*As of market close

Stocks: Indian benchmark indices recovered from a sluggish start to scale fresh highs for the third straight day. In contrast to yesterday, financial stocks displayed weakness while the broader market resumed its rally. The BSE smallcap index has thus far surged 48% this calendar year.

GOVERNMENT

Retro Tax Is History

The government has introduced a law in Parliament to abolish retrospective taxation, in one stroke ending long-standing disputes with British telecom company Vodafone and Scottish oil explorer Cairn Energy.

In retrospect: Former finance minister Pranab Mukherjee had introduced retrospective taxation in 2012 after the Supreme Court stood by the Vodafone group in a tax dispute born when it bought the telecom company in 2007. The law ensnared Cairn’s 2006 restructuring of ownership as well. Both companies have won international arbitration awards against India.

Going forward: Meanwhile, another dispute involving foreign investment is brewing as India has threatened to fine Walmart-owned e-commerce company Flipkart, its founders, and investor Tiger Global $1.25 billion for alleged violation of investment laws. India has always been touchy about foreign money in the retail sector and organisations close to the ruling dispensation have been vehemently opposing it. Government agencies have been investigating Flipkart and Amazon since 2014.

TECHNOLOGY

Apple to look in US iPhones for child abuse photos

Apple is planning to install software in US iPhones to search for child abuse imagery. Researchers fear it could be the beginning of personal surveillance and potentially a door ajar for governments.

Will call cops: The software, called neuralMatch, will alert reviewers who will contact police if the images are validated. The algorithm will continuously scan the devices and iCloud for images of child abuse, Financial Times reported.

Double edge: Apple has all along maintained that user privacy is paramount but that could begin to crumble with this move. The researchers were supportive of the intention but worried that the tech could be adopted to spot any other images such as of anti-government protests.

STARTUPS

Are You A Company Or A VC?

Even as heavyweight investors such as Tiger Global and SoftBank turn fledgling foals into mighty unicorns overnight, the newly rich startups are turning investors. Companies like Zerodha, Paytm, and Zomato are channeling money into other firms. India has 50 unicorns, 16 born just this year, and they’ve invested in 90 startups.

Startup funds by startups: From Zerodha’s Rainmatter Fintech Technology Fund, created to invest in and incubate fintech startups to Lenskart’s $20 million Lenskart Vision Fund, many biggies in the playing field are setting up their own investment arms to finance allied businesses.

Where’s my salary? However, the copious amounts of cash is driving up salaries. Big IT firms are shelling out fat paychecks to lure talent and leaving a shrunken pool to startups.

The Signal

Unicorns are propping up startups to drive their own growth and to tap into adjacent businesses. They reckon that channeling money into small firms will help grow the ecosystem. The pandemic has given a boost to technology companies and investors are gripped with FOMO on the next big blockbuster.

While the market is awash with capital that cannot be said about talent. India is the world’s third-largest startup market and is behind only the US and China in the number of unicorns. Cash-rich companies are throwing money at good talent and remote work has eliminated the need for visas and approvals, allowing anyone to work from anywhere.

CHINA

Chinese Gaming Companies Are Running Out Of Lives

Chinese state-backed newspaper the Securities Times has urged the government to stop tax breaks to gaming companies because “they’ve become global players that thrive on their own”. 

Cut scene: It could mean no more tax breaks or doles given out by local governments to promote software industries such as gaming. Earlier this week, another state newspaper had called games the “spiritual opium”. The article was pulled down a few hours later. Retail investors quivered and Tencent, the country’s largest gaming company, saw its stock tumble 11%. The company swore to cut gaming time for children.

Cheat codes: If you’ve been picking up on the breadcrumbs, China is using the media to build pressure and public opinion instead of using brute force. There is fear within the Communist Party of China, which is celebrating its centenary this year, that it is losing its grip on its next generation, who will grow up not knowing the true value of being Chinese.

ICYMI

ICYMI

Getting smart with water: It’s not news that the world has a water shortage. The question is, what are we doing about it? This Bloomberg article imagines cities worldwide being water-smart – where water is recycled. Not just rain water, but greywater from toilets and air-conditioners can be reused.

Facebook is your dealer: In Sri Lanka, Facebook groups are the OG weed dealers. In a country where cannabis can get you in trouble, groups on this social media platform are not just connecting seekers and sellers, but they’re also trying to break the stigma around the herb.

Amazon cuts hair: Remember the online dress-up games we would play, changing up a character’s outfit, make-up and hair? Amazon has a new salon where you can use augmented reality to check out your potential look before you go chop-chop. Read this New Yorker article to get an intimate account of one writer’s experience at the new-age salon.

Behind its eyes: Driverless cars are no longer the future. They’re making inroads into our lives with every passing day. However, self-driving cars need the accuracy of a human to navigate obstacles and weather patterns. Human beings from Kenya to Venezuela are working at $1 an hour to provide key data points and train technologies to be ace drivers.

What customer service? Facebook accounts are precious to many, holding memories to bank account details. So, when it gets hacked, it’s a BFD. Yet, Facebook doesn’t have a customer service number you can phone to report a hack. Emails don’t work either. Some users had to get extremely creative in order to get in touch with someone who could fix the issue.

Guarding with his life: PR Sreejesh is an affable, introverted Malayali who has made people fall in love with hockey. One of India’s finest goalkeepers, he was the wall in the Indian goalpost, helping the country win a long-awaited medal in the sport at the 2020 Summer Olympics. From Kizhakkambalam to Tokyo, take a peek into his journey. 

WHAT ELSE MADE THE SIGNAL?

New money: Neo-bank Jupiter has got a fresh round of funding of $45 million from Nubank, Sequoia Capital and Matrix Partners, among others.

Delta update: Melbourne has imposed its sixth lockdown since the pandemic, while Beijing has tightened curbs on account of Covid-19 delta variant. Cases in Tokyo, Hong Kong and Finland are also on the rise. 

Come together: Reliance BP Mobility and Swiggy have joined hands to deploy electric vehicles in the delivery fleet of the latter’s food delivery platform.

Hurray! Indian hockey team beat Germany at the Olympics to win a bronze medal for the country after 41 years.

Golden high: India’s gold imports jumped to the highest in three months in July as retail demand picked up.

One more: There’s yet another unicorn on the block – Mindtickle. After a funding round from SoftBank, the company hit a valuation of $1.2 billion. 

No jab, no entry: US may allow only fully vaccinated foreign visitors when it lifts travel curbs.

That's it from us this week. Have a great weekend.

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