Arvind’s Newsletter

1.Bloomberg index inclusion to add $3-4 billion inflows

Financial news and data provider Bloomberg said it will add a set of Indian government bonds to its widely-tracked emerging market index, a development that could potentially attract investment flows of $3-4 billion beginning next year.

Global investors with passive investment strategies buy stocks and bonds featuring in global indices, and Bloomberg's addition of Indian bonds promises to attract investments in them.

Indian bonds available under the fully accessible route (FAR) will be included in Bloomberg's Emerging Market (EM) Local Currency Government Index and related indices, beginning 31 January, 2025. Bloomberg's index rebalancing comes about six months after JP Morgan decided to include India's FAR securities in its GBI-EM Global index suite from 28 June 2024, a move expected to attract $22-25 billion over time.

2.Digital to overtake TV advertising in revenues by end of 2024: FICCI-EY Report; analytical piece by Vanita Kohli-Khandekar

It has been a slow year for the Indian media and entertainment (M&E) business. After two years of double-digit growth, it grew at just about 8 per cent in 2023 over 2022. It now stands at Rs 2.33 trillion in advertising and pay revenues. Online gaming and live events are among the fastest-growing parts of the business, albeit on a small base.

The big surprise is print media, which grew by 4 per cent. Indian cinema had a great 2023, and it shows. The movie business grew 14 per cent. Television, which is facing the brunt of the advertising slowdown and the rising migration to digital, saw a de-growth of 2 per cent. 

By the end of this year, digital will overtake television as the largest chunk of the Indian M&E business. The media sector is expected to grow by 10.2 per cent to reach Rs 2.55 trillion by 2024. It will then grow at a compounded annual growth rate of ten per cent to reach Rs 3.08 trillion by 2026. 

These, among others, are the big takeaways from the annual Federation of Indian Chambers of Commerce and Industry (FICCI)-EY report that takes the most comprehensive look at the business in India.

3.Apple hits speed bumps

First it ditches plans for a car. Now Apple is hitting speed bumps with a product it already makes. iPhone sales in China fell by a whopping 24% over the first six weeks of the year, with the gadget struggling to replicate its usual success in the world’s largest smartphone arena. The company has also lost the title of world’s most valuable company to Microsoft and was removed from Goldman Sachs’ list of highest-conviction investments and Evercore ISI’s tactical outperform list.

Meanwhile, Apple shares are tanking. Traders are eyeing the stock as it slid below a critical psychological threshold on Tuesday—entering a technical correction for the first time since August. The shares, which failed to hold the $180 support level last week, traded for less than $170 at various points during Tuesday’s session.

4.BYD, the world’s biggest EV maker is rewriting the rules of batteries

China’s BYD is betting big on sodium ion cells.

Meanwhile, in India China's BYD looks to reach 90% of EV market this year.Chinese car maker BYD is aiming to retain pole position in India’s electric vehicle (EV) segment priced above Rs 30 lakh, Senior Vice-President of Electric Passenger Vehicle Business, Sanjay Gopalakrishnan, told Business Standard.BYD India launched its electric sedan Seal, priced between Rs 41 lakh and Rs 53 lakh. 

When asked about the logic of launching a sedan in a country where sport utility vehicles (SUVs) are increasingly becoming popular, Gopalakrishnan said: “We have multiple SUVs globally, but we thought that Seal is the right product for the Indian market. It has been globally acclaimed. It is a competitor of the Tesla Model 3. Indian consumers know about Model 3, so we thought let us bring a Model 3 competitor to India that also gives a taste of our technology and performance.”

The company, which entered the Indian market in 2022, currently sells two electric cars in India -- Atto 3 and e6, a multi-utility vehicle. Seal is the company’s third offering.

5.Ozempic reduced the risk of kidney disease progression in diabetes patients, boosting evidence that the drug has wider health benefits. 

Novo Nordisk, the drug’s manufacturer, said initial results showed those given Ozempic were 24% less likely to die of kidney or cardiovascular complications than those given placebo. Last year another trial showed a 20% reduction in heart attacks and stroke among patients given Wegovy, the higher-dose Ozempic injection intended for weight loss. The popularity of the drug has made Danish firm Novo Nordisk the most valuable company in Europe: Denmark’s economy avoided a contraction in 2023 primarily thanks to Novo Nordisk’s rapid growth.

6.Life on a Train: “ I spend £8,500 a year to live on a train – I’ve travelled 310,000 miles so far.”

While the 17-year-old digital nomad Lassu Stolley does indeed live on trains, he does so entirely legally. And with a surprising amount of comfort.

Lasse travels 600 miles a day throughout Germany aboard Deutsche Bahn trains. He travels first class, sleeps on night trains, has breakfast in DB lounges and takes showers in public swimming pools and leisure centres, all using his unlimited annual railcard.

The self-employed coder technically has no fixed abode and appears to really enjoy his unusual way of life, something which he chronicles regularly on his blog, Life on the Train.

7.Why you should lose your temper at work, opines Bartleby in the Economist.

Awareness days are meant to remind people of important causes and desirable behaviour. Among other things, February sees the International Day of Human Fraternity, World Day of Social Justice and—everyone’s favourite until it became a bit too commercialised—World Pulses Day. International Day of Happiness falls in March; you have to wait until November for World Kindness Day.

Anger is far too objectionable to be celebrated with a special day of its own. There is an anger-awareness week in Britain, but the emphasis is on controlling tempers, not giving in to them. Yet in the workplace, as elsewhere, anger is more ambiguous than it seems.

Its destructive side is obvious. Furious people are not much fun to work with, and less fun to work for. A short-fused boss is likely to instil fear among employees and to discourage people from speaking up. Anger can also engender poor performance. Anyone who has ever been riled by a rude email or uncivil colleagues knows how in such circumstances suddenly nothing else matters. Every spare bit of cognitive power is redirected to thinking of devastating put-downs from which the offender will never recover; other tasks can wait.

In one paper on the effects of rudeness on medical professionals, Arieh Riskin of Bnai Zion Medical Centre in Haifa and his co-authors describe a training exercise in which teams of Israeli physicians and nurses treated a mannequin of a baby. The teams were joined by someone billed as a visiting expert from America, who offered studiously neutral comments to some groups and made unprompted and disparaging remarks about the quality of medical care in Israel to others. The teams that had suffered rudeness performed significantly worse.

Being angry all the time is bad news for individuals and organisations alike. But so is being tremendously satisfied by everything all the time. Jeffrey Pfeffer, a professor at Stanford University who teaches a course on how to acquire power, reckons that displaying anger is an important skill for those who want to rise up the corporate ladder. It is associated with decisiveness and competence (though angry women are more likely to evoke negative emotions among other people than angry men do). Doctors who get angry if they are challenged about their medical advice are not judged to be less competent; if they show shame, patients take a dimmer view.

Anger can have a galvanising effect in specific circumstances. A study by Barry Staw of the University of California, Berkeley, and his co-authors analysed half-time team talks by college and high-school basketball coaches in America, and found that expressions of negative emotions such as anger and disappointment were associated with better second-half outcomes—up to a point. When coaches reached the bulging-eyeballs stage, rage started to have the opposite effect.

There are similar nuances in negotiations. A paper by Hajo Adam of Rice University and Jeanne Brett of Northwestern University found that as people got more upset, they were more likely to extract concessions. But being too angry was seen as inappropriate. And although displays of anger can work in one-off negotiations, they also invite retaliation in subsequent interactions.

Anger has different effects on different types of people. Agreeableness is one of the “Big Five” personality traits recognised by most psychologists. Agreeable sorts value co-operation and courtesy; disagreeable ones are more cynical and more comfortable with conflict.

In an experiment by Gerben Van Kleef of the University of Amsterdam and his co-authors, teams comprised of agreeable and disagreeable people were given feedback on their performance by an actor. The words were the same each time, but in some instances the actor looked and sounded happy and in others they looked and sounded angry. An angry evaluation spurred the more disagreeable teams to do better than a happy (or poker-faced) one; the reverse applied to the more agreeable teams.

By now the problem should be obvious. Anger involves a loss of control. But to be effective in the workplace, it needs to be carefully modulated. That means volcanic people need to find ways to rein themselves in before they spew invective everywhere. It also means that equable people need to learn to let fly occasionally. If there is room in the calendar for International Jazz Day, then there is certainly a case for World Calibrated Displays of Anger Day. ■

8.Scientists found a candidate drug that could disable the mutation behind most pancreatic cancers.

Pancreatic cancer is extremely deadly, with fewer than 10% of patients surviving five years after diagnosis, and that has changed little even as progress has been rapid in fighting other cancers. More than half of cases are caused by a mutation that creates a particular rogue protein. The new drug molecule permanently binds to the faulty bit of that protein, and was shown to stop tumour growth in lab-grown cancer cells and an animal model without attacking healthy proteins. Researchers hope new therapies using the molecule could be in trials within two years, rare good news in the fight against a stubborn form of the disease.