Good morning! Is it a bike? Is it an auto? Wait… it’s both! The Economic Times reports that Hero MotoCorp Surge S32 is a category-shifting EV that can transform from a three-wheeler to a two-wheeler in three minutes at the flick of a switch. The scooter has a top speed of 60km/h, while the autorickshaw can go up to half that, but carry 500kg on its flatbed. Some have compared it to the Batmobile. The Dark Knight, whose superpower is that he is rich, may not be amused by his uber cool machine being compared to a shapeshifting tuk tuk.

Adarsh Singh and Dinesh Narayanan also contributed to today’s edition.

The Market Signal 

Stocks & Economy: In its monthly review of the economy, the Indian finance ministry has said that it expects the country to grow at 7% in 2024-25 and even faster after that. The biggest risk to its prospects was geopolitical tensions impacting supply chains and trade. 

Indian equities opened the week in a buoyant mood with the Sensex and Nifty regaining their upward momentum. All eyes are on the interim Budget on February 1. Morning movement of the GIFT Nifty suggested the trend may continue at open today. 

Tensions heightened in West Asia after pressure mounted on US President Joe Biden to retaliate for the attack on its outpost in Jordan which killed three troops.

Asian markets displayed mixed sentiments. Chinese stocks were weighed down after a Hong Kong court ordered that real estate giant Evergrande be wound up. Japanese stocks were up in early trade.

BRANDS

Return Of The Icons

The hottest brand ambassadors in town are yesteryear pinups. Zeenat Aman, Neetu Kapoor, Sharmila Tagore, and Neena Gupta are the latest faces of a growing list of companies. 

Reinvention: All these icons have had a renaissance of sorts, either thanks to streaming platforms or social media. Zeenat Aman, for one, has won over Indian Instagram. 

Great RoI: Aside from a dose of nostalgia, these icons also are easier on the balance sheet. They charge one-fourth of A-listers of today and their engagement numbers are through the roof. Forest Essentials’ recent festive campaign with Zeenat Aman was the company’s most engaged social media campaign. CRED, in particular, has made nostalgia into a shtick, with yesteryear icons from all walks of life like Jackie Shroff and Kumar Sanu appearing in its ads. 

🎧 Actresses from the 1970s and 1980s are the hottest new brand ambassadors in town. Also in today’s edition: the unmaking of Chinese real estate firm Evergrande. Tune in to The Signal Daily on Spotify, Apple Podcasts, Amazon Music, Google Podcasts, or wherever you get your podcasts. 

GEOPOLITICS

A Trepid Union

Threats, capitulation, sabre rattling—it’s all happening in Europe. 

The European Union, which is headed for elections in June, threatened a financial blockade of Hungary if it tried to stop a €50 billion ($54 billion) aid package for Ukraine. Hungarian prime minister Viktor Orban, a vocal critic of Kyiv and supporter of Moscow, had blocked an earlier plan which included aid for Ukraine. Brussels’ threat came ahead of a hurriedly convened meeting of members to clear funding for Kyiv.  

Budapest appears to have buckled under the pressure as Reuters reported that it had agreed to fall in line. 

Meanwhile in Rome: Italian prime minister Georgia Meloni has locked horns with the powerful Agnelli family, which owns Stellantis, formerly Fiat-Chrysler. Meloni is incensed that the French government has a stake in the company while the Italian government has no influence. She said the owners’ choices are not in Italy’s interest.

CONSUMER

By The Buy

FMCG companies are hoping for a leg-up in the upcoming Budget since things aren’t looking good for the sector.

Growth is so flat, even multinational majors such as Nestle and Coca-Cola are yet to formalise appraisal cycles. Hindustan Unilever reported flat growth in the quarter ended December 2023. FMCG sales increased by just 2% by value last year, compared to 7% in 2022. The culprit is a slowdown in rural consumption, in turn triggered by a poor monsoon and inflation. At just 1%, growth in agricultural output in 2023 was the lowest in 4-5 years. Demand for jobs under the rural job guarantee scheme went up sharply this year. Fertiliser and fuel prices have also put pressure on household budgets.

The only FMCG major betting on rural recovery is Colgate-Palmolive, which reported sales growth of 8.1% in December 2023. Even so, oral care consumption is very low in India.

The Signal

Consumption recovery in urban India is better, yet far from rosy.

Festive season and winter sales didn’t meet expectations, and the Kantar India Union Budget Survey 2024 reveals that 57% of Indians in cities are concerned about inflation, up from 27% last year. One in three people surveyed was worried about layoffs. Muted demand everywhere is why employees in the consumer sector are expected to get single-digit pay hikes at best.

All of the above could affect government revenue, crimping headroom for the finance minister in the Budget. Hence the Centre reportedly eyeing a big jobs push.

MEDIA

Not Just Fun And Games

More Americans are starting their mornings comparing Wordle scores and splurging on video games than ever before. Both newsrooms and movie studios have noticed; now they’re betting games will help pad the bottomline. 

All about IP:  As Hogwarts Legacy crosses a record 24 million copies sold, Warner Bros Discovery chief David Zaslav wants more games. The company is launching titles based on HBO’s Game Of Thrones and working more closely with DC. Zaslav has been promising investors profitability lies in fully exploiting the company’s vast IP: gaming is a crucial next step. 

Netflix has also been adapting its biggest hits to games as user engagement soars.

Lock ‘em in: Meanwhile, The New York Times has hit a jackpot with its gaming division; NYT Games, sold in a bundle with news, boosted the firm’s digital subscriptions, Vanity Fair reports. The secret sauce: getting humans to design games with a social focus. 

CORPORATE

Running On Fumes And Bluster

Sony scuttled its proposed merger with Zee Entertainment because the latter did not meet several deal conditions, including financial terms, Reuters reported.

The company cited irremediable breaches and Zee’s lack of any plans to fix them for its withdrawal. 

Blustering on: Zee founder Subhash Chandra vowed to sue Sony for “criminal design”, alleging the Japanese media giant intentionally scuttled the merger despite Zee bending over backwards to accede to all their demands. Sony is demanding $90 million in termination fees. 

Shoring up base: To stave off a hostile takeover, Chandra will also hike the family’s stake in Zee to 5%, then up to 26% without any external funding. But how? Already, the family has pledged shares in group firms Dish TV and Zee Learn. It sold the crown jewel Essel Propack to PE firm Blackstone in 2019 and Siti Networks is in insolvency court,up for sale.

FYI

MBA lite: The London Business School has introduced a short version of its Masters of Business Administration course as the traditional MBA is too expensive and “past its peak”.

Rescue act: Indian Navy warship INS Sumitra rescued an Iranian-flagged fishing vessel hijacked by Somali pirates.

Step up: BYJU’S will raise $200 million from existing investors through a rights issue at a valuation of $225 million, 99% lower than the $22 billion it was valued at in the last funding round. 

A giant falls: A Hong Kong court has ordered Chinese real estate giant Evergrande to be liquidated. The company had more than $300 billion of liabilities and could not reach a settlement with creditors despite months of negotiations. 

Scuttled: Amazon is shelving its $1.45 billion plan to buy vacuum-cleaning robot maker iRobot after the European Union decided to not allow the deal over competition concerns. 

Mother of all fines: A Philadelphia jury has asked German chemical giant Bayer to pay $2.25 billion to a man who says the company’s weedicide Roundup caused him cancer. 

Make us a deal: Irish budget airline Ryanair has offered to buy any unsold 737 MAX 10 jets that Boeing may have on the shelf if the price is right.

THE DAILY DIGIT

1,300 sq ft

The average size of houses offered by builders in 2023 in India. It was 1,050 sq ft five years ago. (The Economic Times) 

FWIW

Crowned for a day: Ever dreamt of living life like a Japanese feudal lord? If yes, you can make that dream come true now. All you have to do is visit the Odawara castle, located 80 km from central Tokyo. You’ll get to wear the daimyo (the official dress of the lords) and even don a katana. The castle and its tourism package is part of the Japanese government’s latest efforts to nudge travellers away from the “golden route” of Tokyo, Kyoto, and Osaka. It hopes to share the spoils of its tourism boom amongst lesser-known but equally impressive towns. Ironic, how a feudal lord's property is a catalyst for sharing said spoils.

Postpartum luxury: For years now, some of the richest countries on the planet have been scratching their heads over a serious question: how to get their populations rising. South Korea, the country with the lowest birth rate, seems to have found an answer. Joriwons are luxurious postpartum recovery centres and come equipped with fresh meals, facials, massages, child-care classes, and private nurses tending to new mothers for 21 days. While the facility does not come cheap (duh?), it’s a massive hit; 8/10 new mothers go to a Joriwon after giving birth. But… is it really a good model in the country of Parasite and Squid Game? 🤷🏻‍♂️

Rest in power: NASA’s Ingenuity helicopter is no longer whirring. The helicopter was a crucial partner in our quest to understand life on Mars. It also held the distinction for being the first aircraft to fly to another world. Made to last for a month, the helicopter ended up flying for three years over the red planet, travelling 17 km in that period. Its last mission was over the ancient river delta in Jezero, where it damaged its wings. So long friend 😥.