You Can Bet On Hundreds Of Stocks or Just On Gold
Gold has hit a fresh high, crossing $3,900 per ounce on Monday. Futures are quoting higher
On Episode 696 of The Core Report, financial journalist Govindraj Ethiraj talks to Rajat Maheshwari, chairman of the Singapore Chapter of the Global Anti-Scam Alliance (GASA) and Senior Vice President, Strategic Growth, Asia Pacific at Mastercard.
SHOW NOTES
(00:00) Stories of the Day
(01:09) You can bet on hundreds of stocks or just on gold
(02:31) The financial system is reporting higher lending
(03:21) AI mania continues as AMD stock prices jump 25% after signing a deal with OpenAI for GPUs
(04:25) Why there is a global shortage of the gas turbines
(06:15) Eli Lilly to invest $1 billion in India for local manufacturing too
(08:55) How did online scams become a trillion dollar industry so fast?
NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on [email protected].
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Good morning, it's Tuesday, the 7th of October, and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital, and it's been a nice warm day on Monday, and the markets were up.
Now, our top headlines and themes,
You can bet on hundreds of stocks or just some gold.
The financial system is reporting higher lending in the last quarter.
Why there is a global shortage of gas turbines.
How did the online scam industry become a trillion dollar one so fast?
Eli Lilly to invest a billion dollars in India also to get into local manufacturing.
And AI mania continues as AMD stock prices jumped 25% after signing a deal with OpenAI for GPUs.
It's Gold All The Way
Gold has hit a fresh high, crossing $3,900 per ounce on Monday, and futures are quoting even higher. Now, the reason why gold is rising is because of fear of many things, the latest being the shutdown of the US government right now.
Gold is also up 50% this year, a return no other widely held asset would have delivered in a long time. And with gold, silver, and bitcoins, which we do not really talk about here, are also touching record highs. Now, on the other hand, stock markets too are continuing to hit record highs, including on Wall Street and up to Japan.
It's a familiar combination of greed and fear, greed for making more money and fear that one might miss the party. It's an amazing interplay of fear and greed simultaneously playing out at so many levels in global markets. Meanwhile, near-term institutional projections for gold, as per a note by UBS reported by Reuters, are now touching $4,200 an ounce by the end of the year, which is effectively two months.
Back home, Indian markets are picking up, but ruled by apprehension and uncertainty. Indices rose for the third consecutive session on Monday, with more buying in IT and banking stocks. The Sensex jumped about 582 points to close at 81,790.
The NSE Nifty 50 recovered its 25,000 mark to close 183 points up to 25,077. In the broader markets, the Nifty Mid Cap 100 and the Nifty Small Cap 100 indices were up 0.8% and 0.2%. Banks did well after many reported strong growth in loan dispersals for the September quarter. Bajaj Finance said its assets under management increased about 24% year-on-year during the July-September quarter, and the quarterly business updates from banks and financials reaffirm expectations of a gradual improvement in earnings, according to analysts who spoke to Reuters.
And in Japan, lawmaker Sanae Takahichi is set to become Japan's next prime minister, a development that caused the yen and long-term bonds to fall, even as equities hit all-time highs. Takahichi is poised to become Japan's first female prime minister after winning the LDP leadership contest on Saturday. Investors had expected the seat to go to political scion Shinjiro Koizumi, who was seen as taking a more fiscally cautious view and leaving the Bank of Japan to press ahead with normalisation, according to Bloomberg.
Meanwhile, the AI plus chip madness continues as advanced micro-devices, or AMD, has signed a deal with OpenAI for AI infrastructure that includes OpenAI deploying six gigawatts of AMD graphics processing units, or GPUs, over multiple years, and AMD giving OpenAI a warrant for as many as 160 million shares, according to Bloomberg. And then, AMD shares jumped as much as 28% in early trade after the announcement, while Nvidia erased earlier gains and was down about 1.4%. And we've, of course, seen some of these circular deals. Nvidia took a formal stake in OpenAI by participating in a $6.6 billion funding round.
Oracle is spending about $40 billion on Nvidia chips to power one of OpenAI's target data centres. And earlier this month, CoreV said that it had an order worth at least $6.3 billion from Nvidia. And back home, the Indian rupee closed at 88.78 rupees against the US dollar, nearly flat on that day.
And in touching distance of its record low of 88 rupees, 80 paise hit last week.
Russian Oil
There is enough supply of Russian oil for Indian refiners in the market, as attacks on Russian energy facilities have led to increased availability, according to officials who spoke to Reuters.
Government officials also told Reuters that refiners, that's Indian refiners, are looking at buying more oil and liquefied petroleum gas, or LPG, from the United States. And this, of course, is in the context of the ongoing trade negotiations between India and the United States. Elsewhere, Reuters is reporting a new discovery in southern Iran with 10 trillion cubic feet of natural gas.
And this was quoted by the country's oil minister. Now, Iran does hold the world's second-largest natural gas reserves, but most of that production is consumed domestically or lost to flaring. And the country faces a gas imbalance during the high-demand months, according to Reuters, which quoted the minister saying that the new find was made after a pause of eight years in exploration activities at the field and estimated it would take about 40 months before extraction could begin.
Oil prices rose slightly on Monday after the Organisation of Petroleum Exporting Countries Plus planned production for November, increased from November, that is, was more modest than expected. Plant-root futures were up and crossed the $65 a barrel mark on Monday. Staying with energy, an interesting report in Bloomberg says rising power demand from data centres for artificial intelligence has led to a shortage of gas turbines needed to generate electricity, and so much so that it used to take about two years to get a new gas turbine, and now it takes up to five or more.
Gas is called a transition fuel, something that can fill a gap between burning coal and moving to a 100% carbon-free grid, according to that definition on Bloomberg. And that's because for every kilowatt hour of electricity produced from gas, it only releases half the amount of carbon dioxide as compared to coal.
Pharma Moves
Moving on to pharmaceuticals, Eli Lilly, the pharma giant, will invest more than a billion dollars in India in coming years to boost manufacturing and supply through local drug makers, the company said on Monday in a report on Bloomberg. Lilly is also setting up a manufacturing and quality facility in Hyderabad to expand its presence beyond the city's Global Capability Centre, which it already runs. Lilly said it plans to hire engineers, chemists, analytical scientists, quality control and assurance experts, and managers.
The collaborations aim to increase the availability of Lilly's key drugs, including those for obesity, diabetes, Alzheimer's, cancer, and autoimmune conditions, Reuters reported the company, saying Lilly, of course, launched its blockbuster weight loss drug, Monjaro, this year, and does not operate its own manufacturing facilities in the country, but works with several contract manufacturers here. Lilly also announced a $5 billion investment in a new facility in Virginia in the United States as part of a $27 billion expansion plan to build four new U.S. plants over the next five years, according to Reuters.
New Innovations In Insurance
The government has begun early-stage talks with local insurers to design a nationwide climate-linked insurance programme, which aims to simplify payout processes after extreme weather events, such as heat waves and floods. This scheme would adopt a parametric insurance model where policyholders receive a predetermined payout when specific weather thresholds, such as rainfall temperature or wind speed, are breached. Now, this is something that's being discussed from a policy, payments, and architecture model already, and also on the core report, and including the use of blockchain to authenticate and deliver those payments.
Now, the move would also have the government, which now uses funds earmarked for disasters, to help states with adverse climate events to rein in costs as insurers would take on more risk. The chairperson of state-run reinsurer GIC, Rhee, told Reuters that he's seen the frequency and severity of adverse climate events go up, and based on that, this discussion with the government has started. So under parametric models, payouts can be made quickly, whereas in traditional insurance payments are based on the loss sustained and assessments, which could obviously take time, maybe even years.
And parametric insurance can also be used to offer coverage in areas where traditional insurance is regretted. Reuters also reports that in 2023, Fiji became the first Pacific island nation to adopt a sovereign parametric insurance policy, securing coverage against tropical cyclones. According to the German watch, Global Climate Risk Index of 2025, India ranks sixth globally in climate vulnerability.
Fighting Online Scams
The Global Anti-Scam Alliance was created to keep people worldwide safe from online scams. The number of online scams is booming.
Nearly a trillion dollars was lost by consumers worldwide last year in scams, a number which should surely shock you. 78% of participants experienced at least one scam in the last 12 months, according to a global state of scam study conducted by the Global Anti-Scam Alliance or GASA. Many respondents don't report scams, close to 60% actually.
And moreover, some 24% felt reporting a scam would not make a difference. And this, the GASA says, is the tip of the iceberg because 59% did not report the scam to the police or other government authorities. And 24% felt, as we said, that reporting that scam would not make a difference.
Moreover, scammers tend to go free because they operate globally while law enforcement operations are usually local, regional, or national. According to the World Economic Forum, only about 0.05% of all cyber criminals are prosecuted, says GASA. I reached out to Rajat Maheshwari, Chairman of the GASA Singapore Chapter and Senior Vice President, Strategic Growth Asia Pacific Mastercard, based out of Singapore, and I began by asking him how big the problem was and how it became so big so fast.
INTERVIEW TRANSCRIPT
Rajat Maheshwari: It has raised very quickly, it is becoming a bigger and bigger problem. If you talk about the scale, worldwide we have lost close to 1.36 trillion. So I'm not talking about billions, it's trillions now.
If you talk about Asia Pacific specifically, last year close to 660 billion have been lost on scams. We recently did a survey for Southeast Asia and from Southeast Asia alone we have seen the numbers close to 23.7 billion which have been lost on scams. So this is the scale of what we are talking about now, it is not like someone losing a few dollars or a few hundred dollars or a few thousand dollars, it's running into billions and trillions now.
If you talk about the GDP, it's bigger than many of the countries around the globe. So this is the scale, this is the problem that we are looking at now. Why has it grown so quickly?
There are many reasons for it but I would like to highlight three main things that I see. One is definitely the increased digitisation which means that the area for bad actors to play has become a lot bigger and it's getting bigger and bigger. Imagine in the last 10 years how many people have come on to social media platforms, how many people have got access to mobile devices or even many other kinds of handheld devices.
So this allows bad actors to exploit those mediums, exploit those platforms and then target the individuals. The second one is of course with the rise of technology. I mean if you see the way scams have evolved in the last 10 years, previously it was mostly bad actors taking your credentials and then trying to perform the transactions or financial transactions using those transactions.
It came to a point where the phishing or smishing kind of attacks happen where you get them an SMS or message and then you act on that. Then comes the malware, your device gets infected and then the scammers can see what you're typing on your device and then they use those credentials. Then we are seeing the rise of deepfakes and generative AI now which is like we are talking here Govind but I don't know with what confidence you can say that it's some bad actor sitting and not really Rajat sitting over here.
So this is the challenge that AI has got on the wrong side. And then the last one is that scams have become more and more cross-border. I mean see scams is not a new problem, it used to happen centuries ago also.
We have seen crime, it was in physical space, now it is getting more and more transformed into digital space. And the opportunity is massive. We have seen from our reports and the research what we are doing, the scams are being operated by the big criminal syndicates now.
They see a big potential here. There are many geographies which are being misutilized by these actors to run scam syndicates which involve real humans. If I have to say in one line, it's not the technology what they are targeting now, it's the human what they are targeting.
Govindraj Ethiraj: And in your capacity as GASA head, how are members looking at it? At a later point, I'll ask you about payment companies as well.
Rajat Maheshwari: Absolutely. So Global Anti-Scam Alliance or GASA, it's an NGO which was based out of the Netherlands. It started in Europe actually and has a relatively smaller setup over there.
And back in 2022, we kind of saw one of their summits and then we saw the potential to solve the scams problem. We need to collaborate, we need to come together and this was looking like a great platform. So we got the Global Anti-Scam Alliance to Asia Pacific.
We started with Singapore, let's say we open a chapter here and see if we can bring in like-minded entities, like-minded companies together to see what can be done. It really worked. A couple of years ago when we started GASA, it was just an idea.
And just a couple of months ago, we hosted the largest global anti-scam summit worldwide. Close to 800 people from governments, regulators, the anti-scam command centres, police forces, financial institutions, NGOs, everyone participated with the common goal that we have to defeat scams. As GASA, they do lots of things where we do research to be able to defeat or to be able to counter a problem.
You need to first know how big the problem is. You need to know what the size of the problem is. And this is the big challenge that we have seen in countries where many countries don't know how much they're losing to scams.
So that's the first step as GASA we took that we started surveying the markets. We started looking into the lost numbers, which made the government realise that, oh, it's becoming a bigger and bigger problem and the citizens are losing so much money. The second thing we do as GASA is to bring collaboration and cooperation.
We're hosting this summit where like-minded entities come together and talk about what can be done together. Can we share data? Can we share information which can be beneficial for governments to stop scams or for financial institutions to stop scams?
We are collaborating with international institutions as well. Like last year, jointly with UNDP, we announced an anti-scam handbook, which essentially talks about how to deal with scams in developing countries and what kind of technological solutions which are available to counter scams. Also, now slowly we have started expanding beyond Singapore as well.
This year, we announced the expansion of global anti-scam alliance chapters in Indonesia and Philippines as well.
Govindraj Ethiraj: Got it. And let me touch upon payment companies or intermediaries broadly. Since you did say one of the key tasks or objectives of this alliance is to see what can be done.
And one, I'm guessing, is the communication aspect of it. What is it that you see people in your ecosystem doing to counter this?
Rajat Maheshwari: As GASA and what we have been communicating to various governments as well, that it has to be a combination. I mean, if you have to target this problem, it has to be a combination of education, policy, and technology. None of each can solve the problem alone.
Many governments have started looking into the education aspect. In Singapore, there are companies which are working on creating the toolkits and how in a lighter way or through gamification can explain this problem of scams and how to tackle scams. From a policy perspective, some of the governments have taken bold steps.
Govind, if you see the problem of scams, the big challenge, I mean, I will touch the payment company here as well or payment scheme as well. Let's say if a fraud happens or scam happens on a credit card instrument where you are travelling somewhere and you come back and you see a transaction which you don't recognise you have done, you can simply raise a dispute to the financial institution saying that, oh, I have not done this transaction or I don't recognise this. So there is a proper dispute resolution process and a recourse mechanism that if you have not done that transaction, you will get your money back.
With the rise of real-time payment systems, account-to-account transfer, there is no recourse mechanism. I mean, I do a payment transaction real-time to you. I will transfer 2,000 INR to you.
It's done. Transfer is done. I cannot really claim and dispute that, oh, I have not done this transaction.
That's why the challenge is that there is no regulation around this. So one of the big things the UK government has done is that the regulator over there said that in these kinds of transactions also, the liability doesn't sit with consumers. Like in the example I gave, the liability is mine.
I gave you 2,000 INR. I lost that money. While in the UK, the government said that between sending institution and receiving institution, you have to split the liability, which means that if I transfer the money in the UK and it turns out to be a scam, if I go and report that as a scam, the financial institutions sending and receiving both will split the liability.
This has done two things. I mean, the financial institutions became more and more aware and then also they started acting quickly on this problem because there is a reason, there's a motive now that the liability sits with them. And it has effectively worked in the case of the UK as well.
That's the only country which has reported a downturn on scams. Last year, there were 12% less scams than the previous year. So regulation is helping that way.
Singapore has also done scam shield deployments for mobile devices where it effectively helps you to identify messages or calls which are coming from scammers and helps you to protect against those kinds of calls. A good example came from India as well, where I was speaking to my friend, Mr. Naveen from the Department of Telecom and I was so heartened to hear that they managed to stop millions of fraudulent transactions, which resulted in saving 140 crores of hard-earned money. Last example I want to quote, since you have asked for the financial institutions, Mastercard also collaborated with the banks in the UK.
It's a complete chain going, right? It starts from the internet, it comes to the telcos, it comes to the social media platforms, and then it goes to the financial institution where the actual transfer happens. And then finally, it is with the law enforcement.
If it's a bad transaction, they are going to trace where the money has gone and how the money has moved. So we tried countering this at different levels. If you can stop at internet or telco level, you stop there.
Platforms need to do their role as well to stop being misused. And then with financial institutions, what Mastercard has done was give them preventive risk scores. So for example, you have an Axis Bank account and I am an ICICI account holder and I'm doing a transaction for you.
So today, most of the banks, when they do the assessment about a particular transaction, they will see my spending pattern, they will see my credit score, they will see how I am doing and where I am. And all those things they do, it's pretty much a singular view, right? What they see, what's happening with me and probably what your financial institution will see is what's happening with you.
Imagine someone put up an advertisement in the newspaper or, you know, in social media channels that diabetes can be cured. Please click the link below and then buy the medicine. What happens is that hundreds or thousands of people are going to click that link and then the money will start coming to your account.
But because the financial institution only sees the singular view, they will not catch this pattern. It's not one transaction. There are thousands of people suddenly transferring money to go in for no rhyme and reason.
So this is what we have done in the UK with the financial institution together to bring the network view in place. And with that, we are able to identify the patterns that if this is looking like a bad transaction, then we are able to report to the institution that something is wrong with this. So either the sending institution or the receiving institution stops the transaction.
And this was very effective as a preventive measure. And beyond that, the next set of challenges go in spite of all these things, because scams are getting more and more authorised in space. I'm in love and I want to give my money to someone who can stop me.
It's my account. It's my device. It's my wish.
Legally also, no one can stop me. And this is what is happening. It's an authorised space, whether it's investment scams, job scams, romance scams, or love scams.
If it's self-infected, then it's very difficult to trace. It's very difficult to even detect. So even though we are doing everything in this scam chain, still if the money is lost, then can we quickly trace the money?
Because it moves in seconds.
Govindraj Ethiraj: And it keeps moving from account to account, right? I think that's the other thing.
Rajat Maheshwari: And at some point of time, it will go out of your jurisdiction as well, which is what we have seen. That's how the scam money moves out of the countries or jurisdictions. So from that perspective, there is another work for what we have done with the Philippines government where we have given them the tool which shows them the money movement quickly so that they're able to quickly stop the transaction.
I mean, if someone reports that, okay, I have been scammed, then how quickly you can go and stop this transfer. India is also looking into similar kinds of solutions where if a scam has happened, how quickly we can stop the money from floating into accounts. Because once it goes into the mule accounts, it's very difficult.
These accounts belong to someone in a rural area, living in below poverty conditions, and they will not even realise what has happened. And there is no solution to this problem, right? What will you do with that individual?
He has done nothing wrong. He's not even aware that that account is a mule account. So quite a few things.
It's a combination of education, policy, and technology which needs to be in place to come to the challenge. Right.
Govindraj Ethiraj: Last question. Let's say at the intersection of public policy and private sector or private-public partnership, what's the one thing that you feel there could be more emphasis on right now or let's say in the next few months or in this period? What could we be focussing on right now amongst the many other things?
Rajat Maheshwari: So from an education perspective, I think it has to be reinforced, Govind. When we did the research, we figured out that in four weeks time, I mean, you educate someone that this is a bad transaction. This is how you detect that it's not a good transaction or this is a scam.
This remains consistent for four weeks and then the decline starts and the person becomes vulnerable again. So how do you reinforce this continuously from an education perspective? From a policy perspective, I feel that data is one of the big challenges, data sharing.
How do you do that within the regulations of data, privacy, banking secrecy? Because that is going to solve quite some of the technology issues or technology challenges that institutions are facing, how do you counter this problem? And then scammers are operating in cross-jurisdiction.
I mean, someone sitting in the Golden Triangle, Cambodia, Laos or Myanmar and then if the call is coming from there, it's beyond jurisdiction, right? So you need more cross-jurisdiction collaboration as well to counter this challenge.
Govindraj Ethiraj: Rajat, we've run out of time. Thank you so much for joining me.
Rajat Maheshwari: Not at all, Govind. Thank you so much.
