Good morning. Spies in movies are highly trained chameleons who can jump off skyscrapers, drive in style and shoot like Olympians. In the espionage handbook, however, the skilled spy is a super-networker hiding in plain sight. Sky News quoted MI5 director general Ken McKallum as saying that foreign spies are using LinkedIn on an “industrial scale” to infiltrate governments. Are you open to work?

The Market Signal*

Stocks: Benchmark indices slumped after rising for two days. US Fed Chair Jerome Powell’s resolve to keep raising rates until he tames inflation kept the mood in the market gloomy. FMCG major ITC's net profit rose to ₹4,195 crore. Shares of Bharti Airtel plunged a day after Q4 results.

Early Asia: The SGX Nifty was down 0.01%. Nikkei 225 dropped to almost 2.50% while Hang Seng Index lingered in the red.

DATA

Abort The Tracking Apps

After the leak of the US Supreme Court majority’s draft opinion eviscerating Roe v. Wade, Twitter was buzzing with warnings to delete period tracking apps from the smartphones. And they weren’t wrong. Data commerce platforms are selling information about users using tracking apps such as Clue.

Is it concerning? Yes. If the Supreme Court overturns Roe v. Wade, it would restrict abortion in coming months. And data from platforms such as Narrative, that sell data to third parties, can be used against women who employ these period tracking apps. These apps are often not covered under the Health Insurance Portability and Accountability Act, which protects personal data of people.

Past imperfect: Femtech apps gained notoriety in 2019 after it was revealed that the data was being sold to Facebook or Google to feed up targeted advertisements. With specific information about the user’s moods and sex lives, related advertisements then popped up in their feed.

WORK

Tech Rout Hits Payrolls 

The ed-tech boom is sputtering. Two weeks after laying off 200 employees, ed-tech start-up Vedantu has laid off 424 employees—about 7%—of the company in an attempt to conserve its capital in the current environment. In the last few weeks, Unacademy axed about 1,000 employees and ed-tech startup Lido Learning folded in February. 

Still watching? Netflix has retrenched 150 employees to arrest “slowing revenue growth” a month after the streaming giant announced that it will scale down its spending for the next two years. It also eliminated about 70 part-time jobs in its animation studio and 26 workers associated with its fan-focussed website, Tadum. Netflix has also cancelled several animated projects to curb spending. 

Boy, bye: A former machine learning director at Apple has joined Google's DeepMind citing the iPhone maker’s stringent return-to-office policy. Three more executives have left the Twitter HQ amid Elon Musk’s $44 billion raid.

Russia hits Surat: About 2.5 lakh diamond workers have been sent on leave.

FINANCE

Who Is Buying Luxe Homes In Mumbai?

Foreign financiers are laughing all the way to the bank as corporate consolidation in India is picking up pace. 

Bankers Inc: Goldman Sachs will put in $350 million into PharmEasy to refinance the company’s acquisition of Thyrocare. The Adani Group’s $10 billion acquisition of Holcim’s cement assets is bankrolled by Barclays, Standard Chartered and Deutsche Bank. 

Big shoppers: Conglomerates such as Reliance have been buying small and big companies and brands by the dozen. Even the Tatas are on an acquisition spree. Then there are others. Bloomberg reported that Walmart-backed PhonePe is buying two wealth management companies, WealthDesk and OpenQ for $75 million. 

The Signal

FY22 has been one of the best years for M&A financiers and this year promises to be even better. While some deals such as PhonePe’s might look small compared to Adani’s mega purchase, all of it adds up. Acquisition financing tripled in FY22 to $32.5 billion for a total of 321 transactions that year. 

The biggest winners in corporate deals in India are foreign banks and the behind-the-scenes blokes at investment banks. The losers are Indian banks which are barred by the RBI from M&A financing. Although some try to sneak in through their foreign branches at a later stage for refinancing such as in the Adani-Holcim deal, what they get are crumbs compared to the foreign banks’ cake. It also lands the dealmakers, whom the writer Tom Wolfe called “Masters of the Universe”, fat bonuses. Therein also lies a clue to why sales of luxury homes in Mumbai are booming.

🎧 Foreign banks and investment bankers are making hay on Indian shores as Indian counterparts wait and watch. Why? Hop in.

CHINA

Hurtling Towards Disaster

As he gunned for China’s overbearing tech companies, President Xi Jinping remarked that he wanted the country’s digital economy to be “big but not strong, and fast but not superior”. 

Got your back: The zealous regulatory campaign that Xi unleashed has bruised the tech sector so badly that officials are now scrambling to apply balm. Vice-Premier Liu has pledged support to the platform economy and the private economy. 

Crisis spreads: Local governments, which are indebted to the tune of $8 trillion, are diverting funds meant to fight poverty to Covid-19 testing. The testing mandate could cost up to $250 billion, or 9% of the country’s tax revenue. 

Professionals are fleeing the country even as new Covid-19 flare-ups raise the risks of harsher lockdowns. So are investors in Chinese bonds. Businesses will suffer more. Shanghai did not sell a single car in April.

TRAVEL

It Pinches To Fly

Revenge travel has made a comeback. Air travellers are taking to the skies, and calling dibs on premium seats.

Flying high: It is good news for the aviation industry which hit an air pocket in the pandemic. Alaska Airlines, American and Delta had a good March. Emirates cut its losses to $1.1 billion as fliers returned. But Asia is still facing headwinds. China is busy trying to keep Covid-19 in check. Japan, a tourist-favourite, announced a "test tourism" only on Tuesday.

Up in the air: Back home, domestic airfares have risen and could go higher on surging jet fuel prices. Rail and road could be the only alternative even though petrol and diesel prices are also at record highs. 

FYI

Funding secured?: Singapore-based Jungle Ventures has closed a $600 million fund to back early-stage startups in SouthEast Asia (SEA) and India. Sequoia, meanwhile, postponed the close of its $2.8 billion India and SEA fund amid the Zilingo probe.

Taxi to take off: Jet Airways is likely to get its air operators’ permit this week, three years after it was grounded. IndiGo has a change of guard with Pieter Elbers replacing the retiring Ronojoy Dutta as chief executive officer.

Looking East: Saudi Arabia’s Public Investment Fund has acquired a 5.01% stake in game maker Nintendo, also its third such stake in a Japanese gaming company. Nintendo’s local rival Sony, meanwhile, is looking to the metaverse. a16z has also launched a $600 million gaming fund. 

💰 in: B2B agritech company Ninjacart has also raised fresh capital from STIC and Mainstreet Digital. D2C companies WoW Skin Science (beauty) and BlissClub (activewear) also closed their respective funding rounds.

Squeezing lemons: Coca-Cola India will extend its brand Limca into the hydrating sports drinks category, with a hope of scaling its reach beyond in-home consumption.

Taking sides: NATO allies Finland and Sweden have formally applied to be its members, ending decades of neutrality.

Finger in every pie: Billionaire Gautam Adani-led Adani Enterprises will enter the healthcare segment by setting up medical and diagnostic facilities.

FWIW

Frankenstein’s plate: Ever heard the Latin maxim De gustibus non est disputandum? It means “in matters of taste, there can be no disputes”. But what would you say to chocolate-crusted pie topped with Oreos, popcorn chicken and calamari? We’re ngl: It’s our dispute that Pizza Hut Taiwan’s new offering is a food abomination. It will compete with German Burger King that has a cake-and-beef burger on the menu. All this while divine-ice cream maker K Rustom is being evicted from its 80-year-old roost in Mumbai’s bay area.

Rising UFO encounters: For the first time in more than half a century, US congress and lawmakers have held their first public hearing on unidentified aerial phenomena, with high-ranking Pentagon officials claiming around 400 UFO sightings have been reported from military personnel—a major increase from the 144 reported in the previous year. But no evidence of aliens.

Arigato Gozaimasu: A 24-year-old Japanese man blew an entire $360,000 Covid-19 relief fund at online casinos after receiving the cash in error. While he was only supposed to receive $774 as part of his financial aid package, the town accidentally wired him the entire amount intended to be distributed to all 463 low-income households in the town of Abu.  

🎧 Taiwan's Pizza Hut has every topping that shouldn't belong on that carb heaven. Think Oreos, fried calamari and chicken. Germany's Burger King isn't too far behind. Tune in for some food for thought.

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