At Ambit we spend a lot of time reading articles that are not directly relevant to Indian stocks. However, since the Indian economy is now umbilically linked to its global counterparts, the articles that we come across have relevance for Indian stocks and the Indian economy. In that context, this report contains the ten most interesting pieces that we read this week.
Here are the ten most interesting pieces that we read over the week ended August 12, 2016.
1) Do Bollywood writers fail the very India that feeds them? [Source: Mumbai Mirror]
P Sainath – a veteran journalist and founder of The People's Archive of Rural India - delivered a keynote address at the inaugural session of the fourth Indian Screenwriters Conference. In his address he shares his concerns around the failure of writers in confronting the multiple realities of our country. He laments how right from farmer suicides in Maharashtra to water woes in Latur, the media has been guilty of not covering the topics under corporate pressure and urges the writers to start highlighting the burning issues facing our society that have the potential to tear up the very fabric of what makes us what we are today.
2) Xi’s China: Smothering dissent [Source: Financial Times]
This article describes the increasingly difficult circumstances faced by the Chinese civil society over the past 12 months as China’s most powerful party and state leader since Deng Xiaoping, Mr Xi has presided over a crackdown without precedent since the repression that followed the 1989 Tiananmen Square massacre. The NGOs, journalists, activists, researchers who aim to highlight free speech as a necessary tenet of existence in any country are at a much higher risk. The end result of suppression is that wealthy Chinese are not only divesting their assets but also sending their children abroad.
3) Revenge of the powerless voter [Source: Indian Express]
An interesting piece that describes how an index called the 'justice index' is abe to predict the winner in the next elections much more accurately than all the variables that have been used traditionally at election time. It provides the Bihar and Lok Sabha elections as the proof and makes a prediction that according to this index, as far as the UP elections are concerned, the BSP will gain seats in 2017.
4) The two things killing your ability to focus [Source: HBR]
According to this piece, two major challenges are destroying our ability to focus. First, we increasingly are overwhelmed with distractions flying at us from various connected devices. Second, we rely excessively on meetings as the default form of interaction with other people at work and spend less time staying focused on truly meaningful activity. The author recommends five daily practices to help us remain focused and effective at work.
5) India’s Air Traffic Controller shortage alarms aviation pros [Source: Bloomberg]
This article highlights how India is facing a challenge in finding qualified flight controllers and how the situation is likely to only worsen going forward. The issue facing the government is that most air traffic controllers shun employment with the state-run Airports Authority of India, where starting monthly salaries can be as low as $250, and choose monetarily rewarding jobs with private airlines.
6) Chinese tech firms forced to choose market: Home or Everywhere else [Source: NY Times]
This piece highlights how Chinese web start-ups are having to face a choice — either create something that caters to China’s digital population or focus on the rest of the globe. The difficulties that China’s internet companies face in expanding their success abroad are epitomized by WeChat, the messaging app owned by Tencent. Within China, WeChat can be used to do almost everything, like pay bills, hail a taxi, book a doctor’s appointment, share photos and chat. Yet its ability to do that is dependent on other Chinese internet services that are limited outside the country. That leaves WeChat outside China as an app that people mostly use to chat and share photos — not that different from WhatsApp and Messenger, which are both owned by Facebook. Baidu and Alibaba have apps that similarly offer a range of capabilities, yet are less useful outside China.
7) An economic myth of Olympic proportions [Source: Project Syndicate]
This article aims to dispel the myth that hosting the Olympic Games is an economic boon for the chosen city and country. It says that in reality, overbidding for the games leads to costs comfortably exceed revenues by $10 billion or more. Further the notion that short-term deficit will turn into long-term gain, because tourism, foreign investment, and trade will grow, is also misplaced and provides example of London Olympics where tourism actually fell by 5%.
8) We are building the Vanguard of India [Source: Financial Times]
This piece describes an interview with Mr Ajit Dayal who set up Quantum Advisors, which oversees $2.5bn in assets, in early 1990s and aims to build it into a low cost, Vanguard like fund in India. He describes his ordeal in the early days with distributors asking for kick backs and how he believes the country needs more transparency around fund fees.
9) Beijing regulator warns groups not to misuse the word ‘bank’? [Source: thenews.com]
As per this piece, several fake outfits posing as accredited financial institutions have been exposed by the Chinese regulator in the past year. Among them is a China Construction Bank operating out of a convenience store in a village in Shandong province and a company whose name included the words “Goldman Sachs” operating in Shenzhen. In February more than 20 people were arrested for their involvement in Ezubao, a “complete Ponzi scheme”, that allegedly took more than Rmb50bn ($7.6bn) from investors, China’s biggest-ever case of financial fraud.
10) Food startup Hampton Creek Ran undercover project to buy own products [Source: Bloomberg]
This piece describes an interesting story of how Josh Tetrick persuaded investors to plow $90 million into his vegan food startup Hampton Creek Inc. What he didnt reveal was that the startup undertook a large-scale operation to buy back its own mayo, which made the product appear more popular than it really was. In addition to buying up hundreds of jars of the product across the U.S., contractors were told to call store managers pretending they were customers and ask about Just Mayo. Strong demand for a product typically prompts retailers to order more and stock it in additional stores.
- Saurabh Mukherjea is CEO (Institutional Equities) and Prashant Mittal is Analyst (Strategy and Derivatives) at Ambit Capital Pvt Ltd. Views expressed are personal.