Arvind's Newsletter

1.India bridges valuation gap with global markets, still expensive compared with EM historic averages

India’s valuation gap with global markets has shrunk to its lowest since the pandemic, even though it continues to trade at a premium to other emerging markets by historical standards.

Based on Bloomberg Consensus one-year forward earnings estimates, the MSCI India Index which is the benchmark for most India-dedicated funds, is trading at a multiple of 20.02x compared to 20.39x for the MSCI US, indicating a marginal discount. This differential between India’s P/E multiple and the US stood at 3.36x in December 2022.

Similarly, the P/E differential between MSCI India and the MSCI World Index was 5.21x in December 2022 but has now narrowed to 1.71x. The current differential is more or less in line with the five-year pre-Covid average, when it stood at 0.48 (MSCI India vs. MSCI US) and 1.84 (MSCI India vs. MSCI World) respectively.

2.Smartphone exports beat estimates, cross $21 billion in FY25 so far

Mobile phone exports from India crossed a whopping ₹1.75 trillion ($21 billion) in the first 11 months of 2024-25 (FY25) — higher than the projection of Minister for Electronics and Information Technology Ashwini Vaishnaw, who had estimated exports would touch $20 billion, with one month still to go. 

This figure is 54 per cent higher than smartphone exports in the first 11 months of the previous financial year, according to the India Cellular & Electronics Association. Independent estimates, based on data provided by Apple Inc vendors to state and central governments, put Apple Inc as the largest contributor, accounting for ₹1.25 trillion. iPhone exports made up nearly 70 per cent of total smartphone exports in this period.

3.India’s pilot training pipeline is broken. Crores spent, old aircraft, long wait for jobs

India’s aviation sector is booming, with a standard declaration that there’s never been a better time to be a pilot.  Air passenger traffic doubled in a decade, from 110 million to 220 million, and is projected to hit 400 million by 2029.

But the numbers don’t quite add up. Fleets and runways may be expanding, but becoming a pilot is a costly, bottlenecked process.

Families take on hefty loans, sell ancestral land, and deplete savings to fund training, yet many pilots remain jobless. Some who reach the captain’s seat enjoy cushy salaries and perks, but getting there isn’t always smooth.

4.HSBC and UBS expand India wealth management arms after IPO boom

HSBC and UBS are expanding their wealth management arms in India to compete with local rivals after a listings boom minted a new class of millionaires.

The Swiss bank is looking to acquire shares in one of India’s largest wealth management companies 360 ONE, said two people familiar with the matter, while HSBC announced in January it would nearly double its branches in India with a focus on “cities identified for their growing wealth pools”.

Wealth under management is expected to triple to more than $850bn in the next five years, according to broker and asset manager Motilal Oswal Financial Services. Property consultancy Knight Frank estimates the number of people in India with more than $30mn will rise by half to nearly 20,000 in the five years to 2028, the fastest pace globally and higher than the 28 per cent worldwide average.

5.China unveils plan to ‘vigorously boost’ weak consumption

China has announced a plan to revitalise domestic consumption as President Xi Jinping’s government battles to reverse weak confidence and deflationary pressures in the world’s second-largest economy.

The government will “vigorously boost consumption” and “expand domestic demand in all directions”, according to Xinhua, China’s state news agency, echoing Xi’s exhortation late last year for policymakers to shift towards supporting demand following a sustained push to boost industry.

Analysts said the plan was the “most comprehensive” China has released in more than four decades, underscoring fears among policymakers that the country’s economy may be entering a period of deflation, the South China Morning Post reported. Consumer prices have dropped for each of the past two years, with some forecasting the country could experience its worst deflationary cycle since the 1960s.

6.Daniel Kahneman, the Nobel-winning psychologist, died by assisted suicide in Switzerland last year, a long-time collaborator revealed.

 Kahneman birthed the field of behavioral economics, about how people act in economically irrational ways: He was “the world’s leading authority on decision-making,” wrote Jason Zweig in The Wall Street Journal, and, aged 90, made “the ultimate decision” himself.

His wife had suffered dementia, and a friend told Zweig that Kahneman likely “felt he was falling apart, cognitively and physically.” Others, including Zweig, thought Kahneman made the decision too early, and was in good health. But Kahneman wrote in a final email that “the miseries and indignities of the last years of life are superfluous” and “I ….will die a happy man.”

7.Bill Gates Gives Up on Climate Change

Amajor chapter in climate giving has ended.

Breakthrough Energy, the climate philanthropy organization founded by Bill Gates, is closing its policy and advocacy office and has laid off much of its staff in Washington, D.C., Heatmap News has learned.

The layoffs will effectively gut an organization central to the effort to enact the package of clean energy tax cuts passed during the Biden administration. They will also silence one of the few environmental nonprofits that supported nuclear energy, direct air capture, and other new zero-carbon energy innovations.

The layoffs, first reported by The New York Times, come amid a wider billionaire pullback from donating to climate causes. The president and CEO of the Bezos Earth Fund departed last month, and the fund has yet to name a permanent replacement. Gates had already significantly diminished his climate giving earlier this year, slashing Breakthrough Energy’s grant-making budget last month.

8.BYD Unveils Battery System That Charges EVs in Five Minutes

BYD Co. unveiled a new system for electric cars that the Chinese automaker says will allow them to charge almost as fast as it takes a regular car to refuel.

BYD’s new battery and charging system was capable of providing 470 kilometers (292 miles) of range in 5 minutes in tests on its new Han L sedan, Chairman and founder Wang Chuanfu said Monday.

Being able to charge a car in the time it takes a combustion engine vehicle to pull in and out of a gas station could convince drivers who aren’t willing to make lengthy stops to go electric.

9.Why Elon Musk’s Grok is the internet’s latest fad

Elon Musk’s Grok, an AI assistant developed by his company xAI, has been making headlines with its strikingly candid responses, sparking intense discussions about its unusually human-like political opinions. While some users praise its unfiltered approach, others have raised concerns about abusive responses. 

The generative artificial intelligence platform’s ability to mimic human-like language patterns, including an explicit or aggressive tone, has left many pondering the profound implications for the future of AI as it evolves.

In the most technical terms, Grok is xAI’s large language model (LLM) that is trained on synthetic datasets using machine learning (ML) techniques. Its website describes it as a “cosmic guide", but put simply, Grok is a conversational AI chatbot designed to facilitate both serious and lighthearted discussions on Musk’s social media platform X.

10.If your dog looks like you, there may be a psychological reason

Dogs who resemble their human owners has been observed in research, too. In one study, published in 2015, women with long hair tended to prefer dogs with similarly long ears, and women with short hairstyles preferred prick-eared dogs.

Experts say this psychological phenomenon is a result of us humans preferring pets, people or even objects that resemble ourselves. After all, we are exposed to our own faces daily in the mirror. If we choose a dog that resembles what we see in ourselves, it can be comforting. The dog’s features may feel familiar.