Arvind's Newsletter

1.India extends winning streak, is top emerging market for 10th straight month, as per Mint’s Emerging Market Tracker

Mint’s Emerging Markets Tracker provides a summary of economic activity across 10 large emerging markets based on seven high-frequency indicators. With a composite score of 85, India topped the EM league table in December. China and Brazil were second and third, respectively.

India topped the chart for the 10th straight month with the best PMI reading, top-notch stock market performance, and strong exports growth.

China climbed two spots to reach No. 2 as its inflation was the lowest amongst peers, and the yuan's gain against the dollar outshone other currencies.

Brazil dropped one spot to third despite strong exports growth because of a weaker forex and stock performance than in November.

2.Walt Disney's India unit market valuation halves in Reliance merger talks, collateral damage of Sony-Zee TV break-up, reports Bloomberg

Walt Disney Co.’s India unit is being valued at less than half of what it hoped for in a proposed merger with Indian billionaire Mukesh Ambani’s media business, reflecting the struggle global media giants face in one of the world’s fastest-growing entertainment markets.   

After weeks of negotiations following a non-binding pact with Ambani’s Reliance Industries Ltd. to merge their entertainment business, Disney’s India assets are valued at around $4.5 billion, less than the $10 billion the US entertainment giant has previously pursued, according to people familiar with matter, who asked not to be identified as the discussions are private. 

The lower-than-expected figure is also due in part to a write-off of revenue originally due to Disney from its sale of cricket TV rights to embattled Zee Entertainment Enterprises Ltd., which is now expected to be unable to pay up.

No final decision has been made on the deal and its terms, and either party can still call off the transaction, according to the people.

3.India targets higher nuclear power

India will “commission a new nuclear power reactor every year,” according to the chairman of the state nuclear company, Nuclear Power Corporation of India Limited (NPCL), B.C. Pathak told The Hindu that 19 reactors are under construction in India.

 It’s part of an ongoing drive for nuclear power, to boost electricity generation and meet decarbonization targets: Last year, the largest Indian-made reactor, Kakrapar-3, went online. In 2024, another unit with the same capacity is expected to be commissioned in Rawatbhata, Rajasthan. Several countries agreed at COP28 to triple nuclear capacity by 2030, but Pathak said India already planned to, from 7,480 MW to 22,480 MW by 2031. 

4.Gene Therapy facilitates Hearing Loss Breakthrough

An 11-year-old boy with congenital hearing loss is able to hear for the first time thanks to an experimental gene therapy treatment, according to initial results released yesterday.

Aissam Dam was born with hearing loss caused by a mutated single gene known as otoferlin, which affects roughly 200,000 people globally. Otoferlin is a protein in the inner ear's hair cells that allows for sound to be transmitted to the brain.

Dam became the first patient in the US to undergo a surgical procedure at the Children's Hospital of Philadelphia in October, in which doctors replaced the mutated otoferlin gene in Dam's ears with a functional gene. The gene therapy trial showed Dam's hearing was restored within 30 days of the procedure, reducing his hearing loss severity from total to mild.

The trial from Philadelphia is one of five that are underway, with others in China and Europe. Results from all five trials are set to be presented next month. 

5.Netflix adds 13.1 million subscribers, beats revenue estimates

The gains further cement Netflix’s place as the clear winner in the streaming wars, with more than 260 million paying to watch its programming globally. That includes a strong boost late in the year in both the U.S. and European markets that account for the bulk of the company’s revenue.

The Onveston Letter blog opines that Netflix is an AI giant hiding in plain sight. Netflix is NOT a streaming company. They are fundamentally a data analysis enterprise; the streaming content serves primarily as a manifestation of their extensive data insights.

Netflix’s power lies within its proprietary system and application technology that offers its subscribers suggestions and recommendations on what next to watch based on their viewing preferences and history.

This highlights a key advantage Netflix holds over traditional TV production: direct, real-time feedback from viewers. For instance, if you pause a film at a certain point to finish it later, it might just be due to fatigue.

However, if millions of viewers exhibit similar behavior at that exact moment, it could indicate a flaw in the script, signaling the directors to make adjustments in future productions.

In contrast, traditional TV productions lacked access to such immediate and detailed insights, often relying on surveys and less direct methods to measure audience engagement and content effectiveness.

6.The cost of moving oil round the world is going up

Two months of missile and drone attacks in the Red Sea have caused the biggest diversion of international trade in decades, pushing up costs for shippers as far away as Asia and North America.

Repeated rounds of retaliatory strikes by the US as well as a multinational naval operation haven’t stopped the assaults by Iran-backed Houthi militants who have said they are in response to Israel’s bombing of the Gaza Strip in its war with Hamas.

With sailors demanding double pay and insurance rates skyrocketing, shipping lines are steering clear of a waterway that normally carries 12% of the world’s seaborne trade. And the disruption is spreading, fueling fears of broader economic fallout.

Nearly 500 ships have already gone around Africa, adding up to 4,000 miles, two weeks and fuel worth $1 million to reach their destinations.  Knock-on effects could be worldwide inflation and perhaps shortages. 

The Drewry World Container Index of 40-feet container costs is up nearly 150% since December 14. Freight on the Shanghai-Genoa route has risen the steepest, from $1,697 to $6,282 per box. 

7.Global lithium prices dropped 80% year-on-year as China’s demand for electric vehicles slowed, reported the Financial Times

A prior boom in EV sales led to many new lithium mining projects, notably in Australia, the source of 40% of the world’s supply. But that demand was heavily driven by China, which is now enduring an economic slump. Lithium topped $80,000 a ton in 2022 and 2023, but is now down to $13,000.

Tesla boss Elon Musk also warned of an EV slowdown, saying growth would be “notably lower” this year than last: He also said that Chinese EV firms will “demolish most other car companies” by undercutting them if trade barriers are put up. China’s BYD overtook Tesla as the world’s biggest EV manufacturer late last year.