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Facebook-Instagram-Whatsapp to be Broken Up – Top 10 Global News

1. U.S. Futures Drop After Tech Slide; Pound Slumps

U.S. stock futures turned lower with European equities as investors assessed a dimmer outlook for fiscal stimulus and for any tech-stock rebound after Wednesday’s tumble. Nasdaq 100 contracts signalled the gauge may fall further after its biggest drop in a month on news that Facebook was being sued by U.S. antitrust officials. In Europe, German bonds dropped and the euro turned higher after the European Central Bank boosted its emergency bond-buying program by 500 billion euros ($605 billion). The pound sank further after a report that talks between the EU and the U.K. are on course to end without a trade deal, barring a dramatic last-minute intervention.

The Stoxx Europe 600 Index dropped 0.2%

Nasdaq 100 Index futures sank 0.5%.

Futures on the S&P 500 Index sank 0.2%.

The MSCI Asia Pacific Index gained 0.6%.

2. Facebook Breakup Would Demolish Zuckerberg’s Social Media Empire

The U.S. Federal Trade Commission took a major step toward the possible breakup of Facebook by formally filing an antitrust lawsuit against the technology giant, accusing it of abusing its monopoly powers in social networking to stifle competition. Whatsapp and Instagram acquisitions were meant to erase competition. Now, the FTC wants Facebook to divest the two businesses — an idea that poses an existential threat to the empire built by CEO Mark Zuckerberg. Because much of the company’s revenue growth is already coming from Instagram, and WhatsApp is central to Facebook’s bet on digital commerce, losing the two platforms would threaten to erase much of Facebook’s long-term value.

3. EU Leaders to Unlock Budget & Stimulus Deal at Major Summit

European Union leaders gathering in Brussels are expected to sign off on the bloc’s landmark $2.2 trillion stimulus package after a compromise struck with Poland and Hungary was set to unblock the flow of rescue funds to the continent’s battered economies. The governments in Warsaw and Budapest vehemently opposed making funding conditioned on rule-of-law standards and threatened to torpedo the EU’s 750 billion-euro pandemic aid fund and the 2021-2027 budget. But after long negotiations with Germany, which holds the bloc’s rotating presidency, they agreed on a statement clarifying the way the link would work.

4. Airbnb Reaches $47 Billion Value in Above-Range IPO

Airbnb priced its long-awaited initial public offering above a marketed range to raise about $3.5 billion, seizing on investor demand for a home-rental business roaring back from a pandemic-fueled slump. The company’s IPO came just hours after DoorDash almost doubled from its listing price in its debut trading session, adding to a flurry of consumer-facing web-based companies going public this month. Airbnb and its investors sold about 52 million shares Wednesday for $68 each after marketing them for $56 to $60 apiece. At that price, Airbnb has a fully diluted value of about $47 billion, which includes employee stock options and restricted stock units.

5. Morgan Stanley to Shift About $120 Billion of Assets to Germany

Morgan Stanley plans to move about 100 billion euros ($120 billion) of assets to Frankfurt, the latest Wall Street bank to shift business away from the U.K. The U.S. lender expects to transfer the bulk of the assets in the first quarter of next year when the transition period for Britain’s exit from the European Union will likely have elapsed. They will sit in the Frankfurt-based subsidiary Morgan Stanley Europe SE. The move is in line with efforts by several other U.S. banks such as JPMorgan Chase & Co. and Goldman Sachs Group Inc. to beef up their EU operations amid Brexit. 

6. Fidelity Digital to Hold Bitcoin as Collateral for Cash Loans

Fidelity Digital Assets will allow its institutional customers to pledge Bitcoin as collateral against cash loans in a partnership with blockchain startup BlockFi. The unit of Boston-based asset manager Fidelity Investments will hold the digital asset and not make loans itself. The target is Bitcoin investors who want to turn their digital stash into cash without selling, and potential customers include hedge funds, crypto miners and over-the-counter trading desks. The new service from Fidelity comes after Bitcoin beat its 2017 highest price earlier this month before retreating in recent days. The world’s most valuable digital asset has risen 164% this year, hitting a high of $19,462 on Dec. 3. Other cryptocurrencies like Ether and Litecoin have also seen gains.

7. World’s Second-Largest Cigarette Market Raises Levy by 12.5%

Indonesia will raise the excise duty on cigarette products by an average of 12.5% as the country seeks higher earnings from the industry. The world’s second-largest cigarette market, after China, boosted the levy as it seeks to earn $12 billion in state revenue from tobacco products in 2021, a 5% increase from this year’s target. The industry accounts for a majority of the government’s excise revenue. The higher levies are effective Feb. 1, 2021. While Indonesia seeks to reduce the number of smokers, it’s also mindful of workers who rely on the tobacco industry, which is why it isn’t raising the levy for hand-rolled cigarettes.

8. U.K.-Singapore Sign Free Trade Agreement to Replace EU Deal

The U.K. and Singapore signed a free trade agreement on Thursday, under which companies from both countries will continue to enjoy the same benefits on about $23 billion worth of goods and services they receive under an existing EU-Singapore deal. The signing sustains the two nations’ trade relationship beyond the U.K. departure from the European single market. Under the agreement, duties will remain eliminated on 84% of tariff lines for Singapore’s exports to the U.K.

9. China to Sanction U.S. Officials, Curb Some Diplomat Travel

China said it will sanction more U.S. officials and place new travel restrictions on American diplomats in retaliation for measures taken by the Trump administration over Hong Kong. Chinese Foreign Ministry spokeswoman Hua Chunying didn’t provide specific names of those sanctioned but said they included people in the executive and legislative branches and their immediate families, as well as non-government organizations. China would also revoke visa-free entry to Hong Kong and Macau for U.S. diplomatic passport holders.

10. JPMorgan Says Gold Will Suffer for Years Because of Bitcoin

The rise of cryptocurrencies in mainstream finance is coming at the expense of gold, says JPMorgan Chase & Co. Money has poured into Bitcoin funds and out of gold since October, a trend that’s only going to continue in the long run as more institutional investors take a position in cryptocurrencies, according to the bank’s quantitative strategists. JPMorgan is one of the few Wall Street banks that’s predicting a major shift in gold and crypto markets as digital currencies become increasingly popular as an asset class. The trend poses a problem for bulls in precious metals markets over the coming years if investors move, even a small slice, of their allocations away from gold and into crypto.

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Editorial

The Rise and Fall of Micromax: Are They Coming Back with In?

If you are new to the India smartphone market, you won’t believe it but there was a time when Chinese phones were not respected. They had an image of cheap products which would never last long when compared to the likes of market leaders Nokia and Samsung.

And then, there was a brief time before the Chinese brands entered where the Indian smartphone manufacturing companies disrupted the market. Lava, Karbon and Micromax started winning customers with the help of their customer-oriented products which were relatively affordable with new and ‘cool’ features. Within the Indian companies, it was the Gurgaon-based Micromax which won all the accolades.

Micromax was started by Rajesh Agarwal, Vikas Jain, Rahul Sharma and Sumeet Kumar in the early 2000s. The company used to build specialized hardware for Nokia and Airtel. Realizing the massive potential of the smartphone market in India, Micromax forayed into the mobile phone business in 2008. After entering the market, Micromax rapidly made a space within the hearts of customers. If you are currently 20-30 years old, there is a high probability that you too owned a Micromax phone at some point in your life.

Unfortunately, these brands followed the strategy of outsourcing mobiles from China, rebranding and selling them in the Indian market for huge profits. Due to better technology and cheap labour presence, almost all the manufacturing took place in China. Micromax revolutionized the Indian mobile market with touch-screen handsets with dual-sim availability. This is present in every device now, but back then, this was termed as a premium phone.

In 2014, it displaced Samsung from the top to become the country’s largest smartphone maker. They were also slated to become a major smartphone brand in the world by volume. But then, Chinese companies started noticing this. Anyway companies like Micromax are just selling rebranded Chinese phones, so why can’t they directly enter the Indian market. And thus, high competition from Chinese counterparts put Indian brands into a corner of the market. By the end of 2019, Micromax lost 90% of its value.

The Indian Flag-Bearers

Micromax mobile phones were loved in the Indian market. This was because people were getting a lot of value from the device at a cheaper price. The number of features offered at such low prices attracts the customers. Secondly, Micromax was an Indian brand. People had a strong affinity towards them at a time when Samsung and Nokia were leading the market. Micromax ventured into the Android space with their Canva Series which became an instant hit. Micromax smartphones also had 3G support, which was not widely available in Nokia or Samsung phones of similar price. But Indian consumers did not really know, nor did they want to, that these phones were all from China.

In 2013, the company was rich enough to sign Hugh Jackman as their brand ambassador. That was the year when one of his biggest movies, Wolverine, was launched. With such a big face promoting their products, Micromax was ready to expand further into a global brand. 

By the end of 2014, Micromax was valued at Rs 21,000 crore. Imagine an Indian startup having such high value that they even approached tech giants like Alibaba and Softbank for the stake sale. It was reported that Alibaba was thinking of acquiring 20% of the stake. But that deal went off as the two companies “disagreed on a future roadmap.” This was an amazing 5 years for the Gurgaon-based company but things were deemed to change drastically.

The Flood of Chinese smartphones

Soon, the company reached the top of the ladder in the Indian smartphone market. They were the largest seller of mobile phones in India, taking the crown away from Samsung. Also, Micromax was named the 10th largest smartphone manufacturer worldwide. Micromax poured a huge sum of money into marketing. Getting Hugh Jackman on-board meant pushing out a lot of money. Followed by that, Micromax sponsored a lot of events like the concert of Canadian singer Bryan Adams. They also sponsored the international cricket tournament; The Asia cup.

After getting a huge share of the mobile market, Micromax added more electronics in their portfolio. They were making televisions and air-conditioners to gain the overall control of the electronics market. Everything was going great for the company but this all changed with the advent of Chinese counterparts in 2015.

Chinese manufacturers started to see the huge unexploited potential of the Indian market. Companies like Xiaomi, Vivo, Oppo and OnePlus disrupted the whole Indian smartphone market. These Chinese smartphone manufacturers have a huge advantage over Micromax. They were robust enough to design, develop and manufacture the components and the whole device. They didn’t have to depend on any other company to do that. Thus, this helped them to cut the cost of production, add more features and provide a better handset and experience to the Indian customers. 

Micromax failed to respond to the competition. They did not invest in Research & Development (R&D) and failed to set up their own robust large-scale manufacturing facility. Tensions within the management arose which pushed many senior members to quit the company. Soon, they found huge inventory piled on their warehouses which forced them to stop making the handsets altogether. With poor after-service, customers started losing the love and respect they once had for the Indian company. 

Another target of Jio 4G

There’s another factor which led to this downfall. The introduction of Reliance Jio 4G. Micromax had 40 different mobile phones but all were based on 2G-3G technology. Jio came up with 4G data which was offered to the customer at no cost. People found out how beneficial the fast internet is. Now, the issue for Micromax was that the Indian market was moving towards the 4G network which cannot be run on their 3G handsets. Thus, people were buying only those handsets which support 4G.

Just like they were late to react to Chinese companies, Micromax was again late to understand the shift from 3G to 4G. By the time they recognize the situation, they already have a huge pile of inventory with 3G phones. Poor marketing, failure to understand the changing dynamics of the Indian market and being late to react to the competition led to the downfall of India’s biggest smartphone company.

The Rise Again?

Rahul Sharma, the owner of Micromax has stated that the company is ready to make a comeback. The company is banking on the anti-China sentiments to improve their reputation. Since the last 6 months, there has been a public outrage against the Chinese products. You must have seen or heard the instances of people throwing away their Chinese TV sets or mobile handsets. 

The Prime Minister of India also gave the new slogans like “Atma Nirbhar Bharat” and “Vocal for Local”. Through this, he is trying to instil a belief within the public to buy goods which are made in India. Micromax decided to catch this opportunity and is launching its new “In” series. Needless to say, this “In” comes from “India”. Through this, the company is trying to show the public that the goods are manufactured in the Indian region and not in China anymore.

Apart from the anti-China sentiments, Micromax is also banking on the Production-Linked Scheme for the Indian smartphone segment. To make India a global electronics manufacturing hub, the national government has rolled out a Rs 41,000 crore Production-Linked Incentive (PLI) scheme. The more the company produces as compared to the previous year, the more it is eligible for the financial benefits from the government. 

The way forward

This “In” series will have products ranging from Rs 7,000 to Rs 25,000. Through this, they will be directly competing with an ocean of companies offering products from Rs 7,000 to Rs 15,000. Also, they will lock horns with the likes of Samsung and OnePlus who have a stronghold with products ranging within Rs 20,000-Rs 30,000.

Apart from this, Micromax will also invest Rs 500 crores in the country in the next 12 to 18 years. This money will be used in R&D, marketing, and manufacturing. Also, a part of the funds will be used to fund the growth of start-ups which can later grow and aid Micromax.

Getting to the top of the ladder is one thing, staying there is another. It was a decade of two contrasting halves for Micromax. Micromax is surely working on the shortfalls they faced last time. But the smartphone market is very dynamic. It requires companies to stay ahead of the curve. Will Micromax be able to reclaim its lost glory? Can they find a way back “In” to people’s hearts?

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Jack Ma to become 11th Richest Man after Ant IPO – Top10 Global News

1. Stocks Slump on Rising Covid Cases; Dollar Gains

U.S. equities slumped along with European shares on concern that rising coronavirus cases will weaken the global economy and as prospects dimmed for fiscal aid from Washington before the presidential election. Energy and materials companies were among the worst performers on the S&P 500 Index. In Europe, a gauge of tech stocks fell the most since March after German software maker SAP SE plunged 20% following a cut to its revenue forecast and warnings that the pandemic will hurt business through mid-2021. Boeing Co., Lockheed Martin Corp. and Raytheon Technologies Corp. slid on China’s plan to sanction the companies after the U.S. approved $1.8 billion in arms sales to Taiwan last week.

The S&P 500 Index decreased 0.9% as of early morning New York time.

The Stoxx Europe 600 Index fell 1.1%.

The MSCI Asia Pacific Index dipped 0.3%.

2. China to Sanction Boeing, Raytheon Over U.S. Arms Sales to Taiwan

China will impose unspecified sanctions on Boeing Co.’s defense unit, Lockheed Martin Corp. and Raytheon Technologies Corp. after the U.S. State Department approved $1.8 billion in arms sales to Taiwan last week. The sanctions will be imposed “in order to uphold national interests,” Chinese Foreign Ministry spokesman Zhao Lijian told reporters Monday in Beijing. The action follows the U.S. State Department’s approval last week of $1.8 billion in sales of new weapons for Taiwan and submission of the package to Congress for a final review. The deals, and an earlier one involving Lockheed F-16 fighters, are taking place amid rising tension between the superpowers ahead of the U.S. election next week. 

3. Pelosi Awaits Virus Stimulus Offer Today as Hope for Vote Fades

The three months of squabbling over a new round of virus relief moved no closer to a resolution over the weekend, all but extinguishing the prospects of a stimulus bill being written, voted on, and signed into law by President Donald Trump before the election. House Speaker Nancy Pelosi said she’s waiting for another counter-offer on Monday from Treasury Secretary Steven Mnuchin, as she and White House Chief of Staff Mark Meadows accused each other of “moving the goalposts” in negotiations. Much of the weekend was devoted to work by congressional committees with the goal of writing legislation, but aides in both parties said little progress was made despite the pledges from both sides that they want to quickly deliver $1,200 (89,000 INR) stimulus payments to most Americans along with aid to struggling businesses.

4. Europe Struggles to Regain Control from Second Covid-19 Wave

Europe took a step closer to the strict rules imposed during the initial wave of the pandemic, with leaders struggling to regain control of the spread while confronting growing opposition to restrictions. The Czech Republic — the European Union’s worst hot spot — and Poland signaled more curbs may be near, and Belgium is mulling a lockdown. AstraZeneca said its vaccine candidate produced a robust immune response in elderly people, while Johnson & Johnson said the first batches of its shot could be available in January. Both companies are resuming trials that had been paused due to safety concerns. U.K. Health Secretary Matt Hancock said his “central expectation” is there will be a vaccine to roll out in the first half of 2021. The World Health Organization’s director general said some countries in the northern hemisphere are facing a “dangerous moment.”

5. Dubai announces $136 million extra stimulus package

Dubai has announced a new 500 million dirhams (INR 1000 cr) stimulus package to support the local economy, taking Dubai’s total stimulus measures this year to 6.8 billion dirhams, the crown prince of the emirate said on Twitter on Saturday. “The private sector is a major partner in Dubai’s development process, and we have adopted a set of new exemptions for some fees and a reduction in rents for some sectors, as well as an extension of the validity of a previous set of exemptions from fees,” said Hamdan Bin Mohammed Al-Maktoum.

6. U.S. appeals WTO ruling on its multi-billion tariffs on China

The United States lodged an appeal on Monday against a WTO ruling last month that found U.S. tariffs imposed on China in 2018 breached global trade rules, a World Trade Organization (WTO) official said. A three-person panel had ruled that U.S. had not justified why the tariffs imposed after a Section 301 investigation against China were a justifiable exception to its obligations. The U.S. delegation, in a speech seen by Reuters announcing its appeal, said that the panel report “reflects a major, missed opportunity for the WTO to begin to address the most serious problem faced by every member that seeks a balanced and fair world trading system: namely, aggressive, state policies that seek to dominate broad industrial sectors.”

7. Fiat, PSA to win EU approval for $38 billion merger

Fiat Chrysler and PSA are set to win EU approval for their $38 billion (INR 2.8 lakh cr) merger to create the world’s fourth-largest carmaker, as they strive to meet the industry’s dual challenges of funding cleaner vehicles and the global pandemic. The green light from the European Commission would formalise the creation of Stellantis, a carmaking group that could tap hefty profits from selling RAM pickup trucks and Jeep SUVs to U.S. drivers to fund the expensive development of zero-emission vehicles for sale in Europe and China. The all-share merger announced late last year would unite brands such as Fiat, Jeep, Dodge, Ram and Maserati with the likes of Peugeot, Opel and DS.

8. Bond Defaults Deliver 99% Losses in New Era of U.S. Bankruptcies

Bankruptcy filings are surging due to the economic fallout of Covid-19, and many lenders are coming to the realization that their claims are almost completely worthless. While few could have foreseen the pandemic’s toll on the economy, the depth of investors’ pain from corporate distress was all too predictable. Desperate to generate higher returns during a decade of rock-bottom interest rates, money managers bargained away legal protections, accepted ever-widening loopholes, and turned a blind eye to questionable earnings projections. Corporations, for their part, took full advantage and gorged on astronomical amounts of debt that many now cannot repay or refinance. It’s a stark reminder of the long-lasting repercussions of the Federal Reserve’s unprecedented easy-money policies. Ultralow rates helped risky companies sell bonds with fewer safeguards, which creditors seeking higher returns were happy to accept. Now, amid a new bout of economic pain, the effects of those policies are coming to bear.

9. Jack Ma Wealth Surges Above Walmart Heirs’ With Record Ant IPO

Jack Ma, the former English teacher who co-founded Alibaba Group Holding Ltd. is poised to become the world’s 11th richest person after Ant Group Co. priced shares for a record IPO. Ma’s 8.8% stake is worth $27.4 billion based on the stock pricing in Hong Kong and Shanghai. That will take the 56-year-old’s fortune to $71.6 billion (INR 5.3 lakh cr) on the Bloomberg Billionaires Index, exceeding that of Oracle’s Larry Ellison, L’Oreal’s heiress Francoise Bettencourt Meyers and individual members of the Waltons, whose family own Walmart Inc. Ant’s mammoth listing is poised to boost the fortunes of a group of early investors and employees. The company has granted staff share-based awards since 2014 and at least 18 other people have become billionaires from the IPO.

10. Brexit decision entirely separate from U.S. election outcome

Britain’s decision on whether to agree a Brexit deal with the European Union is entirely separate to the outcome of the U.S. election next month, Prime Minister Boris Johnson said on Monday.

“The two things are entirely separate,” Johnson said, when asked about an Observer newspaper report that he was waiting to see the U.S. result before making a Brexit decision, and whether he was concerned about the prospect of a Joe Biden presidency.