Investment

Virus Ignites Investment Appeal of Indian Drugmakers Post Covid – BNN

Published

4 years ago

July 26, 2020

(Bloomberg) — Indian drugmakers are on track to become a staple investment for some equity investors after being spurned for at least five years.

The S&P BSE Healthcare Index has risen 27% this year, set for its first yearly outperformance in five versus the S&P BSE Sensex Index. The benchmark gauge has just one pharmaceutical member, Sun Pharmaceutical Ltd. That means the Sensex was unable to benefit from a stellar rally in some of the largest drugmakers in India.

“Improving fundamentals and the potential for Covid-19-led risk off in other sectors will keep the pharma rally going” said Aneesh Srivastava, the Mumbai-based chief investment officer at Star Health and Allied Insurance Co. The odds for better returns over the next few years have risen, he said.

A flurry of plant approvals from the U.S. Food and Drug Administration this year has boosted the fortunes of Indian pharma companies, while domestic drug sales have recovered after the world’s biggest lockdown eased in June. On Wednesday, the government unveiled a policy aimed at boosting local output of raw materials used in drug production to break a reliance on China, which supplies about 70% of those ingredients.

“These steps come at an opportune time,” Emkay Global Financial Services Ltd. analyst Praful Bohra wrote in a note on Wednesday. A lot of companies globally are looking for “an alternate source of raw materials to reduce their dependence on China,” he said.

The optimism is reflected in analyst earnings estimates for the sector. Forecast profits for members of the local healthcare index have rebounded to pre-pandemic levels whereas that for the benchmark has slumped to near its lowest since 2017, according to data compiled by Bloomberg.

“Pharma stocks can command a higher weight in the indexes and portfolios as India is set to become an even stronger hub for drugs,” said Deven Choksey, who oversees investment and research as managing director at KRChoksey Investment Managers Pvt. He sees the stocks adding as much as 20% to their rally by the end of this year.

With only the one stock remaining, the industry’s weighting in Sensex has dropped to about 1.2%, the lowest level since 2011 as sentiment for the shares soured after several major Indian pharma companies were hit by a wave of FDA sanctions in 2015 that threatened access to the profitable U.S. market. Things have since changed.

Still, U.S. President Donald Trump announced new policies on Friday aimed at lowering drug prices that can have repercussions for India’s generic drugmakers.

“Growth in the sector is rebounding as the economy is opening up,” Abdulkader Puranwala, an analyst at Anand Rathi Financial Services Ltd. wrote in a note on July 20. “We expect pharma to be one of the fastest growing industries in India,” as shown by the price increases and new product launches, the note said.

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Economy

S&P/TSX composite down more than 200 points, U.S. stock markets also fall

Published

1 week ago

September 6, 2024

Anne Joseph

TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.

The S&P/TSX composite index was down 239.24 points at 22,749.04.

In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.

The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.

The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.

The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.

This report by The Canadian Press was first published Sept. 6, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Economy

S&P/TSX composite up more than 150 points, U.S. stock markets also higher

Published

2 weeks ago

August 29, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.

The S&P/TSX composite index was up 171.41 points at 23,298.39.

In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.

The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.

The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.

The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.

This report by The Canadian Press was first published Aug. 29, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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Investment

Crypto Market Bloodbath Amid Broader Economic Concerns

Published

1 month ago

August 5, 2024

Harry Miller

The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.

The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.

Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.

The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.

Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.

Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.

Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.

Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.

The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.