Arvind's Newsletter

1.UBS Nears Deal With India Wealth Firm 360 One to Spur Growth

UBS is ramping up its pursuit of India’s booming wealth market. The Swiss banking giant is in advanced talks with Mumbai-based 360 One for a deal that could give it quicker access to the local market through a major independent wealth manager. The transaction could involve a share swap, joint venture or partnership, according to people familiar.

2.No 1 position in Indian two-wheeler market is within sight: Honda

Japan's Honda Motor Co Ltd on Tuesday said it is within reach of achieving the number one position in the Indian two-wheeler market and will introduce a variety of products, including scooters and EVs, to solidify its position.

The company, which parted ways in 2011 with erstwhile partner Hero MotoCorp -- the current market leader, said it will also strive to capture the largest market share in the electric two-wheeler segment in India, where it will begin operating a dedicated electric two-wheeler production plant in 2028.

As per data from the Society of Indian Automobile Manufacturers (SIAM), in the April-December period this fiscal, HMSI has narrowed the gap to Hero MotoCorp with total wholesales of 41,38,346 units to the Indian rival's 43,30,928 units.

3.Why a mysterious increase in GBS cases in Pune has health officials worried, and more

The Maharashtra health department confirmed on Sunday that the number of Guillain-Barré Syndrome (GBS) cases in Pune has surpassed 100, with one suspected death reported in Solapur. Initial reports indicate that the deceased may have contracted the infection in Pune before travelling to Solapur. A total of 28 new cases were reported, bringing the overall count to 101.

Authorities are investigating potential sources of infection, with a focus on water contamination. Tests conducted on water samples have revealed high levels of E. coli bacteria in a well near Khadakwasla Dam, Pune's primary water source. However, it remains uncertain whether the well was in use. Residents have been advised to boil water and ensure food is properly cooked before consumption. Health officials have surveyed 25,578 households in an effort to trace the source of the outbreak.

4.India and China Agree to Resume Direct Flights After Nearly Five Years

It was the latest thaw in relations between the two countries, whose troops were involved in deadly skirmishes high in the Himalayas in 2020.

The rapprochement also included agreements on improving access to journalists from both sides and facilitating pilgrimages to a Hindu holy site in Tibet. They were announced by both sides on Monday, after India’s foreign secretary, Vikram Misri, visited Beijing.

The two nations have made substantial progress in recent months to restore some normalcy in ties. Their relationship had plunged to its worst in decades following an incursion by Chinese soldiers into the Indian side of a disputed border in 2020. The skirmishes left soldiers dead on both sides.

5.DeepSeek changes rules of AI’s great game: Financial Times

“It is hard to talk about 21st-century economic history without discussing the “China shock”. That is the term often used to describe China’s entrance into the global market, a change that brought rich countries an abundance of cheap goods, but left entire industries and workforces mothballed.

DeepSeek may provide a sequel. A little-known Chinese hedge fund has thrown a grenade into the world of artificial intelligence with a large language model that, in effect, matches the market leader, Sam Altman’s OpenAI, at a fraction of the cost. And while OpenAI treats its models’ workings as proprietary, DeepSeek’s R1 wears its technical innards on the outside, making it attractive for developers to use and build on.

Things move faster in the AI age; terrifyingly so. Five of the biggest technology stocks geared to AI — chipmaker Nvidia and so-called hyper-scalers Alphabet, Amazon, Microsoft and Meta Platforms — collectively shed almost $750 bn of market value before US markets opened on Monday. It could be particularly grim for Nvidia if it proves true that DeepSeek won without the use of its shiniest chips.

Investors in tech companies, including Europeans such as chipmaker ASML, and energy companies that investors hoped would get a boost from fuelling data centres, are left wondering whether their investments will go up in smoke. The hyperscalers were due to plough almost $300bn into capital expenditure this year, according to Visible Alpha estimates. Analysts expect that on Wednesday, when they report earnings, Meta and Microsoft will report investment for 2024 totalling $94bn.

In truth, the game is not over. DeepSeek’s actual potential is still unclear, and it has yet to achieve “artificial general intelligence”, the humanlike state that Meta and OpenAI are pursuing. But the rules might have changed. At the very least, DeepSeek may take some of the US giants’ customers. At worst, it has challenged the core belief that more hardware is the key to better AI. That principle has underpinned the market value of Silicon Valley companies as they invest hand over fist.

What is bad for the hyper-scalers could still be a windfall for everyone else. For most business users, having the absolute best model is less important than having one that’s reliable and good enough. Not every driver needs a Ferrari. Advances in reasoning such as R1 could be a big step for “agents” that deal with customers and perform tasks in the workplace. If those are available more cheaply, corporate profitability should rise.

In that sense, this second China shock could resemble the first. It could bring not just destruction but a reshuffling — albeit a painful one for many. Researchers have estimated that for every job lost to the China shock, US households’ purchasing power rose by more than $400,000. The race for AI supremacy is on pause; the great giveaway has begun.

6.DeepSeek, fresh off handing Nvidia the biggest market blow in history, is facing some growing pains. 

The Chinese AI upstart is struggling to keep up with the intense global interest that’s straining its systems so much that the service went down for an hour, forcing the company to limit signups and complain of “large-scale malicious attacks.” The wobbles didn’t deter DeepSeek’s many admirers, who now include OpenAI CEO Sam Altman, Nvidia itself and investors like the head of Australia’s biggest pension fund. In China, where many are no doubt spending at least some of their time off with DeepSeek’s chatbot, it’s being hailed as no less than a national breakthrough that has the potential to rewrite history.

7.How Pakistan’s military is taking over its economy: Financial Times

The country’s armed forces have become intimately involved in everything from canal projects to energy contracts. Investors are increasingly nervous.

The army has always had an outsized role in Pakistani politics. No fewer than four military dictators have ruled the country since independence in 1947 — most recently Pervez Musharraf, who was ejected from power in 2008. Even when civilian governments have been in power, there is widespread evidence that army chiefs have held considerable sway.

Analysts and officials say that the military’s influence over the country’s civilian government is at its highest level since Musharraf’s resignation. But in recent years especially, the tentacles of the military have extended even further, deep into Pakistan’s economy.

A 2021 UN report described military-linked businesses as the “largest conglomerate in Pakistan”. And at the launch of Pakistan’s new five-year economic plan on New Year’s eve, Prime Minister Shehbaz Sharif publicly thanked chief of staff Munir for helping save the country from the brink of default in June 2023.

Critics warn that the military’s ever-expanding economic footprint raises the risk that it will favour its own interests over others. There are also concerns that its involvement in politics and the economy is distracting it from counterterrorism work, increasing societal unrest and deterring foreign investment.

Pakistan also passed legislation criminalising online disinformation, a move critics say is aimed at cracking down on dissent. Under the bill those who disseminate information deemed to be false could be punished with upto 3 years in prison, AFP reported. Islamabad’s military-led government has ramped up its suppression of dissent, including jailing an opposition leader.

8.The mind-altering power of yoga could improve your mental health

Yoga has been found to increase grey matter and alter key networks in the brain. Now there are hopes it could be used to help improve people's mental health.

The practice of yoga dates back over 2,000 years to ancient India. And though today, there are many different types of yoga – from meditative yin yoga to flowing vinyasa – through their use of movement, meditation and breathing exercises, all forms focus on a mind-body connection. And there is growing evidence that yoga may not just have physical benefits but may also be good for your mind too. Some researchers even hope it could be a promising way of helping people with post traumatic stress disorder (PTSD) cope with their symptoms. 

Certainly, research on the physical benefits of yoga is extensive. The first thing anyone who hasn't tried yoga should know is that it can be surprisingly strenuous. It improves strength, flexibility and cardio-respiratory fitness. Studies have found yoga can improve stamina and agility. It can prevent injuries (although it can also be a cause of injuries if not done correctly) and enhance performance in other sports – with advocates including world-class footballers, American footballers and basketball players.