$6 trillion logjam ☝️
Google's generosity, auto revival, and Trump down with COVID.
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Market summary: 📊
With the markets closed on Friday, India has ended the week on a positive note. US markets however turned on their heads on Friday after the President broke out worrisome news... read on.
US:
S&P 500 - down 0.96%
Nasdaq 100 - down 2.83%
COVID trumps the Donald… ☝️
US President Donald Trump and his wife Melania contracted the COVID-19 virus — a shot in the face of the administration that continually downplayed the severity and contagious nature of the virus, often refusing to wear masks and practice social distancing. With the US elections set for 32 days from now — this takes an entirely different turn.
Trump and his family along with White House staff have begun a quarantine process. (We couldn’t help but wonder — imagine this exact scenario playing out 30 years ago in the middle of the soviet Cold War, wherein the President of the United States mysteriously catches a foreign originated “virus”… things would’ve taken a very different turn overnight!).
Wear a mask peeps! Onwards...
Surprise auto comeback 🚗
India’s auto industry was dealt a severe blow when the lockdowns went into effect and quick recovery almost seemed unimaginable. However, things are looking quite optimistic as data for last month shows surprising strength in consumer demand returning. Citizens saving their salaries, while cutting down other discretionary expenses during lockdowns, is perhaps helping.
The country's biggest automakers saw double digit growth in their sales for the month of September — Maruti (up 30.8%), Hyundai (up 23.6%), Hero (up 16.11%), and Tata (up 37%) — all beating expectations. Auto-dealers are in fact quite hopeful here on out and are stocking up very aggressively in hopes of a record holiday-sales season.
While we’re on the subject 📈 —
Thanks to easing lockdowns, the nation's GST collections reached the highest levels in the last 6 months, touching ₹95,480 crore in GST for August (collected in the month of Sep), marking a 10% month-over-month growth and a 4% increase in collections vs. a year ago.
These collections also include back-taxes paid by small businesses from a few months ago, as the government had given an extension and relief in some cases to not pile onto existing cash problems of small businesses. Major industrial belts particularly, are reporting healthy billings, which is looked at as a positive sign of revival.
Bottomline: in aggregate, there are ample signs that India is making a stronger comeback than imagined previously — perhaps also why the government has been frugal with incentives and doles. Regardless, a bounce back is a win for everyone.
Capital talks 💰
Just getting this out of the way — the boys over at Reliance Retail have scooped up another ₹6,247.5 crore from Abu-Dhabi’s sovereign wealth fund, the Mubadala Investment Company, in exchange for a 1.4% stake. Regulators will be reviewing the transaction, obviously, but expect that to be a cake walk, again, obviously. 🙄Like many of you, we’re numb to these happenings by now. Aage badho…
How them dance videos coming?🎵 —
ShareChat has signed a global licensing deal with Saregama, bringing Saregama’s vast music catalog onto ShareChat and Moj platforms, to be used for the noble cause of making some more wacky dance videos. Anyway, Saregama’s catalogue contains music across genres in over 18 languages, and the deal solidifies ShareChat’s focus on winning the regional internet wars particularly. Looks like they’re putting the $40 million raised recently to work already.
For music owners like Saregama though, it will be interesting to see how this ends as they increasingly risk losing customer relationships to digital first platforms.
Finally, in a quiet raise this week 👏 —
SquadStack, a software player that helps sales teams leverage insights more effectively, has scooped up $5 million in a Series A led by Chiratae Ventures and Blume Ventures. The company sells a broad suite of independent platforms, aimed at optimizing various points of distress in sales processes and has so far made inroads with biggies including Zomato, Walmart, Upstox and others.
Funds will go towards product growth and to scale tech teams in India as well as in the US.
Just give them what they want 📰
In a move that caught everyone off-guard, Google will deploy $1 billion over the next 3 years to buy content from major news publishers, for display through Google News Showcase service, starting in Brazil and Germany soon.
News publishers will be responsible to provide blurbs of news as well as some paywalled articles to Google for free. Alphabet has already signed agreements with nearly 200 publications. Belgium, India, the Netherlands are on the launch charts as well and the product will be available via Google News on Android devices and eventually on Apple devices as well.
Why this generosity — well, one of the reasons could be to squelch revolt. Alphabet was taking attack on too many fronts — you can’t be dealing with disgruntled developers pissed over Play Store policies, while at the same time keeping regulators in countless jurisdictions unalarmed, while struggling to stand on the good side of the press. Something consequential had to be done and Pichai chose to speak with his checkbook.
Anyway, struggling news empires could definitely use this relief to pull in some guaranteed cash flow, and so far the reception appears to be quite positive.
$6 trillion logjam 📉
Tokyo’s stock exchange went down, halting trading for an entire day for the first time in its history after a data device malfunctioned and a backup device failed to kick in, making data distribution to investors impossible.
Essentially, one of the data storage devices, part of the maze that relays order information to traders, detected a memory error, which triggered a backup drive to take over. The back device was inaccessible as well — an oddity in fact that threw off press to believe this was a cyberattack. Those allegations however have been refuted by the exchange officials. Here’s a thorough account of everything that conspired.
Anyway, investors were obviously livid and critics from all across the aisle used the opportunity to berate the increasingly complex financial plumbing of global markets. Funnily, the existing Arrowhead systems which enable the Tokyo stock exchange’s trading, were actually installed to much fanfare as an alternative to a notoriously problematic system the Japanese had in the 2000s. You’d think they can make exchanges as smooth as the Toyotas...
Tweet of the day —
Dheeraj Pandey landed in the US with $900 in his pockets and two bags of luggage — and in under two years to would go on to create over $5 billion in shareholder wealth. Hope this makes a good weekend read for you!
What else are we snackin’ 🍿
🤔 How many we got - In a crazy statistic, more than 19k employees of Amazon tested positive for the coronavirus by now, about 1.44% of its total workforce. This was brought to light by labor advocates who have criticized the e commerce giant for its weak COVID-19 response.
🏛️ Bring them in again - The US senate will again subpoena the CEOs of Facebook, Google and Twitter to give testimony on an investigation around privacy law, media consolidation and other topics around unhindered influence of tech and internet giants. Expect nothing more than a show.
🙌 Kiranji making waves - A US biopharmaceutical firm, Puretech, has appointed Kiran Mazumdar Shaw to its board of directors, recognizing her extensive experience in biotherapeutics and strategic leadership. Quite an honor.
🙁 Retail apocalypse continues - H&M is finally giving into the prolonged pandemic, with plans to shut 350 out of its 5k stores in 2021 worldwide, while doubling down on digital channels to chase growth.
🛒 Sorry merchants - eCommerce giant Amazon is planning to sell an affordable designer wear, River, in India ahead of the peak festive season sales in India. The move is expected to help Amazon fashion expand its value offerings. If you thought “digitizing” India was about saving merchants you’re wrong.
Hit that 💚 if you liked today’s issue.
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