Good morning! In a classic case of the hunter becoming the hunted, Microsoft was hacked by a Russia-backed group known as the Midnight Blizzard. As per TechCrunch, the group hacked into corporate email accounts of senior leadership teams from various departments, including its cybersecurity wing. Interestingly though, the hackers didn’t look at any customer data or corporate information. They just wanted to know what Microsoft knew of them, which is just an enduring testament of honour among thieves. Just making sure we know that you know we know… 

Adarsh Singh and Venkat Ananth also contributed to today’s edition.

The Market Signal* 

Stocks & Economy: Tech stocks rallied to pull up major US indices to close last week at near record levels. The enthusiasm seeped into Asia too. Japan’s Nikkei 225 led an Asian stocks rally on Monday morning. Hong Kong and Shanghai were subdued, however. Investors are awaiting the Bank of Japan’s interest rate decision on Tuesday. 

Bloomberg has listed the US Federal Reserve reversing its course on interest rates too early among the major risk factors for 2024. Economists are expecting the US economy to have slowed in the December quarter. That would encourage the Fed to cut rates. 

Indian markets are closed on Monday for the consecration ceremony of the Ram Temple in Ayodhya. Even banks are shut in the first half of the day. Stock exchanges held a special trading session on Saturday where equities continued their weak show.

BUSINESS OF SPORT 

Grass Is Not Greener In The Desert

 A year after rocking the footballing world with its bucket loads of money, the Saudi football project is unravelling and how. Jordan Henderson, former Liverpool midfielder, has terminated his big-money contract to Al Ettifaq six months after his controversial move. Henderson has joined Ajax now. 

Former Manchester City defender Aymeric Laporte has also claimed that players are "dissatisfied," on grounds of poor working conditions and broken contractual promises.

Mixed reviews: Despite all this, Cristiano Ronaldo thinks otherwise. The superstar claimed that the Saudi League is “not worse than” France’s Ligue 1, a comparison that didn’t sit well with the League. Even Sadio Mane concurs with Ronaldo. Honestly, all of this reminds us of the Chinese Super League’s similar ambitions. 

Coup d'état: Manchester United have poached Omar Berrada from cross-town rivals Manchester City as their new chief executive. This seems to be a direct result of the INEOS investment in the club.

PS: For more insights into and analyses of the business of sport, subscribe to our weekly newsletter, The Playbook.

The Playbook By The Signal A weekly newsletter that goes beyond the headlines and gives you all the necessary signals you need to understand India's sports and gaming industries better.

CONSUMER

It’s A Holy Business

Millions of Indians will celebrate the inauguration of Ayodhya’s Ram Janmabhoomi Mandir today. Crores of rupees are being poured into it: a bookseller has donated a handmade version of the Ramayana worth ₹1.65 lakh (~$2,000). ITC Ltd has lined a temple entryway with 5-foot tall incense sticks made by its brand Mangaldeep Agarbatti. 

Charter flights to Ayodhya are going for tens of thousands of dollars as the rich jostle for an invite to the inauguration. Gold and gold-plated statues of Lord Ram and the (under-construction) temple are out of stock, and large hotel chains are opening properties in the city as its airport and railway station get makeovers. 

💰💰💰: Ayodhya is also seeing a land grab; an investigation by Scroll found local firms allegedly bought farmers’ land for cheap and resold it for big money to developers, including the Adanis and the Lodhas. 

🎧The Delhi High Court is set to rule on a lip-smacking lawsuit: Who invented butter chicken and dal makhani? Also in today’s episode, we break down the economics of the Ram Mandir. Tune in to The Signal Daily on Spotify, Apple Podcasts, Amazon Music, or wherever you listen to podcasts. 

BANKING

The Core Is Shrinking

Investors in HDFC Bank got a rude shock last Wednesday when its shares went into a free fall. 

The sell-off in India’s most valued bank followed after it revealed net interest margin (NIM) at 3.6% was static during the September-December quarter even though the Reserve Bank of India had eased reserve requirements. The stock shed 11% of its value in two days although it partially recouped some losses on Friday. 

Brothers in woe: ICICI Bank, the second biggest by market cap, had it worse measured by NIM. It shrank to 4.43% from 4.53% the previous quarter and 4.65% from the same period the previous year. 

Several banks have reported higher revenue and profit but mainly because they made money in areas other than lending and made less provisions for bad loans. 

The Signal

The weakness in banks’ core business of lending will likely increase overall costs in the economy. The bull run in equities is taking low-cost money away from bank savings and current accounts to other instruments such as mutual funds and shares-linked insurance plans. As a result, they have to pay higher interest rates to attract deposits. On the lending side, nimble-footed shadow banks such as Bajaj Finance, Shriram Finance, and LIC Housing Finance are luring away lucrative retail borrowers from banks. The RBI, worried about the explosive growth in unsecured loans such as credit cards, is already clamping down. A bigger worry is the pool of financially healthy borrowers is not growing fast. 

ARTIFICIAL INTELLIGENCE

Zuck Enters The Fray

While the suits at Davos were busy ruminating about artificial intelligence and its impact, Meta CEO Mark Zuckerberg told The Verge that he was joining the pursuit for artificial general intelligence (AGI), or human-like intelligence. 

OpenAI and Google’s DeepMind have defined AGI as their ultimate goal. Zuckerberg’s approach could involve open-source models that eventually help boost Meta’s bottom line. Not everyone is pleased.

Moolah talks: Cohere, an AI company by ex-Google scientists, is looking for $500 million to $1 billion in fresh capital. Elon Musk is also raising (or maybe not) a similar amount for his AI venture. OpenAI CEO Sam Altman’s chip startup could involve setting up a global network of semiconductor plants. For this, he’s talking to investors from the UAE and Taiwan’s TSMC.

Moving on: Two DeepMind scientists could depart Google’s AI lab to build their Paris-based startup called Holistic. They’re reportedly in talks to raise €200 million (~$254 million) for the venture.

EDUCATION

IITs Have Their Hats In Hand

Struggling with slashed government funding, the IITs are approaching their storied alumni network for donations. They’re eyeing folks such as Nandan Nilekani, who gave his alma mater IIT Bombay ₹315 crore (~$38 million) last year. 

The institutions are using these donations to add facilities, including hostels and labs, offer scholarships to disadvantaged students, and set up centres of excellence.

Kid gloves: Meanwhile, the government is finally taking steps to protect young IIT hopefuls. New guidelines ban coaching centres from admitting students younger than 16 years as the industry’s nerve centre Kota sees another spate of suicides. Centres have also been asked to stop ads with misleading information and false promises of success. 

Penalties range from ₹1 lakh (~$1,200) fine to a revoked licence. 

FYI

Big deal: Tata Sons shelled out a record sum of ₹2,500 crore (~$300 million) for the title sponsorship of the Indian Premier League for the next five years (2024-2028). The company had paid ₹670 crore (~$81 million) for sponsoring the 2022 and 2023 editions.

Konnichiwa, Tsuki: Japan became the fifth country to put a spacecraft on the moon’s surface, with the successful landing of its Smart Lander for Investigating Moon (SLIM). Shortly after landing, however, its solar panels malfunctioned, shutting off power.

Is it over?: Sony Group is likely to formally terminate the $10 billion merger of its Indian unit with Zee Entertainment after the deadline lapsed on January 21.

Breakthrough: After 16 years of negotiations, India and Switzerland reached a deal on a free-trade agreement. The two countries have thrashed out the framework, while details are yet to be finalised.

Tragic: A Russian charter ambulance plane with six passengers on board disappeared (and crashed) in Afghanistan’s Badakhshan province. The plane, a Dassault Falcon 10, was en route from Thailand to Moscow via Uzbekistan.

Me? No, me: Two US federal agencies—the Department of Justice and the Federal Trade Commission are jostling each other over who will probe Microsoft's investment into OpenAI on antitrust grounds, per Politico.

Curtains down: Florida Governor Ron DeSantis ended his bid for the Republican presidential nomination ahead of the New Hampshire primaries. DeSantis has also endorsed Donald Trump for the Republican ticket despite “disagreements.”

THE DAILY DIGIT

$129 billion

The estimated loss in global tourism in 2023 following a dip in Chinese tourists travelling abroad post-pandemic. In 2019, Chinese tourists spent $248 billion, which accounted for 14% of global foreign travel spending. (Bloomberg)

FWIW

Showdown: Turns out Silicon Valley is not just a place for corporate feuds. Presidio Heights, one of the toniest residential addresses in the valley, is engulfed in a fight over pickleball. Karl Peterson, founder of Hotwire.com, has launched a petition against pickleball in a nearby playground, citing a threat to Presidio’s “fragile ecosystem and prestige”. The San Francisco Recreation and Park Department has obliged and has decommissioned 6 pickleball courts. But lovers of the game aren’t willing to sit back, they've started protesting outside the Parks and Rec office and are asking it to reverse the decision. Will it happen? Unlikely, given that houses in Presidio are witnessing a steep decline in valuation and we all know that you don’t mess with money in the US.

Curse of popularity: It isn't uncommon for a Netflix series to set tongues wagging. But these two series are doing it the wrong way. Documentaries  “Unknown: Cave of Bones” about the world’s oldest graveyard, and “Ancient Apocalypse'' about an advanced civilisation gone extinct are facing a backlash from scientists. Archaeologists and anthropologists are banding together to ask Netflix to stop labelling them as documentaries. Why? Because they don't represent a scientific consensus. For example,  in “Unknown: Cave of Bones'' archaeologists argue that the documentary doesn’t provide conclusive evidence to suggest that they were actually burials and not the result of natural processes. Filmmakers on their part have refuted these protests by saying that the documentary isn’t exactly a “peer-reviewed journal of a film”. Fair enough. 

Psych 101: Who says brawn cannot be intellectualised? Just look at the reception to Calvin Klein ads. Known for their eroticism, the ads are, according to this coinage in The New York Times, “beefcake gravitas”. The term represents a conscious attempt to elevate the physical form in order to remove the shame associated with drooling over hot bods. Some have even gone on to claim that the ads hark back to the Renaissance when beautiful bodies were celebrated in high art visualising human perfection. Sounds more like intellectual masturbation to describe an ad selling underwear. The allure of an #inmycalvins is as much the chatter about it as The Bear star Jeremy Allen White himself.