Arvind's Newsletter

1.In a first, India ranks number one globally in IPO volume in 2024

With 337 issues ( mainline and SME), India has risen to the top in global IPO volumes for the first time, storming ahead of the US which had 183 issues and listing more than two and half times as many as Europe.

That's one of the key findings in the report ' EY Global IPO Trends 2024'.

Armed with strong economic growth and an investor-friendly environment, India has emerged as one of the major beneficiaries in an era of shifting global economic and geopolitical dynamics, the report adds. At $19.9 billion, IPO volumes in 2024 were the highest in over two decades for India.

The US reclaimed the top spot globally by IPO proceeds ( $32.8 billion) in 2024, for the first time since the 2021 peak, following two subdued years. It also continued to be the leading IPO destination for international listings with 101 deals accounting for 89 per cent of such transactions.

2.With new launches, expansions, every fifth scooter may be electric in FY26

Buoyed up by distribution expansion, a bevy of new launches, and the entry of Honda Motorcycles with electric Activa, two-wheeler manufacturers are confident that electric scooter (e-scooter) penetration could rise to a fourth or fifth of the total market (ICE and e-scooters) in FY26.

A top executive at a leading electric two-wheeler company said: “The industry is expecting two scenarios. At an average run rate of 120,000 units per month, we should reach 1.5 million sales in FY26. However, if we push the pedal a bit harder, penetration could reach 25 per cent, at a monthly run rate of 150,000 units.”

This optimism is driven by the rapid increase in distribution, which allows major players to cover 60 per cent of the overall market where two-wheelers are sold. Falling e-scooter prices, with new entry-level models, are also expected to expand the overall market.

3.India is deploying artificial intelligence in its battle against the world’s worst tuberculosis epidemic. 

The infectious disease killed more people than any other in 2023 — reclaiming the top spot from COVID-19 — and a quarter of all cases are in India. The country has invested millions in a national campaign to curb the disease, reducing its incidence by 18% since 2015.

But diagnosis remains challenging. To assist health workers, a nonprofit is using AI tools to detect potential infections by the sound of patients’ cough, IEEE Spectrum reported.

The tools also predict which patients might drop out of treatment and who is most at-risk. So far, the AI’s results are “very encouraging,” scientists said.

4.Viswanathan Anand is creating an academy of grandmasters

Vishwanath Anand, the emblematic symbol of chess in India, now 54 years old, has in recent times segued into multiple roles as his playing days continue to become fewer. One of them is as the deputy president of the International Chess Federation (FIDE); the other is as a mentor to the next gen of Indian players.

The latter has come through the WestBridge Anand Chess Academy or WACA (not to be confused with Perth’s cricket ground), which started four years ago. The project came about serendipitously, says Sandeep Singhal, the co-founder and managing partner of investment firm WestBridge Capital, which has over $7 billion in assets under management.

When Anand, invited to talk to their investors pre-pandemic, was leaving the meeting, Singhal asked if they could contribute to chess. Anand said he would think about it and when he got back to Singhal, it was with the idea for WACA.

The academy launched in late 2020, delayed due to the pandemic, as a fully online collective with the aim of selecting the most promising youngsters (rather than them applying for it). “The idea was to help them jump from being a youngster with a lot of promise or from being one of the best juniors in the world, to being one of the best players in the world," says Anand, the WACA co-founder with Singhal.

Five players, Nihal Sarin, R Praggnanandhaa, D. Gukesh, Raunak Sadhwani—all aged 14-16 then—and R. Vaishali, were part of the first batch, with Leon Mendonca joining in later. Most had become grandmasters in their early teens, except Vaishali, who was among the top women players in India. About 17 players varyingly use WACA’s services today.

5.Honda, Nissan say they plan to merge in 2026 to create the world’s third largest automotive company

Honda and Nissan are seeking to create a new force in the global automotive industry as carmakers face an existential crisis. A week after the Japanese companies were reported to have explored a merger, the companies on Monday inked a basic agreement for merger talks.

Mitsubishi, which is 24.5% owned by Nissan, also signed the memorandum of understanding and will be part of the group. Such an alliance would create the world’s third-largest automaker by sales volume, and a holding company will be created with the aim to list by August 2026. 

In some ways, the combination could be seen as a defensive merger among Japan’s weaker players. Carlos Ghosn, the fugitive ex-Chairman of Nissan, said the deal shows his former company is in “panic mode.” Joining forces would allow them to fend off Toyota, the world’s largest automaker, at a time when aggressive competition from China has forced legacy carmakers to rethink their business models.

6.First Sleep Apnea Treatment approved by US FDA

The Food and Drug Administration (FDA) has approved obesity medication Zepbound to treat moderate to severe obstructive sleep apnea for obese adults. The announcement makes the Eli Lilly medication the first drug in the US approved to treat sleep apnea. 

An estimated 39 million US adults suffer from the disorder, in which the upper airway becomes blocked, jolting people awake and causing them to gasp for air. While anyone can suffer from sleep apnea, obesity is a leading risk factor. Left untreated, the disorder can lead to memory loss, cognitive impairment, heart failure, stroke, and diabetes. The most prescribed treatment involves the use of a continuous positive airway pressure machine. 

A study found obese adults with the disorder lost an average of 20% of their body weight on Zepbound—and experienced 25 fewer breathing interruptions per hour of sleep. The FDA's approval could spur Medicare—and other insurers not currently covering the drugs for weight loss—to expand coverage.

7.We Are Headed Towards a System of National Capitalism

When Russell Napier speaks, investors around the world listen closely. The long-standing market strategist – formerly with the Hong Kong brokerage CLSA – and author of the Solid Ground Report was one of the earliest warning voices of an impending wave of inflation in the summer of 2020. When The Market NZZ spoke with him two years ago, he predicted a boom in global capital investment.

Napier remains convinced that the global financial system is in the process of fundamental change. «We are talking about nothing less than a collapse of the global monetary system as we have known it for the last three decades», he says.

In an in-depth conversation with The Market NZZ, Napier explains what this means and how investors should prepare for it.

The more interesting point he raises in this interview is that of “National Capitalism”, where governments across the world, direct or perhaps even coerce private capital to be invested for national interests, undermining free market capitalism.

8.Some whale species may live twice as long as we thought — if we let them. 

Cetaceans are the longest-living mammals: One bowhead whale reached 211 years. But establishing their ages is difficult, relying on rare tissue samples or abstruse methods such as counting layers of earwax, like tree rings.

Also, the mechanised slaughter of whales in the 20th century means there are few of the oldest alive. But new research used photo catalogues and statistical methods like those used in human actuarial tables, Science reported, which suggested that southern right whales, thought to live to 70-ish, coul regularly reach 130 years. But their northern cousins have a harder time, with few reaching 50 because so many get tangled in fishing nets.

9.The 20 best TV shows of 2024

From an electrifying action thriller with Keira Knightley to Ted Danson's latest sitcom and a brutal Japanese period epic, BBC picks the year's greatest programmes to stream right now.

10.Meet the most ruthless CEO in the trillion-dollar tech club; The Economist

THE BOSSES of America’s trillion-dollar technology giants represent two CEO archetypes. First, the eccentric visionary founder: Mark Zuckerberg of Meta, Elon Musk of Tesla and Jensen Huang of Nvidia are obsessed with their products; wield untrammelled power thanks to the strength of their will, the size of their shareholding, or both; and make questionable sartorial choices. Second, the caretaker: Tim Cook of Apple, Satya Nadella of Microsoft, Andy Jassy of Amazon and Sundar Pichai of Alphabet, Google’s corporate parent, are low-key, sensibly attired hired guns who mostly take great existing products and turn them into fabulous businesses.

Hock Tan of Broadcom, which joined the trillion-dollar club on December 13th, does not fit neatly into either category. The company’s market value surged by 40% in a week owing to brighter-than-expected prospects for its line in designing custom artificial-intelligence (AI) microprocessors for clients such as Google and Meta. This immediately drew comparisons to Mr Huang and Nvidia, whose own AI chips have propelled its market capitalisation to $3.4trn over the past couple of years. Yet Broadcom is, true to its name, much broader than that. And Mr Tan cuts a distinct figure in the world of big tech.

Besides the sexy ai processors, Broadcom sells everything from worthy but dull wireless-networking chips to equally worthy and duller “virtualisation” software for managing company it systems across in-house servers and the computing cloud. Whereas most other tech titans play up the links between their various units, Broadcom is a proudly disjointed conglomerate. Asked in an interview in 2023 whether he had an overarching strategy for its 23 divisions, Mr Tan responded with characteristic candour: “The answer, I hate to say, is ‘no’.”

Mr Tan is unlike his fellow 21st-century technology bosses in a number of revealing ways. He was born in Malaysia, not exactly a hotbed of global C-suite talent. He is a decade or so older than Messrs Cook and Huang, the eldest of the Magnificent Seven’s CEOs, and three decades Mr Zuckerberg’s senior. You will be hard-pressed to find a photograph of him wearing anything but a starched shirt and a sober jacket.

His method is likewise singular—for despite his professed lack of strategy he is nothing if not methodical. William Kerwin of Morningstar, a firm of analysts, likens it to that of the buy-out barons who first recruited Mr Tan in 2006 to run what was then Avago, a privately held chip-designer. Identify a mature business, ideally one that is critical for customers. Buy it at a decent price. Cut it to the bone by reducing the workforce, eliminating less lucrative products and slashing research-and-development budgets. Jack up prices for captive clients. Harvest the cash. Fork lots of it out to shareholders through dividends and share repurchases, which big tech tends to shun. Take what is left and repeat.

Mr Tan recoils at comparing Broadcom to private equity. True, his penchant for takeovers ($150bn-worth since Avago went public in 2009), an obsession with cashflow and an impatience with underperformers recall the buy-out industry. But above all, in the words of Doug O’Laughlin of SemiAnalysis, a research firm, he is a “capital-R ruthless” operator, getting down and dirty in ways that pinstripe-suited financiers do not.

A more apt comparison than private-equity moguls may be Jack Welch, who ranked, yanked and dealt his way to becoming an icon of late-20th-century capitalism at General Electric. Except that Mr Tan is a much more disciplined dealmaker than Welch, who strayed so far from GE’s industrial bread and butter as to buy the nbc television network and make a reckless foray into finance that ultimately brought ge low under his successors in the 2000s.

“Neutron Jack”, so nicknamed after the neutron bomb that kills people but leaves buildings intact, also looks like Mother Teresa next to the pink-slip-happy Broadcom boss. After the acquisition in late 2023 of VMware, which makes virtualisation programs, he sacked several thousand staff, narrowed the product range and raised prices for what remained as much as ten-fold. In the latest quarter VMware’s sales were nearly double those in the first quarter of 2024. Its operating margin is an enviable 70%.

New buyers of Broadcom’s ai chips, which are rumoured to include OpenAI, a leading builder of cutting-edge AI models, and ByteDance, TikTok’s Chinese owner, should brace for similar treatment. In early December, while accepting a lifetime-achievement award from the Global Semiconductor Alliance, a trade body, Mr Tan chastised his industry for being “naive” in accepting a 20% decline in chip prices every year even as car prices rose 10%. “We are really complicit in creating this rather distorted expectation of paying less for more,” he declared.

Broadcom’s customers will almost certainly, like VMware’s, grumble but pay up. They all want to reduce their dependence on Nvidia, whose graphics-processing units are not exactly cheap and more power-hungry than Broadcom’s at a time when energy is becoming a constraint on the growth of ai. Mr Kerwin of Morningstar expects custom chips to account for 20-25% of the market for “accelerated computing” by 2027, up from perhaps 10-15% today. Mr Tan’s company will grab a lion’s share of that.

Mr Tan, for his part, will want to reduce Broadcom’s reliance on AI chips. Having been stymied by Donald Trump’s first administration from buying Qualcomm, a large chip-design rival, in 2018, he may steer clear of semiconductor deals and instead spring another software surprise. One thing, though, will not change. In Mr Tan’s tech-dom, cash will remain king—as well as queen, prince, princess and the rest of the royal household.