Indigenous Investors Weekly Insights!
Top 3 well curated stories from the stable of Indigenous Investors incase you missed them. These can range from finance to sports, depends on what made the headlines. Stay tuned.
At Indigenous Investors, we pride ourselves on a simple but powerful habit: reading for 5 hours every single day. It’s something we’ve shamelessly borrowed from the Oracle of Omaha, Mr. Warren Buffet. To share the wealth of knowledge we uncover, we’re bringing you 3 top stories that you may have missed this week. If there’s a topic you want us to cover, drop us a line! We’re always excited to read more and refine our process.
Story #1: India’s journey to becoming the ‘pharmacy of the world’ (click here)
To get a sense of where India’s pharmaceutical industry was 25 years ago and how far it has come, we need to turn the clock back to the 1970s, when Indira Gandhi, the prime minister then, is said to have received a message from the scientist Yusuf Hamied, who is now the non-executive chairman of Cipla. Hamid asked her: Should Indians be denied a lifesaving drug (propranolol, a cardiac drug) because the inventor “does not like the colour of our skin”?
What followed was the change in patent laws of the country overnight which enabled the Indian Pharma industry to make slight modifications to produce generic versions of patented drugs. Indian companies have ramped up their R&D in the past two decades to become a major player in the Pharma industry worldwide. Some achievements include -
i. India has highest number of US FDA compliant companies outside America.
ii. 8 out of 20 global generic companies are from India
iii. WHO sources about 70% of its vaccine requirements from India
iv. Indian Pharma industry has grown 20 fold from USD 3 billion in 1999 to USD 59 billion in 2024.
Story #2: ETFs of Precious metals shine in 2024 (click here)
Investors have pumped over INR 19,000 in first 11 months of 2024 in Gold and Silver ETFs, a jump of 100% over 2023. The precious metals came in the forefront of investors’ choices due to RBI’s policies and Geopolitical tensions that have created uncertainties over extended periods of time. The rally has led to Gold ETFs rise by 20% and Silver ETFs returning 17%.
Other factors such as reintroduction of LTCG on Gold ETFs have also helped in favourable investor sentiment.
Gains from Gold ETFs are subject to Long Term Capital Gain of 12.50% if held for more than 1 year.
Readers please note that there is a positive correlation between uncertainties and prices of precious metals. Whenever uncertainties in the world increase, the price of gold and silver go higher. This was evident during the 2008 global financial crisis as well as during the lockdown periods of 2020 & 2021. Currently, the world continues to face issues with Russia-Ukraine war still going on, crises in the Middle East, chances of trade wars between US and China, slowing Europe and so on.
Story #3: Why India and China should admit that their economies are intertwined (click here)
The relationship between the two developing giants has only worsened since the military clash in the summer of 2020. However, today, both nations are more than a little concerned about how they will revive slowing growth.
The ripples of Chinese real estate slump of 2021 has affected all other sectors and their over-investment in industrials are coming to bite back as the recovery has not been as planned and China hopes to find its solace in Indian markets that is brimming strong in consumption.
At the same time, India is looking to leverage its position in the global markets but realises that it cannot do so effectively unless it taps into the supply chains currently dominated by (and even developed by) the Chinese.
The concerns of border security, data integrity and safeguarding domestic industry is what India has to weigh. While on the other end, China has to make sure it gets better access to the bustling Indian markets and make sure India doesn’t get too close to the US in accelerating the trade wars and isolate China.