August 5, 2020 Dose 28

The Capsule

Our heart goes out to the people of Lebanon today…

TOP STORIES

The Indian Meteorological Department issued a red alert for heavy rainfall in Mumbai

The trials of two COVID-19 vaccines by Bharat Biotech proceed to phase II

DST Global looks to invest $400 million in online education startup Byju’s. This will increase its valuation to $10.5 billion - making it the 2nd most valuable startup in the country

Export revenue has rebounded with ~0.6% growth YoY in July 

China's Yabang group will invest $300 million in textile and chemical industries in Bangabandhu Industrial City

Countrywide restrictions on public activities and movements extended till August 31

Inflation surged to 9.3%

So what: Inflation refers to the general increase in prices of commodities and services over a time period. It is measured using the consumer price index (CPI), which is the weighted average of prices in a basket of goods and services. While various effects come along with high inflation, it primarily reduces the purchasing power of a currency. Fearing increased prices in the future, consumers might spend more now. This might cause a shortage of money supply in the economy, further depreciating the currency and creating a dangerous loop of increasing inflation. Our Prof. Dev. section has covered the method to calculate inflation in a previous issue

The 2020 parliamentary elections are underway

Digging deeper: The country's political future is in the hands of more than 16 million eligible voters. 113 seats are needed for a majority in the parliament. The two main parties are Sri Lanka Podujana Peramuna (SLPP) and United National Party (UNP). The Rajapaksa family controls the former with President Gotabaya Rajapaksa looking forward to an outright win given fractures within the opposition. He, along with his two brothers, seek to amend the constitution and restore presidential powers.

Sugar shortage jacks up prices

MARKET INDEX

SOUTH ASIA

TODAY

1-DAY

YTD

DSEX

4,299

+0.64%

-3.46%

SENSEX

37,688

+2.03%

-8.85%

KSE100

27,656

-0.86%

-33.20%

CSE

5,167

+0.83%

-15.35%

GLOBAL

S&P

3,307

+0.36%

+1.49%

FTSE

6,036

0.05%

-20.62%

OIL

44

-0.20%

-33.07%

GOLD

2,012

+0.95%

+32.43%

TECHNOLOGY AND STARTUPS

Google's newly launched Pixel 4a coming to India in October

Greg Joswiak will replace longtime chief Phil Schiller as head of Apple marketing

Microsoft's xCloud game streaming will launch on September 15 for Android

A startup you should follow: Check out Shef. Based in California and NYC, they deliver traditional home-cooked meals right to your doorstep. Missing your mom's chicken curry? Don't worry, one of the shefs will soon satiate your appetite. Because like us at The Capsule, they know too: there's no taste like home.

SPORTS CORNER

Real Madrid legend Iker Casillas announced his retirement

Chinese phone maker VIVO pulled out as sponsors of 2020 IPL after public backlash

PROFESSIONAL DEVELOPMENT

The Consulting Case Interview (part 1 of 4)

If you are interested in a career in consulting, you might have already heard about case interviews. The format usually follows a hypothetical business situation, and the interviewer judges how you think about the problem and its solution. To get started, familiarize yourself with the basic types of consulting cases:

  1. Profitability (most common) - Issues around maximizing profit through product-mix, end-market analysis, growth comparisons etc. Interviewees usually examine both top-line (sales) and bottom-line (profits) to tackle a root cause.
  2. Cost Reduction - Understanding cost structures i.e. fixed vs. variable, and suggesting improvements.
  3. Market Entry - Commencing operations in a new market e.g. Is it worth it? Do the returns justify the risks? What is the best market among multiple options and why? 
  4. Growth - Increasing revenue for an existing business e.g. new products in an old market? Old products in a new market? 
  5. M&A - Mergers and Acquisitions -- Should you buy company A? Should you sell business segment B?   
  6. Market Sizing - Finding the total number of buyers of a product or service in a market; this is often a test of your logical process vs. your ability to arrive at an accurate answer.

This list is not exhaustive but provides a well-rounded idea of categories in consulting cases. Keep an eye out for Part 2 in a future dose. 

KEEP IT SHARP

I speak without a mouth and hear without ears. I have no body but I come alive with the wind. What am I?

HERE'S SOMETHING INTERESTING

The Gold Rush

Last week gold prices hit a record high - it escalated ~32% [hint, check out our market index ;)] in 2020. 

Here is why prices are soaring:

It’s a classic example of a “flight to quality” - when the world becomes uncertain (e.g. 2008 financial crisis, COVID-19 breakouts), it’s seen as a safe place to take refuge in. Most central banks have reduced interest rates in a bid to increase consumption resulting in a decrease in fixed income yields (government bonds). Some fear inflation trends might deteriorate this further prompting them to buy Gold instead.

If there is a strong possibility of a stock market collapse, people are more likely to seek some sort of insurance i.e. “safe haven” against the market's volatility. Added with minimal political risk (i.e. a single government has little power over its value), Gold can be a sound investment for many as part of a balanced portfolio. Disclaimer: The Capsule is not a registered investment adviser.

OF ART AND ARTISTS

If you've seen the "little girl crying in the washer" picture circulating through the web, you've seen a peek of Ferdous Tasni's endearing work. The sweet little girl isn't the only cutie patootie she captures. Check out her work here -- photographing adorable newborn babies & toddlers! 

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