A̶f̶g̶h̶a̶n̶i̶s̶t̶a̶n̶
The Afghan government has fallen and the Taliban extremist have taken over the country!
Market Updates
The Sensex Declined 300 points to 55,329 while the Nifty ended at 16,450 (118 points down). Selling pressure was seen in metals, realty, public sector, and industrials while buying was visible in FMCG stocks. All sectoral indices barring BSE FMCG are in red. BSE Metals is the biggest drag.
Hindustan Unilever was the top gainer on Friday. HUL’s market capitalization crossed the Rs 6 lakh crore mark for the first time ever.
Nifty will see the 16,600 and 16,730 levels play out as likely resistance in the coming week while supports will come in at 16,350 and 16,220 levels. Bank Of America Securities India has suggested that Indian Equity markets might see a near-term correction of as high as 9-10%. The market has given almost 120% from the lows of March 2020.
A̶f̶g̶h̶a̶n̶i̶s̶t̶a̶n̶ - Islamic Emirate of Afghanistan
Taliban has captured Kabul, the jewel in every conquest in Afghanistan. It wasn't a surprise for most of us after the Doha agreement between the US and the Taliban. But the pace at which this happened has surprised all of us.
The major reason for the quick pace of the Taliban takeover is more psychological than the actual strength of Afghan National Defence and Security Forces. The national forces were not paid for months, they lacked interconnectivity among themselves, lacked a coordinated strategy of combat and the assassinations carried out by Taliabanis against important figures led to the loss of morale. All of these were on the backdrop that the US had withdrawn their forces from combat and foreign help almost halted after those posts were outrun by Taliban forces.
Many are now blaming Biden for the hasty and irresponsible withdrawal. But the undermining of the Afghan government started from the Doha Agreement itself, US agreed to free prisoners which were under the control of the Afghan government without involving Afghanistan. The main objective of the US, that is, avoiding Afghanistan under the Taliban from supporting terrorist groups which can threaten US security interests seems to be achieved. According to the same agreement, the Kabul airport is under US forces till August 31st from where the military has been evacuating people after commercials flights are banned from the airport.
Regional Security Implications
Pakistan was the first country that recognized the Taliban government in 1996.
The objective of achieving "Strategic Depth" has guided the minds of Pakistan's elites, which also supported the Taliban by giving shelter and funding. Many analysts are predicting a nexus of Pakistan, Afghanistan, and China acting against Indian interests. Definitely, the menace of drugs can get its ugly head, as opium is the main revenue source for the Taliban (lying in the 'Golden Crescent). Also, the terrorist forces can turn towards Kashmir and stir insurgency there as was seen in the last Taliban regime.
In this background, the activities of regional players like, Russia, China, and Iran aim at reducing the fervor of religious extremism which may find safe grounds in Taliban-ruled Afghanistan. China is concerned with the security of Xinjiang province where Uyghurs are in majority and the policies of CPC have backfired leading to the insurgency. The stability of Muslim majority earlier Soviet states in the backyard of Russia is another reason why the Taliban could be recognized by many countries in this phase as compared to earlier when only three countries recognized it.
Indian Stance
The popular opinion in India regarding Indian strategy is, obviously, divided. Many want India to actively interfere in Afghanistan supporting few forces which are resisting the Taliban, especially in the North which has been largely anti-Taliban and was the center of the Northern Alliance led by Ahmed Shah Massoud. There the Vice-President of the Afghan National Government Amrullah Saleh and Massoud are fighting the Taliban and gaining few grounds. The possibility of long-drawn internal conflict cannot be ruled out. But India should learn from the experiences of the "empires" which aimed at controlling Afghanistan for their own strategic interests. It is called "the graveyard of empires" for no reason. Also, the idea that the Taliban will remain a puppet in the hands of Pakistan and support militant and terrorist groups seems unlikely. In this aspect India should work with China and Russia in curbing terrorists under the Taliban; who are likely to support this initiative as, famously Clinton said, you cannot expect to keep snakes in your backyard and expect them not to bite you. Also, there is a possibility of few tensions between Afghanistan and Pakistan going forward. The Taliban may not always take diktats from Rawalpindi once they've consolidated their power. Also, the Durand Line was never acceptable to Afghans and may lead to border problems, a legacy of colonialism in the subcontinent.
Thus, the best thing India can do right now is Wait and Watch!
Rise of Neo Banks in India
Have you had an encounter with Twitter or Instagram ads of NiyoX or Fi recently? Well, get ready for more such ads, because the Neo Banks revolution is here!
What exactly is Neo Banks?
A bank that operates only in an Online-only mode is termed a Neo Bank. They do not have any physical branches, but they provide almost all kinds of services that a traditional bank will provide. Don't confuse them with digital banks, a digital bank is a subsidiary of an existing bank providing online banking solutions, but a Neo Bank operates in an online-only mode without any physical locations!
Neo Banks and India
Neo Banks are not new to India, some banks are even a decade old! So, what's the hype around them recently?
In recent years the tech-savvy crowd has grown exponentially, and so have the tech-savvy products. We have an app to order food, to pay bills, to trade, so why not an app with complete banking solutions? Imagine having a hassle-free process of various banking transactions at the tip of your fingers! Seem's like a fantasy but not anymore!
NiyoX, Fi, PayTM Payments Bank, Jio Payments Bank, are just a few of the many players trying to capture the GenZ customer base who want to have a hassle-free banking experience!
It's not just about the experience, they offer with the eye-pleasing UI, but the features too! For example, Fi offers transaction tracking and analysis and gives you great insights on where are you spending and what are your spending trends, NiyoX offers a staggering 7% interest rate on a Savings bank account (if the balance is above 1 Lakh).
With the likes of Jio and other Indian giants also rolling up their sleeves to enter the banking sector one can only expect to see more and more lucrative features and offers to come our way!
The Big Problems!
Financial fiascos are not new to India Yes Bank and PMC Bank being the recent ones, their customers suffered the most! And as result gaining the trust of an Indian customer who will give you his/her hard-earned money is very difficult. Especially when the bank does not even exist physically!
Consequently, the RBI has some tight rules and regulations related to online financial services, which also might prove to be an obstacle for the Neo Banks revolution.
In all Neo Banks can truly change our banking experience, but gaining Indian customer's trust is going to be a challenge for them!
What do you think should these entities do to gain our trust?
Super Race of Super Apps !!
The era of super apps in India has arrived.
Earlier we only had Paytm acting as a super app but now Reliance, Tata and Adani are also stepping into the game.
Why this race for Super app?
Most probably to create a monopoly. If you carefully look at the names of competitors, you will realize that they are a few of the oldest businessmen in India and they want to capitalize on the multi-billion dollar consumer market of India.
Tata Digital is on a spree to acquire startups and buy majority-controlling stakes in some of them. It includes Big Basket, Urban Ladder, Cult.Fit, Pharmeasy, and many others.
On the other hand, Reliance is leaving no stone unturned to add more companies to its portfolio under the brand name of Jio.
Paytm was already a super app and it offered multiple services on its platform and moreover, it is looking forward to the largest Indian IPO.
We are really excited to see how the race of super apps turns out and the question which arises is: Will this be beneficial or not? Answer this question in the comments and let us know what you think about this.
Tweet of the Week
Ankur Warikoo is an entrepreneur, mentor, and Angel investor who actively creates content on various platforms around investing, career, and life, do check out his Twitter if you haven't!
Book of the Week
Hooked - How to form habit-forming products by Nir Eyal
How do successful companies create products people can't put down?
Why do some products capture widespread attention while others flop? What makes us engage with certain products out of sheer habit? Is there a pattern underlying how technologies hook us?
Hooked is based on Eyal’s years of research, consulting, and practical experience. He wrote the book he wished had been available to him as a startup founder – not abstract theory, but a how-to guide for building better products. Hooked is written for product managers, designers, marketers, startup founders, and anyone who seeks to understand how products influence our behavior.
If you are someone who is building a product or startup it's a book you can not miss!