Good morning! Fans of quirky websites might be disappointed with this one. According to Reuters, the Afghan government has suspended domains registered through a Paris-based company, Gandi. The company was responsible for handling Afghanistan’s country domain, “.af”, which needless to say was a goldmine. Websites like broke.af, sexy.af, and awesome.af proliferated the internet. The government says Gandi owes it $17,000. Gandi on its part has blamed international sanctions behind this delay. Now that’s sad.af.

Adarsh Singh and Soumya Gupta also contributed to today’s edition.

The Market Signal 

Stocks & Economy: Battered Chinese equities are now available at such mouth-watering valuations that Wall Street asset managers are lining up products for investors to buy the historic lows. China has slashed a benchmark interest rate that is used as reference for mortgage loans in an effort to prop up the property market. Here is a Bloomberg timeline of steps China has now taken to revive its economy this year so far.   

Commercial property loans in the US are, meanwhile, turning bad. The tide has swollen so much that top US banks’ reserves are under water. 

Wary anticipation of Nvidia’s fourth-quarter performance, due to be revealed on Wednesday, punctured swelling stock valuations in the US and Asia. The GIFT Nifty indicates a muted opening for Indian equities as well. 

The Malaysian ringgit fell to its lowest level against the US dollar since 1998, when the currency’s rout had triggered the Asian currency crisis. 

E-COMMERCE 

Woe Be The IPO

The prospect of an IPO is the dream scenario for any startup employee. For the earliest ones at Flipkart, it’s become a nightmare. Several senior vice presidents and other top-level executives are leaving the company as group CEO Kalyan Krishnamurthy cuts costs to whip Flipkart into shape for a potential IPO in the next two years, The Economic Times reports.

Already, the company laid off 5-7% of its employees last month for poor performance, while existing workers struggle with increased pressure and no salary hikes. 

Extinguished: Among those leaving are reportedly employees who worked at Flipkart for over a decade. Some were fired, although others left voluntarily. Flipkart is planning a $1 billion fundraise, largely from parent firm Walmart, as it aims for profitability before going public. 

Rival Swiggy also laid off hundreds of employees last month as it cut costs to prepare for an IPO later this year. 

VENTURE CAPITAL

Chips Are Falling Into Place For Son

All SoftBank’s Masayoshi Son needed was a shot in the arm. Son is now ready to pour money into Indian artificial intelligence startups and will write cheques ranging from $75 million to $125 million. 

Arm boost: SoftBank got a boost last September when mobile phone circuitry designer Arm, which is now also designing them for artificial intelligence chips, sold shares to the public at a valuation of over $54 billion.That has now more than doubled, and Arm’s sales helped SoftBank post its first profit in two years in the last three months of 2023. 

India portfolio: The Japanese fund has investments in 22 Indian companies and the portfolio is currently valued at around $14 billion. It is also helping its investee companies to build connections and business with AI companies in Silicon Valley. 

 ENVIRONMENT

Defining The Obvious

What is a forest? Is it just green cover—including orchards and plantations—as contentiously defined in the India State of Forest Report? Is it so only if recognised under the even more contentious Forest Conservation Amendment Act, 2023 (FCAA)? Or should we go by the dictionary definition, as adjudged in the 1996 ruling in TN Godavarman Thirumulpad vs. Union Of India & Ors?

Why split hairs?: Because the Supreme Court (SC) has ruled that the accurate definition of a forest is the dictionary one. Aka it upheld the 1996 ruling. It’s an interim order but significant, nonetheless.

Significant how?: Read on.

The Signal

The 2023 FCAA is controversial because it only recognises forests mentioned in government records in 1980 and after. Meaning states and union territories can’t classify forests even as per the dictionary definition, if they aren’t recorded before 1980. The amended law also allows forest land within 100 km of India’s borders to be used for “strategic and security purposes” without the Centre’s approval. That translates to green cover and lands owned by forest-dwelling communities in ecologically-sensitive regions to be appropriated as deemed fit.

But now, the SC has directed states and union territories to present their lists of identified forest lands, in accordance with the 1996 judgement, by March 31.

The interim order could delay ambitious infra projects such as the Great Nicobar Development Project, which reportedly felled over 800,000 trees and denotified tribal settlements, and oil exploration and mining projects, including Adani’s blocks in Hasdeo Arand, Chhattisgarh.

M&A

In Debt We Trust

Debt drives America, and demand for more credit is driving consolidation in the lending industry. Capital One and Discover, the fourth-largest and the sixth-largest US credit card issuers, respectively, are merging to create a consumer loan behemoth that could threaten the duopoly of Visa and Mastercard. The merged company will be bigger than JPMorgan and Citigroup by credit card loan volume. 

Subprime to prime: Discover is popular with immigrant and student communities because of its zero fees and opportunity to build their credit score. Its payments network can help Capital One reduce its dependence on Visa and Mastercard. Capital One, a favourite of subprime consumers, is trying to upsell to premium users. 

US credit card debt has now touched $1.13 trillion, over $50 billion piling up in the December 2023 quarter, a New York Federal Reserve report said. 

🎧 Capital One and Discover Financial join forces to form a credit card juggernaut in the US. Also in today’s episode: what is a forest, anyway? Tune in to The Signal Daily on Spotify, Apple Podcasts, Google Podcasts, Amazon Music or wherever you listen to podcasts.

INVESTMENT

Terms And Conditions Apply

China brokered peace between Saudi Arabia and Iran. Yet, caveats apply in Riyadh’s relationship with Beijing. The Financial Times reports that the kingdom is welcoming investments from Chinese companies… with fine print.

Background: West Asia has positioned itself as a hub for artificial intelligence, but in doing so, it has to pick between the US and China as the two superpowers slug it out for dominance in trade and emerging technologies. Saudi Arabia is amenable to Chinese investments—a reprieve for Beijing considering its oversupply problem—as long as the entities involved transfer skills and other know-how to local companies via joint ventures.

The likes of Alibaba, autonomous driving tech company Pony.ai, and state-owned AI behemoth SenseTime are investing millions in the petrostate. It’s likely that Saudi Arabia, flush with Chinese renminbi after a local currency swap with Beijing for oil trade, is looking to do something with that currency pile.

FYI

Mystery of the missing millions: Market regulator Sebi has “found a hole” of over $240 million in the books of Zee Entertainment, according to Bloomberg; the development comes a day after The Economic Times claimed that Zee and the Sony Group were in talks to revive their almost-dead merger.

Power play: India is seeking investments worth about $26 billion in nuclear power—from the likes of Reliance Industries, Adani Power, Vedanta, and Tata Power—marking the first time the country is inviting private firms to invest in the sector, Reuters reports. 

Outflow: Indians took nearly $25 billion out of the country to pay for overseas stay, education and other expenses under the RBI’s Liberalised Remittance Scheme in April-December 2023, 20% more than the same period the previous year. 

Slipping away: A group of shareholders of edtech startup BYJU’S parent Think & Learn has called for an extraordinary general meeting to oust its founder Byju Raveendran, his wife, and brother from the company. 

🤝: Billionaire Sajjan Jindal-led JSW group is in talks with German carmaker Volkswagen to source technology and components for its Odisha electric vehicle project. 

Corporate militias: Chinese companies are setting up small armies—People’s Armed Forces Department—which are believed to be a precaution against social instability. 

Respite: Easing food prices helped cool retail price inflation for farm and rural workers in January, government data showed. They clocked 7.52% and 7.37% respectively compared to 7.71% and 7.46% in December 2023.  

THE DAILY DIGIT

184%

The increase in global demand for Turkish shows between 2020 and 2023, according to Parrot Analytics. Turkish shows pipped Korean shows, which saw a demand surge of 74% in the same period. (The Economist) 

FWIW

Gaining momentum: Biotech’s obsession with CRISPR is getting challenged by a new technology. RNA-editing is the new face of cutting-edge in biotech after its successful results in COVID vaccines, with human trials beginning to take speed. The technology avoids any permanent changes and has no unintended changes (aka side-effects) at the genome level as opposed to CRISPR, which makes it much safer. Aside from genetic diseases, RNA-editing is also being used in hepatocellular carcinoma, the most common type of liver cancer. Gives major Brave New World vibes without the satire. 

Imitation game: It isn’t uncommon for fashion companies to steal take inspiration from local designs of poor countries. Lêkê, the national shoes of Ivory Coast, are the inspiration behind Gucci’s jelly shoes. Away from the ramp though, the shoe is a common man’s footwear known for its practicality, lightweight and affordability. It’s particularly popular among the footballers in Ivory Coast who prefer it over sneakers. Such is its appeal that many professionals still wear it during practice. Just like their football team, the shoe’s going places.

Top Gun: Passengers taking off from the Washington and Baltimore region were in for the ride of a lifetime. The region recorded wind speeds of 265 mph, making it the second-highest speed ever recorded, as per data from USA’s National Weather Service. For context, the speeds helped three flights operating in the region break the speed of sound and thus reach their destination way before time. However, this does not mean that they broke the sound barrier - the flights were just being helped by the surrounding high winds. Either way, that’s the closest we’re ever gonna get to feeling like Tom Cruise.