SoftBank going into a hard shell

Good morning! The government told Parliament that ISRO is actively helping with managing orbital trash. The junk is largely from defunct satellites and rocket stages that fall off. When India blasted a low earth satellite with a sat-killer missile, it left 400 pieces of detritus, Nasa had estimated. Nasa is tracking 27,000 pieces of space junk but there are many more small pieces. They might be tiny but travel at incredible speeds and can be as damaging to rockets and satellites as bird hits are to aeroplanes. Orbital debris is to space what plastic is to earth. We really hope launchers pick up after their rockets and satellites.

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The Market Signal*

Economy & Stocks: Several Indian banks raised their base interest rates after the RBI hiked the rate at which it lends money to them. It will impact home loan EMIs and borrowing costs for companies. Bank stocks gained.

The BJP’s emphatic win in Gujarat elections but the Congress wresting Himachal Pradesh from the BJP infused some volatility in sentiment too.

Not everyone is crying over Russia’s Ukraine invasion. Swiss commodities trader Trafigura is giving away $1.7 billion to its traders and shareholders after doubling its profits trading oil and petroleum products, the Financial Times reports. 

Early Asia: The SGX Nifty climbed +0.36% from its previous close at 7.30 am India time. The Hang Seng Index (+0.58%) and Nikkei 225 (+1.22%) were swimming in the green.

CRYPTOCURRENCIES

Crushed By Force

The Financial Intelligence Unit (FIU) has recommended the closure of 3,300 crypto accounts that it claims were being used for drug trafficking, money laundering and other illegal activities. Three digital asset management companies are also under the scanner.

Where are these accounts? On exchanges in India and abroad, where the FIU may not be able to reach. India’s membership in the Egmont group, a consortium of financial intelligence units of 166 countries, could help. WazirX last week said it had blocked over 700 accounts between April and September.

The FIU is said to have spotted cryptocurrencies worth ₹28,000 crore being exchanged in drug deals between 2019 and 2021.

Now where: India has consistently argued that cryptocurrencies need globally coordinated regulation but it stopped short of banning them. However, it imposed a 30% tax on digital assets. The Enforcement Directorate has also been sweeping exchanges for breadcrumbs.

SURVEY

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IPO

Aged Vintner Goes To Market

The folks who founded Sula Vineyards will likely have a reason to clink glasses this weekend when they partially cash out from the 26-year-old company.

Sula’s promoters and early investors are selling 31% of their ownership in a public offer.

Context: India is a whiskey-drinking nation but a handful of Maharashtrian winemakers beginning with Chateau Indage in 1982 has helped the country develop a taste for bon vin. Although less than 1% of Indians—half of them prefer Sula— drink wine, the market is expected to grow by $274 million by 2026.

Emerging context: Expect India to be a battleground for intense competition. A free trade agreement with Australia has just become operational. Trade pacts with Europe and the US are in the works. As these producing regions eager to capture new markets target India, Indian winemakers will find their margins squeezed.

🎧 India's largest wine producer Sula Vineyards is going public. The Signal Daily is available on Spotify, Apple Podcasts, Amazon Music, and Google Podcasts, or wherever you listen to your podcasts.

PRIVATE EQUITY

The Quiet Moves Of Masayoshi Son

SoftBank founder, Masayoshi Son, has raised his stake in the Japanese investment firm to 34%. Bloomberg reports Son is inching closer to an ownership level where he can take the beleaguered firm private.

Trouble: The US SEC is investigating if SoftBank-investee messaging service IRL misled investors and overstated its business performance. IRL could be the latest in a series of dud investments SoftBank appears to have made.

More trouble: Credit Suisse is closer to beginning a lawsuit against SoftBank to recover $440 million it lost when Greensill Capital collapsed. The bank claims SoftBank colluded with Greensill in an investment restructuring that caused the loss to Credit Suisse.

The Signal

Ever since SoftBank reported $27 billion in losses in FY22, its flamboyant CEO has been under pressure. As the chief of a private company far from the hawkish gaze of shareholders and regulators, Son, popularly known as Masa, will have more freedom to manoeuvre investments. He himself owes SoftBank $4.7 billion and his personal wealth is entwined with the fund and its valuation. The spectacular implosion of crypto exchange FTX and earlier WeWork are trainwrecks of Masa’s investment-by-instinct approach which is now hardwired into the company. SoftBank Vision Fund partner, Serena Dayal, who took the investment call on IRL has reportedly hinted that she had never made a faster bet than that.

SoftBank might see some respite in its Chinese investments as the economy looks up but its Indian investee’s are largely clutching at straws.

PAYMENTS

RBI Lets UPI Flex

UPI has made EMI (equated monthly instalments) payment easy for those who want to pay from their own money instead of borrowing through credit cards or buy now-pay later service.

The single-block-and-multiple-debit feature will also help buying equities through a new Sebi mechanism, Application Supported By Blocked Amount (ASBA).

What: Jargon aside, what it means is a user can block amounts—an escrow if you will—in their account for a specific purpose, say pay EMIs for a mobile phone. Although the whole amount will be blocked, only the instalment amount will be released when the date falls due. It helps avoid defaults because of insufficient funds.

For stocks: With money set aside in the account. ASBA will help seamless payments between brokers and investors, helping the move towards next-day settlement.

If credit cards felt the heat of UPI until now, this feature will likely threaten debit cards.

ENTERTAINMENT

Wonder Woman 3 Isn’t Sparking Joy At DC Studios

Two months after James Gunn and Peter Safran were signed on to steady Warner Bros. Discovery’s DC Studios, the Gal Gadot starrer is on hold. This time around, it’s not about the money. The new heads aren't happy with writer Patty Jenkins’ screenplay as they figure out how to realign DC’s superheroes.

But, but: Gal Gadot may just slip into the uniform since it all boils down to Jenkins' treatment of the new film. Also to be noted, Wonder Woman 3 was given a go-ahead under the previous leadership.

Up in the air?: Jason Momoa's Aquaman and the Lost Kingdom could also come to a halt for similar reasons. Dwayne Johnson’s Black Adam sequel and Henry Cavill’s Man of Steel 2 remain in limbo.

This could also signal the end of Snyderverse as we know it.

Skip: Even as rival streamers Apple TV+ and Amazon Prime Video doubled down on live professional sports, Netflix isn't ready to dip its toes as yet. Netflix previously had a “never say never” approach to advertising but look how that turned out.

🎧 Will Wonder Woman 3 get a second chance? New DC heads James Gunn and Peter Safran could shake up the DC Universe. The Signal Daily is available on Spotify, Apple Podcasts, Amazon Music, and Google Podcasts, or wherever you listen to your podcasts.

FYI

Free speech: Meta has barred its employees from discussing contentious topics such as gun control, abortion rights, and vaccines, as part of its freshly-released “community engagement expectations.”

Mixed bag: The ruling Bharatiya Janata Party swept the Gujarat assembly elections, winning the state for a record seventh term in a row, while also bagging the record number of seats. The Congress, however, pulled one back winning in Himachal Pradesh, sneaking past the half-way mark with a close margin.

Under the hammer: Hindustan Unilever has acquired a 51% equity stake in plant-based supplement brand Oziva.

Encryption wars: Apple announced an optional, expanded end-to-end encryption system to user data stored on iCloud, including photos, notes, contacts etc. Predictably, the FBI is not too pleased.

Not so fast, buster: Fintech unicorn BharatPe has filed a criminal case against its former managing director Ashneer Grover, his wife and family members for forgery and embezzlement, and claimed Rs 88 crore in damages.

Hacked & sold: Data, including user logins, digital fingerprints and cookies stolen from 6 lakh Indians have been sold on the bot market, according to a NordVPN study. Globally, hacked data of five million people have been put up for sale.

No-go?: The US antitrust regulator FTC is suing Microsoft's $69 billion acquisition of video game developer Activision Blizzard alleging the takeover would suppress competition.

THE DAILY DIGIT

$9 billion

The Pentagon has awarded tech giants Google, Oracle, Amazon, and Microsoft a cloud contract to build its computing network through 2028. (Reuters)

FWIW

Earcleaning: Dyson, the maker of those fancy vacuum cleaners, is coming for your ear in 2023. Quite literally. The company will launch its headphones called The Dyson Zone, which will not just offer noise cancellation, but also double up as air purifiers. They come with a “detachable front bar”, which when attached, looks more like a mask. If that sounds great and rather futuristic, wait till we tell you the price: $949, which is nearly double the price of Apple’s premium Airpods Max.

Anime-ting selfies: Meitu, the Chinese “beauty” smartphone maker is winning over Japan. Not with the phone but its free beauty app which has surged to the top of Japan’s app stores: #1 on Apple and #2 on Android. The reason? A feature allowing users to take a selfie and anime-fy, with AI playing second fiddle. Not just that, the app also lets users add animations to their avatar. If you’ve got your Sakura or Naruto-face on, we’d like to know more.

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