Weekly Market Links [06-12 Sep 2021] - China Wrests Control From Didi, Netherlands Bans Foreign Property Investments, Patrol Bots In Singapore
More country-level updates today. We’re also going to try something different - more memes, and less words - would this be more digestible for you? Let us know in the comments or via DM!
Note: You may realize that the vaccination schedules appear intermittently every week. There have been data issues with “Our World In Data”, where some countries are being delayed by at least 2 days. Based on subscribers’ interests, we’re going to remove the vaccination schedules update.
Countries
USA
The US begins mandating vaccinations in response to vaccine-refusers (I won’t use the popular term!) - though a portion of the workforce that are self-employed / in gig-work may not be covered.
In President Biden’s plan, only employers of 100 or more are covered, though it would be gig workers and the small businesses who would benefit the most when they take time-off for a vaccine. From 2017 data, at least 34% of the US workforce are classified as gig workers.
It would also be important to see how the reactions of Americans would be to mandated vaccinations, especially if establishments such as restaurants and malls use this to turn away the unvaccinated.
Additionally, companies that do not comply with the vaccines or tests can be fined up to $14K per violation, to be confirmed in October.
China
Has “proposed” investing in Didi, which would give the Chinese government control of the ride-hailing company under deal terms.
This is via a ‘golden-share’ mechanism with vetoing powers and a board seat.
This is likely not just a proposal, but a forced one to comply, else be shut down.
China also looks increasingly inwards, as it sets up another stock exchange specifically for its SMEs.
As of now, it is unknown if this will be open to foreign capital. This should be closely monitored to know if China will want more local investor participation and to cover their fundraising and if it bodes for a big shift in their foreign direct investment strategy.
Europe
The Netherlands is planning to ban foreign investors from buying any property.
The government acknowledges the difficulties in finding homes in the Dutch market
For context, 30% of homes sold in the 4 largest cities were bought by investors.
South Korea
The last two weeks have seen the South Korean government targeting big tech companies outside their borders. Now, even homegrown companies such as Naver (behind the LINE messaging app) and Kakao, are in the gunsights.
These two Korean tech companies effectively have a duopoly in South Korea, ranging from e-commerce, ride-hailing, fintech and more.
Proposals are being written to reduce their dominance over markets, giving opportunities for upstarts and other players room to compete.
Singapore
Robot patrols have begun in Singapore, finding errant behaviours amongst citizens, such as illegal smoking, hawking, or motorcycle/scooter riding on walkways, and especially for COVID, group size limits.
From Straits Times Singapore website
Australia
Australian police have bolstered powers for conducting “online surveillance, data interception and altering data”.
The bill reads:
Allowing authorities to ‘disrupt data by copying, deleting or modifying data as they see fit’;
Allow collection of intelligence from devices or networks that are ‘used, or likely to be used, by subject of the warrant’;
Letting agencies ‘take control of an online account (such as a social media account) to gather information for an investigation’;
There is also an emergency authorisation use that permits these activities without a warrant. Scary stuff.
The amount of regulatory changes these weeks…
In addition, users themselves will be held liable for all comments under their own posts.
The Australian High Court has deemed users to the publisher, and thus responsible for all communications in that channel.
This article seems highly critical, but it would be worth following to see Australia’s stance on regulating the users, and not just the platforms.
Companies
Apple
Previously covered in the NVDA stock geekout (article and in depth analysis here), Apple is now exploring an alternative to the ARM architecture.
This is a clear sign Apple wishes to be wholly independent of ARM, and presents revenue and opportunities lost to NVDA should their acquisition go through.
Other tech companies such as Facebook, Amazon, Tesla, Baidu, are also having similar roadmaps. This is to reduce the dependency on suppliers and consolidate their tech advantages.
We may witness an inflection point whereby tech giants’ hardware and AI capabilities exceed that of the traditional chipsets, leading to greater advantages, making it difficult for new players to attempt to copy similar AI services.
This is just for AI - hardware has its own level of complexity which also goes beyond ‘white labelling manufacturing methods we see today.
Alibaba
In China, regulations are now taking aim at algorithms - this is critical for any platforms in general, in particular e-commerce.
A common model is for recommendation engines to show you what you may like to buy with your current basket, or based on your past purchases, what you may buy next.
Text, colour, price and categories are important data points. If these are altered or changed, the consumer’s propensity to buy can be reduced significantly, as studies show. Example reading material here.
If the Recommendation Models are altered, it will have a material impact on conversions, thus impacting sellers who had hopes of gaining access to a large buyer market.
It would be interesting to see whether this also applies to international commerce - if true, we may see Alibaba getting affected most of all as it would seriously hamper its global e-commerce plans.
Industries
Internet
Teaming up with KDDI, SpaceX will rollout high-speed wireless in Japan by end of the year.
This is specifically for offering internet services to customers in “mountainous regions and islands for no additional charge”, and serve as “backup…during natural disasters and blackouts”
Rakuten, the largest e-commerce player in Japan, also have their own 5G capabilities, but satellite-based wireless would only be ready in the next year.
SpaceX, helmed by Elon Musk, is proving to be disruptive as ever across the globe, akin to Amazon and existing business models.
Crypto
Ripple, with their XRP offering under a lawsuit, may have to admit they were trying to get the offering compliant under securities law before, in addition to the SEC claiming Ripple (defendants) had an incorrect reading of the law.
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