, LinkedIn will also launch a podcast network.
Down: There's no $200 billion dollar club at the moment. Tesla Inc. chief Elon Musk, the last one to exceed the threshold, is $13.3 billion poorer as Tesla shares fell in the stocks market.
Pink slip: Bookkeeping solutions provider OkCredit has laid off employees as part of its restructuring. OkCredit will now focus on its fintech plans.
Coin toss: Trading on OpenSea has decreased by as much as 37% following a phishing attack on the world’s largest NFT marketplace.
Room service: Amazon's Astro gained a lot of traction in November last year. There are finally some reviews. Astro can do what Alexa can't—fetch you a pint of beer. But it has no arms: someone still needs to place the beer in it. A camera-fitted robot on wheels, Astro was touted to be a home-security device. But it came with a glitch.
Stranded: The shipping industry can't catch a break. There’s a surge in Omicron cases across cargo ships, causing worries that this may disrupt the already fragile supply chain. A rise in Omicron cases means halting for quarantine, which varies across ports and countries. China's zero-Covid approach is adding to the problem.
(Not) cool as a cucumber: A Chinese delicacy is becoming an inflection point in the geopolitical battle for Sri Lanka. The mushrooming of sea cucumber farms in Tamil-dominated northern Sri Lanka—where India exerts more influence than China—has the island nation’s neighbour worried. These farms export sea cucumbers to China and even work with Chinese hatcheries. But for Sri Lanka’s fishermen, it’s simply a case of aligning with whoever steps up to help.
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