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House committee passes broad tech antitrust reforms

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A House committee passed a series of sweeping antitrust reforms Thursday after roughly 23 hours of debate.

While the advancement of the six tech-focused bills considered by the House Judiciary Committee beginning Wednesday is a victory for the bipartisan members who introduced them, the markup surfaced rifts within parties that could ultimately hamper the bills’ chances of becoming law.

Several lawmakers made it clear they thought the process from introduction to markup in less than two weeks felt rushed, despite a lengthy investigation preceding the bills. Some said they hoped to see further changes before the legislation reaches the House floor.

Still, the last leg of the debate offered some signs of optimism for those hoping to advance the bills further. Fresh from a recess after passing the fifth bill after 5 a.m. on Thursday, lawmakers returned to the committee room to discuss the Ending Platform Monopolies Act around 11:30 a.m.

The bill — sponsored by antitrust subcommittee Vice Chair Pramila Jayapal, D-Wash., and co-sponsored by Rep. Lance Gooden, R-Texas — would prevent dominant platforms from owning business lines that present conflicts of interest, such as by incentivizing them to favor their own products over rivals’ dependent on their services.

The bill was one of the most aggressive in the package, which also included updates to merger filing fees for dominant platforms, a shift of burden of proof in acquisitions and provision to let state attorneys general have more say in the venue of their antitrust cases. It could essentially force break-ups of businesses like Amazon and Apple, which both sell products or services on their own marketplaces that also serve third-parties. Both stocks closed slightly lower for the day.

Despite the major implications of the bill, it was not the most controversial of the bunch. Lawmakers spent much longer arguing over the data portability mandate under the Access Act as they assessed potential security issues, for example.

Jayapal’s bill also inspired lively debate. Ultimately, the vote fell along similar lines as the others (it passed 21-20, supported by Democrats and Reps. Ken Buck, R-Colo., and Matt Gaetz, R-Fla., and opposed by Republicans backed by Rep. Greg Stanton, D-Ariz., and California Democrats Lou Correa, Zoe Lofgren and Eric Swalwell). But throughout the discussion, it was clear many in the group broadly agreed with the principles of the bill, even if they felt it could use some fine-tuning.

“I will tell you, I’m not 100% there to break up Big Tech, but I’m close,” said Rep. Dan Bishop, R-N.C. “And this is the bill that if it were done right, would be the vehicle to put that on the table.”

Though an amendment he introduced failed, antitrust subcommittee Chairman David Cicilline, D-R.I. and Jayapal expressed a willingness to work with Bishop on potentially including a nod to his idea in the bill. Bishop essentially sought to try to expedite antitrust cases to the courts by removing a regulatory step. Cicilline had called it “the most interesting amendment of the markup” even though he did not support it, and Judiciary Committee Chairman Jim Jordan, R-Ohio called it “the amendment.”

In an interview after the markup on Thursday, Buck, the ranking member on the antitrust subcommittee who supported the legislation, told CNBC he expects more work will be done before the bills move forward.

“I don’t think the bills are going to be on the floor for a couple of months because of the August recess, so I think that the opportunity to work together is certainly there,” he said.

It’s clear that even after such a long debate, the bill authors still have a lot of work to do. After the markup adjourned, bipartisan members of the California delegation on the committee released a joint statement, urging further revision to the bills despite their passage from the committee. They also said the committee members did not have enough time to properly consider the bills prior to the markup.

“The bill text as debated is not close to ready for Floor consideration,” wrote Correa, Swalwell, Lofgren and Reps. Darrell Issa, R-Calif., and Tom McClintock, R-Calif. “We urge the sponsors of the bills to take the necessary time, commit to a comprehensive approach, and work with their bipartisan colleagues of this Committee to address the concerns articulated during markup to further develop these bills.”

Buck responded to criticism from his colleagues who felt they didn’t have enough time to review the bills, saying “it’s a common objection” but that “the ideas in the bill were summarized in reports that were written last October.”

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More money chases Indian tech start-ups as investors shun Chinese names

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Zomato food delivery partners is seen on a road in Kolkata , India.

Debarchan Chatterjee | NurPhoto | Getty Images

At a time when investors are selling Chinese technology stocks, more money is chasing Indian start-ups.

Shares of food delivery app Zomato soared as much as 82% in their debut Friday on the National Stock Exchange of India. The initial public offering was priced at 76 rupees per share, or a little more than $1 per share. The stock opened more than 50% higher, valuing the company at about 910 billion rupees or $12.2 billion.

Jayasankar Venkataraman, head of equity capital markets at Kotak Investment Banking, said before trading started that the IPO was oversubscribed for institutional and retail investors.

“I think Zomato’s successful IPO might open the floodgates,” said Anirudh Suri, founding partner of the India Internet Fund. Suri has invested in 20 start-ups across India.

Tech giant Uber sold its India food delivery business to Zomato last year in an all-stock transaction that gave the U.S. company a stake. Zomato’s other prominent backers include Indian internet company Info Edge, Alibaba-affiliate Ant Group and Singapore state investor Temasek.

Sources told CNBC that after listing in India, Zomato has plans to make its debut in the U.S.

As to which companies will be next to go public, Suri said he’s betting on Paytm, which claims among its backers Japan’s SoftBank, Ant Group and Berkshire Hathaway.

India payments company Paytm recently filed its IPO paperwork with a goal of raising $2.2 billion in its public debut this November.

Overall, Indian start-ups raised $12.1 billion in funding in the first six months of the year, compared with the $5.3 billion raised during the same period last year, according to Venture Intelligence.

What’s behind the recent pivot to India?

Somesh Dash, general partner at venture capital firm IVP, said that investors are waking up to the idea that China no longer has the best growth story in town.

“China doesn’t have a lot of young people. India does. What the Indian economy presents is a growing middle class and a dynamic workforce: one of the largest populations in the world. It’s very attractive from a longer-term perspective,” Dash said.

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Amit Anand, co-founder of exchange-traded fund company NextFins, expects Indian tech IPOs to price at a premium multiple compared with Chinese companies, citing growth in internet penetration.

“Investors recognize the long runway for internet penetration. E-commerce penetration in India is 7% versus 25% in China. Smartphone penetration in India is about 30%, less than half of China’s 60%,” said Anand, who formerly worked for Axial Capital.

Anand and his partners at NextFins launched the Nifty India Financials ETF on the belief that investors will want more exposure to India’s secular growth story, especially as internet and smartphone penetration continue to rise. INDF’s assets have tripled since the beginning of the year and are up 50% since June.

“Investors are betting that as these people enter the workforce, they will consume more and need financial products like credit cards, mortgages and auto loans. That’s why e-commerce and fintech companies have been the primary recipients of venture capital investment in India,” noted Anand. With more tech companies going public in India, he now has plans to launch an ETF focused on Indian tech stocks.

“The tech indices in India currently track the large outsourcing companies; there is no way for investors in either India or the U.S. to target faster-growing internet companies,” he said.

Some of the country’s unicorns, those companies worth $1 billion or more, continue to raise additional rounds, capitalizing on the strong interest in India tech. Hotel start-up Oyo, backed by SoftBank, raised an additional $660 million. E-commerce platform Flipkart raised $3.6 billion at a mega-high valuation of $37.6 billion, the largest fundraise for an Indian company. Key investors include the Canada Pension Plan Investment Board and Walmart.

Like China, data privacy issues do exist in India. Last week, Indian regulators banned Mastercard from issuing new credit cards to customers in the country after not complying with data privacy rules. Key question venture investors are trying to answer are whether India’s government will carve out its own path or follow China’s lead on the topics related to regulation and overseas listings.

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Asia-Pacific stocks set for mixed start after Wall Street record close

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SINGAPORE — Shares in Asia-Pacific looked set for a mixed start after the major indexes on Wall Street sailed to record closing highs last week.

Futures pointed to a higher open for Japanese stocks. The Nikkei futures contract in Chicago was at 28,230 while its counterpart in Osaka was at 27,910. That compared against the Nikkei 225’s last close at 27,548.

Australian stocks, on the other hand, looked poised to open lower. The SPI futures contract sat at 7,335.0, against the S&P/ASX 200’s last close at 7,394.40.

On the economic data front, Singapore’s industrial production figures for June are set to be out at 1:00 p.m. HK/SIN.

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On Friday, the Dow Jones Industrial Averaged closed above 35,000 for the first time ever while the S&P 500 jumped 1.01% to 4,411.79 and the Nasdaq Composite gained 1.04% to 14,836.99. Friday’s moves upward saw all three major indexes stateside at new closing highs.

Currencies

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.885 following a recent bounce from below 92.8.

The Japanese yen traded at 110.53 per dollar, weaker than levels below 110 seen against the greenback last week. The Australian dollar changed hands at $0.7368, above levels below $0.732 seen last week.

Here’s a look at what’s on tap:

  • Singapore: Industrial production for June

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Stock futures hold steady ahead of a huge week of Big Tech earnings

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Traders working at the New York Stock Exchange (NYSE), today, Wednesday, April 21, 2021.

Source: NYSE

Stock futures opened little changed after the major averages finished the previous session at record closing highs and ahead of a busy week of earnings reports from technology’s heaviest hitters.

The Dow Jones Industrial Average eased by 5 points, or 0.01%. S&P 500 and Nasdaq 100 futures dipped 0.03% and 0.01%, respectively.

In the previous session, the Dow jumped 238.20 points, or 0.68%, to 35,061.55. The S&P 500 gained 1.01% to 4,411.79 and the Nasdaq Composite climbed 1.04% to 14,836.99.

All three of the major averages finished at record closing highs last week after the markets tumbled at the start of the week on concerns about the spread of the delta variant of Covid and how it would potentially hinder the economic recovery. The uncertainty briefly sent bond yields lower, and investors jumped into tech stocks. Both bonds and equities rebounded quickly by the end of the week.

Tech stocks rose last week on better-than-expected second-quarter earnings reports, as well as the continued spread of the delta variant. Twitter and Snap each surged Thursday following better-than-expected second-quarter earnings reports. Twitter ended Friday 3% higher, while Snap shot up 24%.

One of the busiest weeks of earnings reports is on deck in the week ahead, with Tesla kicking it off after the closing bell. Last week, CEO Elon Musk said the automaker would likely start accepting bitcoin for vehicle purchases again.

Big tech giants Apple, Alphabet and Microsoft are all set to report on Tuesday, and Google, Facebook, and Amazon will also report later in the week.

Investors will be watching the Fed’s two-day policy meeting, beginning Tuesday. The Federal Open Market Committee and the Board of Governors are expected to issue a statement on the stance of monetary policy Wednesday. On Thursday the Commerce Department will report second-quarter GDP data.

On Monday morning the U.S. Department of Housing and Urban Development will release new home sales data and the Federal Reserve Bank of Dallas will release its monthly business activity index for manufacturing in Texas.

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