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On Slack: The Deal That Hamstrung Tata Steel, Why Allergan Shares Are Tanking, Carlos Slim Positions for a Spanish Real-Estate Recovery and much more…

The Slack Discussions

The Slack group at Capital Mind Premium has been extremely active and if you haven’t been there, pop us a note by replying to this email. (If you’re a trial member this probably sound like Greek to you; it will be available when you sign up!)

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A brief summary of some of the interesting things discussed there in the last few days:

#macronomics: Charting the Automation Potential of U.S. Jobs

In last week’s Chart of the Week, we noted that 1.3 million industrial robots would be installed between 2015 and 2018, and this would more than double the stock of active robots around the world.

While many of those robots will be used in the automotive and electronics sectors, there are many other roles that robots will be filling in the future. Surprisingly, according to global consultant McKinsey & Co, not all of these jobs are low-skill, low-wage jobs, either.

#general: Bigbasket Should Be Shut Under New Norms: Biyani

A day after the government clarified that foreign direct investment (FDI) is not allowed in inventory-based e-commerce, Future Group CEO Kishore Biyani trained guns on the country’s leading online grocer Bigbasket, terming its operation as illegal. Biyani, a pioneer in the traditional retailing industry, said under the new guidelines Bigbasket should ideally be shut immediately.

#general: Drought In Maharashtra Brings Behatar Din To UP Sugar Mills

Somebody’s loss is somebody else’s gain. This certainly holds true for sugar today where extreme drought has taken a heavy toll of Maharashtra’s production, even as millers in Uttar Pradesh (UP) seem set for behatar (better) if not acche (good) din after an extended period of gloom.

#general: Chinese Market Offers New Life to Many Drugs

Drugs that failed to make it to the market in the U.S. and elsewhere are finding new life in China. In 2013, Bristol-Myers Squibb Co. stopped global trials of a first-line liver-cancer drug after it failed to outperform a rival. Instead, the company licensed the drug, brivanib, to a Chinese startup.

#stocks: Cancelling Your IndiGo Ticket? This Is How Much You Will Have To Pay

Budget carrier IndiGo is all set to charge Rs 2,250 fee from its customers wanting to cancel their domestic flight tickets, a move that is likely to attract some queries from the aviation regulator, Directorate General of Civil Aviation (DGCA).

#general: EPFO Puts On Hold New PF Withdrawal Norms Till April 30

Retirement fund body EPFO today deferred till April 30 implementation of new norms that restrict 100 per cent withdrawal of provident fund by members after unemployment of more than two months, among others.

#stocks: Spicejet Raises Cancellation, Rescheduling Charges

A day after IndiGo raised cancellation charges on air tickets, SpiceJet today announced to raise cancellation and rescheduling charges from April 7, 2016.

The cancellation charges for domestic tickets has been increased from Rs 1,899 to Rs 2,250 and for international tickets have been raised from Rs 2,349 to Rs 2,500.

#general: Why Indian Real Estate Will See A Crash, Or At Least A Long Period Of Stagnation

In 2015, four percent fewer homes were bought in eight of India’s major cities – Delhi/NCR, Mumbai, Bengaluru, Chennai, Kolkata, Pune, Hyderabad and Ahmedabad. These cities had nearly seven lakh units left unsold, an inventory backlog that will take at least two or three years to clear, assuming no new units are built.

#stocks: Analyse This – The Enduring Power Of The Biggest Idea In Business

What is the most influential contemporary book about the world economy? An obvious choice is “Capital in the Twenty-First Century”, a 696-page analysis of inequality by Thomas Piketty, a French economist. There is another candidate: “Valuation”, a 825-page manual on corporate finance and shareholder value. Some 700,000 copies of it encumber the bookshelves of MBA students, investors and chief executives around the globe.

#general: NASA Satellites Unlock Secret to Northern India’s Vanishing Water

Beneath northern India’s irrigated fields of wheat, rice, and barley … beneath its densely populated cities of Jaiphur and New Delhi, the groundwater has been disappearing. Halfway around the world, hydrologists, including Matt Rodell of NASA, have been hunting for it.

#general: Has The Opportunity For Indian Startups Been Terribly Wrongly Estimated?

I was at a conference the other day, speaking on a panel with VCs and angels, when we were asked a question: With the softening of valuations and the famous Flipkart markdown, is there still a large internet opportunity in India?

My friend and co-panelist from a large VC fund jumped up and trotted out the now-standard schtick: that the combined market cap of Chinese internet firms is half a trillion dollars and as of now the combined market cap of all Indian internet firms is just around $30 billion — so yes, there is loads of room to grow. Maybe 10x or 15x or more.

#stocks: Finance Ministry lines up 16 PSUs for disinvestment

Finance Ministry has drawn up a list of 16 PSUs including ONGC, Oil India and Coal India for disinvestment in 2016-17 which could fetch the exchequer Rs 40,000 crore at current stock value.

The list includes state-owned companies such as NMDC, MOIL, MMTC, National Fertilisers,NHPC, NALCO and Bharat Electronics, sources said.

#general: Dirty Little Secrets

It’s a parallel universe for the ultra-rich and ultra-powerful. But a massive new leak has exposed their underworld.

Fusion goes inside the law firm that sells secrecy to drug dealers, dictators and alleged sex traffickers.

By the Naked Truth staff.

#general: ‘Even-Odd’ Set to Replace 3-in-1 on Jakarta Roads

Jakarta’s controversial three-in-one carpooling system, suspended temporarily this week (5-8 April) and next week (11-13 April), could be replaced with a new system restricting access to certain roads according to cars’ even or odd-numbered license plates.

The “even-odd” system will take over also temporarily, as city administration remains adama
nt that the only solution to gridlock on Jakarta’s main roads is electronic road pricing (ERP), where cars are forced to pay a fee to enter certain roads.

#stocks: The Deal That Hamstrung Tata Steel

Between 2000 and 2010, Ratan Tata embarked on a near-$20bn acquisition spree, transforming his family’s business into one of world’s top conglomerates.

The Indian tycoon scooped up Tetley Tea and Jaguar Land Rover in the UK, New York’s Pierre Hotel and South Korean truck maker Daewoo. However, the industrialist’s most ambitious acquisition came on January 31, 2007, when Tata Steel finally triumphed over Brazilian rival Cia. Siderurgica Nacional (CSN) in a bidding war for Corus, the FTSE 100 steelmaker forged from the 1999 merger of British Steel with Dutch rival Hoogovens. But despite the victory, the Indian firm’s shares dropped almost 11pc.

#general: Sunil Gavaskar, Ravi Shastri BCCI’s Highest-Paid Retainers Not Cricketers

India captain M S Dhoni might be fifth on the recent Forbes list of most valuable athlete brands, but he isn’t the one who gets the fattest BCCI pay cheque. Nor do any of his teammates. That honour belongs to former captains Sunil Gavaskar and Ravi Shastri, the highest-paid BCCI retainers.

#stocks: Ford Motor to Close Operations in Indonesia, Japan

Ford Motor Co. is packing its boxes in two Asian markets, saying it plans to close sales operations in Japan and Indonesia by the end of 2016 amid a broader pullback by Detroit car companies from unprofitable ventures.

#general: Indonesia’s Radical New Plan To Catch Tax Cheats: Spy On Everyone’s Credit Card Spending

Few people enjoy paying taxes, as millions of Americans can attest to this time of year. Indeed the recently linked “Panama Papers” show how far some political and business elite will go to hide their assets from the prying eyes of finance officials. In Indonesia, tax authorities are about to gain a new weapon against those who under-report their incomes on their tax returns: credit card data.

#stocks: Here’s Why Allergan Shares Are Tanking

Under new Treasury rules, the pending $160 billion merger of Pfizer and Allergan could be at risk.

The U.S. Treasury Department took new steps on Monday to curb tax-avoiding corporate “inversions,” with the pending $160 billion merger of Pfizer and Allergan seen as a potential casualty.

#stocks: LIC Rides To The Rescue Of Public Sector Banks

The Life Insurance Corp. of India (LIC) has been helping the government pump in money into capital-starved public sector banks. It has been increasing its stake in public sector banks for the past few years, as you can see from the chart compiled by Kotak Institutional Equities Research. The latest addition came on 31 March when IDBI Bank sold its 2% stake with the National Stock Exchange to LIC for around Rs.351 crore, a part of the turnaround plan for the bank.

#stocks: Tata Tiago Launched In India At Rs. 3.20 Lakh

After a series of delays, Tata Motors has finally launched the Tiago (earlier known as the Zica) in India at Rs. 3.20 lakh (ex-Delhi). The all new Tata Tiago is aimed to be a modern alternative to the ageing Indica. Available in both petrol & diesel engines, the Tata Tiago gets a total of 8 variants.

#stocks: India Ratings Revises Realty Sector Outlook To Negative For FY17

Ratings agency India Ratings and Research (Ind-Ra) has revised its outlook on the real estate sector to negative for FY17 from ‘negative to stable’, based on the expectation that property demand will not revive during the year.

#general: Oracle Invests $400 Million In Bengaluru Hub; Calls India Cloud Centre Of World

To encourage adoption of cloud technology in India, Oracle on Wednesday unveiled ‘Oracle Cloud at Customer’ in India ahead of Oracle Cloud World Summit in Mumbai. This is the first-of-a-kind service in the country that allows the cloud platform to function right inside customers’ own data centers.

#macronomics: No Jobs In Sight

A major reason for mounting discontent among young people is because they have no jobs and future to look forward to. Union Minister Ram Vilas Paswan raised many hackles with his demand for affirmative action or job reservations for Scheduled Caste and Scheduled Tribe candidates in the private sector. He suggested that “providing quota in private jobs will help cool down anger among SC and STs”, thereby stemming the rise of Maoist militancy among them. He observed that the lands of these vulnerable communities “are being snatched away. This land has gold and coal beneath it. You dig it out and shoo them away. The youth then take up the wrong path”.

#general: Uber, Ola Face The Heat In Maharashtra, Too

Maharashtra is all set to follow in the footsteps of Karnataka to bring taxi aggregators like Uber and Ola within its ambit for fare fixation and curb surge pricing.

The state’s transport department has submitted its proposal to the government. The move willbenefit consumers but hurt aggregators.

#macronomics: `Brexit’ Risks Leaving European Banks With $123 Billion To Cover

If Britain decides to leave the European Union, a corner of the credit market may depart with it and European banks could be left having to replace as much as 108 billion euros ($123 billion) of securities.

Lenders from the EU that bought bonds backed by U.K. mortgages, bank loans and credit-card debt may find themselves caught up in the fallout of a “Brexit” because the debt might no longer count toward their emergency cash reserves. While a settlement with the bloc would take years to reach, lawyers and analysts are beginning to flag concerns about holdings of the asset-backed securities, a market that’s already been hammered since the financial crisis.

general: Carlos Slim Positions Himself for a Spanish Real-Estate Recovery

Mexico’s Carlos Slim is pushing further into investments in Spain, where fellow billionaires George Soros and Bill Gates have also made bets, as he wagers on the European nation’s emergence from a property crash.

Slim, the world’s fourth-richest person on Bloomberg’s Billionaires Index, made a bid for Barcelona-based Fomento de Construcciones & Contratas SA last month through his financing vehicle, Inversora Carso.

#macronomics: The Secretive And Morally Dubious World Of Shell Companies

Unlike a regular company, which w
ill have employees, assets and operations, a shell company is a hollow structure, set up for the purposes of performing financial manoeuvres rather than selling goods or services.

#macronomics: Clean Disruption: Why Conventional Energy and Transportation will be Obsolete by 2030

Tony Seba gives the keynote address at the NZ SmartGrid Forum at the Te Papa museum in Wellington, New Zealand, March 31, 2014.

The keynote is titled “Clean Disruption: Why Conventional Energy and Transportation will be Obsolete by 2030″.

#general: Paytm Eyes Rs 13k-Cr GMV From Bill Payments

Eyeing a 200 per cent growth, month on month, mobile wallet company Paytm said on Thursday the gross merchandise value (GMV) of its utility bill payments vertical would reachRs 13,000 crore by the end of this year.

#macronomics: RBI’s Premature Change In Stance

The 25 basis point reduction in repo rate by the Reserve Bank of India (RBI), in my view, was broadly to accommodate market expectations and is probably indicative of the choice RBI has made to remain accommodative, notwithstanding the fact that core consumer price index inflation has been rising recently.

#general: Reliance Jio Could Stump Market With Low Data Tariffs At 0.5 Paisa Per 10 Kb

Reliance Jio Infocomm could well stun the market, offering 0.5 paisa per 10 kb of data usage, which is substantially lower than the 4 paise per 10 Kb data being charged by India’s top telcosBharti Airtel, Vodafone India, Idea Cellular.

#stocks: UK’s Serious Fraud Office Starts Criminal Investigation Into Tata Steel

The United Kingdom’s Serious Fraud Office (SFO) has opened a criminal investigation into Tata Steel’s operations over an alleged falsification of product certificates, according to a report in the Telegraph.

Although it appears that the company referred itself to the fraud office after an internal audit that threw up issues of “inappropriate testing and certification”, the SFO’s inquiry comes at a difficult time for the salt-to-software conglomerate, which is looking to exit its UK business.

#stocks: There’s A Loud Corner Of Reddit Where Millennials Look To Get Rich Or Die Tryin’

“Y-O-F**KING-LO,” the teen wrote, flashing his trading statement. “900 to 55K in 12 days!”

On Reddit, he’s known as “World Chaos,” a Florida high schooler who earlier this year multiplied his money by betting against the S&P 500. His real name is Jeffrey Rozanski, and the 18-year-old’s appetite for risk would make many seasoned market players facepalm.

#general: Searching for Sundar Pichai

The Consumer Electronics Show, universally known as CES, is a riot of technology. Held annually in the bleak Nevada desert town of Las Vegas, it is a great blinking din, jammed with screens, speakers, automobiles, whirling drones, blooping robots, e-cigs and e-cigs and ever more e-cigs, plus some 170,000 people bumping around inside a disease-ridden convention center. Among those many attendees is Sundar Pichai, CEO of Google.

#macronomics: The Elephant In The Stats

Few economists wholeheartedly believe India’s stellar growth rate. Government statisticians shun the limelight, which only ever finds them when things go awry.

#general: Facebook Services Platform: A Masterstroke To Capture Rs 10 Lakh Crore Indian Hyperlocal Market

Silently, and discreetly, Facebook has launched their hyperlocal services platform in India, which has been conceptualized, designed and developed to target the Rs 10 lakh crore hyperlocal services market which has been largely untapped till now.

In a statement, Facebook spokesperson said, “We’re in the early stages of testing a way for people to easily find more Pages for the services they’re interested in,”

Besides few major players such as UrbanClap, QuikrServices, HouseJoy and Zimmber, there aren’t any big startup in this space. Overall, there can be around 150-250 online platforms all over India, where hyperlocal services are provided.

And Facebook is now all set to disrupt this space.

#general: Baba Ramdev, Sri Sri And India’s Skewed Corporate Laws

Lost in the din of the Panama Papers was an interesting coincidence. At the start of April, two unconnected newspapers, from different nations, carried features on two different individuals but on a common theme.

BS Weekend published a piece titled “The world of Sri Sri Ravi Shankar”. The article featured the commercial rise of the Art of Living empire ranging from wellness services to software and ayurvedic products to fast-moving consumer goods.

#stocks: A Measure of Stock-Market ‘Fear’ Just Hit an All-Time High

The cost of bullish call options is dropping, signaling muted expectations for gains in the stock market over the next three months.

The Credit Suisse Fear Barometer, which measures the cost of bearish put options relative to bullish call options, rose to a fresh record of 44.7% on Friday. The gauge, which goes back to 1994, is calculated by selling a 3-month 10% upside call on the S&P 500 and using the proceeds to buy downside protection; the barometer’s level shows how far below the current level of the S&P, in percentage terms, an investor has to go to buy a put that makes the strategy’s total cost zero.

#macronomics: India’s Audacious Plan to Bring Digital Banking to 1.2 Billion People

India is trying to yank its cash-based economy into the 21st century.

But how do you get 1.2 billion people, many of whom have never seen a bank or opened an account, to send digital payments to each other? 

#general: Noida’s Amrapali Sapphire Residents Troll Brand Ambassador Dhoni On Twitter

Residents of Sector 45 Amrapali Sapphire Society took the help of microblogging site Twitter to protest against the builder – Amrapali Group – that allegedly has not completed a residential project on scheduled time.

Residents also tagged Indian T20 captain and Amrapali brand ambassador Mahendra Singh Dhoni, requesting him to disassociate from the realt
y firm. Some requested him to ask the group to complete the project.

#macronomics: Eight Things Chinese Money Is Buying in America Right Now

Chinese companies, driven by favorable government policies and a desire to gain overseas assets, are on an unprecedented acquisition spree in the U.S. They’ve announced a record $40.5 billion of U.S. deals this year, already nearly double the amount for all of 2015. Here’s a sample of what Chinese money is buying.

#general: Forget Starships: New Proposal Would Use ‘Starchips’ To Visit Alpha Centauri

Physicist Stephen Hawking and billionaire Yuri Milner have a vision of interstellar exploration — taking place over the course of not thousands of years, but decades.

Together with a team of scientists, they suggest that within a generation, humans could send a probe to Alpha Centauri — more than 4.3 light-years away, or 25 trillion miles — on a trip that would take just over two decades. That’s 1,000 times faster than the current fastest spacecraft, the scientists say.

#general: Regulators Reject ‘Living Wills’ of Five Big U.S. Banks

Regulators ordered five big U.S. banks to make significant revisions to their so-called living wills by Oct. 1 or face potential regulatory sanctions, a stern warning that will fuel criticism the firms are “too big to fail.”

#macronomics: India Has The Most Sophisticated Payments System In The World – And Six Men Made It Happen

Technology is changing the financial sector of the Indian economy at jet speed, thanks to the ubiquity of Jan Dhan bank accounts (215 million accounts and counting – which means nearly all households covered), the spread of mobile phones (one billion mobile users in a population of 1.25 billion), and the Aadhaar unique ID (again, one billion IDs this month).

#general: Twitter’s Teen Influencer

Vinayak Sharma pushed open the door to his room. It was dark inside, except for a little, muddled light filtering through, from window panes, covered with newspapers which had begun to fray. A cooler had been inserted, none too professionally, in the bottom half of the window. Vinayak lunged towards his bed, hurriedly plugging his Apple iPhone 5S to a power bank. It needed charging. Urgently. But there was no electricity—power had been out since early morning.

#general: Second-Level Thinking: What Smart People Use to Outperform

Successful decision making requires thoughtful attention to many separate aspects.

Decision making is as much art as science. The goal, if we have one, is not to make perfect decisions but rather to make better decisions than average. To do this we require either good luck or better insight. And since luck isn’t really much of a plan, we should probably focus on better insight.

#general: The Perfect Asset Allocation

The arrival of the auto industry changed the way we lived, however like any new technology, it did not come without a cost. In 1917, Detroit had 65,000 cars on the road, which resulted in 7,171 accidents and 168 fatalities.  Advances in financial technology has exploded over the last few years, and like the birth of the auto industry, it has the potential to result in a few accidents.

#stocks: NFL Achieves Record Urea Production

Surpassing the previous records, National Fertilizers Limited (NFL) has achieved the ever highest urea production of 38 lakh MT with an overall capacity utilisation of 118 per cent during 2015-16. This accounts for 15.5 per cent share of the total urea production of 245 LMT in the country during 2015-16.

NFL’s contribution will help to reduce the import of urea and further enhance food security in the country.

#general: La Niña is Coming. Here’s What That Means for You.

With a monstrous and record-setting El Niño on the wane, the implications of its disastrous worldwide consequences are starting to settle in. But there’s new evidence that, on its heels, a potentially strong La Niña could emerge later this year—bringing with it a renewed stretch of extreme weather.

#goodreads:

Way of the Turtle: The Secret Methods that Turned Ordinary People into Legendary Traders

“We’re going to raise traders just like they raise turtles in Singapore.”

So trading guru Richard Dennis reportedly said to his long-time friend William Eckhardt nearly 25 years ago. What started as a bet about whether great traders were born or made became a legendary trading experiment that, until now, has never been told in its entirety.

#backtobasics

The Rise and Fall of Tim Leissner, Goldman’s Big Man in Malaysia

Should You Hedge Your Foreign Currency Exposure?

The Rise of Patanjali’s FMCG Business – Strategy With RS

Cartoon Donald Trump Tells Stephen [Colbert] Who Started It

5 Reasons to Open a Bank Account in Singapore (Even if You Don’t Live There)

A Deeper Look at Uber’s Dynamic Pricing Model

The Sugar Conspiracy By Ian Leslie

Vijay Mallya: Sky High Crucifixion – Ranjeev C. Dubey

The Secret Six

A half-dozen groundbreaking Ferraris were built for the Prince of Brunei.

Only one made it out of the jungle alive.

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Disclaimer

Nothing in this newsletter is financial advice and should not be construed as such. Please do not take trading decisions based solely on the matter above; if you d
o, it is entirely at your own risk without any liability to Capital Mind. This is educational or informational matter only, and is provided as an opinion. 

Disclosure: The authors at Capital Mind have positions in the market and some of them may support or contradict the material given above, or may involve a direction derived from independent analysis.