Wockhardt UK Deal & More

Good morning, folks! As RBI begins it’s 3-day MPC or Monetary Policy Committee Meeting, all eyes are peeled to see whether they focus on growth or inflation. Either way, it’s going to be a tricky balance, almost as tricky as maintaining a work life balance with work-from-home.

MAIN STORIES

Wockhardt partners with UK government

In a stamp of approval for Indian pharmaceuticals, Wockhardt yesterday announced a deal with the UK government whereby the drug maker would supply millions of doses of the coronavirus vaccine to the country. This will be done by reserving manufacturing capacity at CP Pharmaceuticals, a subsidiary in Wrexham, North Wales for 18 months.

Tell me more: The company will help out in the fill and finish stage of vaccine production. In layman’s terms it is more like a distribution process of the manufactured product into ready-to-be-used individual vials. Although the Astra Zeneca vaccine is still in it’s final stages of trials, the UK government is leaving no stones unturned to be ready to dispense once the vaccine passes all stages. Markets were obviously delighted, rewarding the stock with a 10% appreciation.

What’s happening on the Indian front? Pune-based Serum Institute, which already has a deal to produce the Oxford vaccine, has gotten the approval for phase 2 and 3 human clinical trials of the candidate. Covaxin, the front runner of an Indian vaccine by Bharat Biotech, is in the process of human trials at 12 sites.  Another Indian vaccine candidate developed by Zydus Cadila has initiated phase 1, 2 clinical trial as well. In a nutshell, there is a frentic activity and progress on the vaccination front. Keep calm and have faith, eh?

The yo-yo of Indian economy

With the lockdown being much like a “freeze” or “unfreeze” switch at will, the Indian economic indicators are also acting like a pendulum refusing to be boxed into a unidirectional trend.

Factory output takes a step back: While the factory output or manufacturing PMI had shown the maximum dip in April, the months of May and June had seen consistent nursing back to health. In July though, the PMI index fell to 46, from the 47.2 in June and 30.8 in May. A figure above 50 indicates economic growth which shows that it is still touch and go before we reach that stage. IMF will not be surprised by this number as about a week back they had raised concerns about the Indian economy plateauing after the spurt from initial lockdown days.

Although… There is an indication that the 12-month business outlook sentiment improved for the second consecutive month to reach a 5-month high, while remaining at historical lows. As per an employer sentiment survey by OLX People, blue collar hiring is also projected to bounce back in metros. So, mixed signals all around.

Tech fuddy duddy to buy it’s way to yuppie

On Sunday, Microsoft announced that it was in discussion to buy Tik Tok in the US, Canada, Australia and New Zealand. Microsoft aims to swoop in on the deal by September 15th in collusion with the US government. Although, considering the deal in question covers only four countries, the remaining over 100 countries will remain with the original parent company Byte Dance.

What’s in it for Microsoft? Currently, their suite of products are much more conventional in nature, be it outlook or even the group calling app of Teams. Apart from Xbox which is a very small slice of the pie, very few of it’s products cater to the below-25 TG. With Tik Tok’s 100 million subscribers in the US, they aim to bring in a potential new TG to the fold. Off late, Microsoft has been on quite a shopping spree with gaming legend Minecraft in 2014, professional network LinkedIn in 2016, and software developer Github in 2018. When you see the trend of one purchase every two years, no wonder they are ready to open their purse strings in 2020.

Is that the only story? Nope. President Donald Trump made the right kind of sounds about being inspired by India and banning Tik Tok in the US over concerns of data harvesting. Now, it is to be believed that the President’s ultimatum is widened to “get bought out by Microsoft or be banned in the US”. Although Byte Dance founder Zhang Yiming tried his best to distance himself from China, including thoughts of moving headquarters to London, it’s not been enough. As expected, and probably hoped for, China is not too happy with this turn of events.

IN SNIPPETS

Bandhan Bank stake sale: To get in line with the RBI mandate on limiting promoter holding to 40%, Bandhan Bank initiated a block deal worth about Rs. 10,500 Crore or 20.95% at a 10% discount to closing market price on Friday, 31st July. FIIs are expected to come shopping.

Moody’s in a good mood: In a reversal of recent trend, Moody’s was in the news for a rating upgrade. Thanks to equity infusion from the recent FPO, Yes Bank now has improved financial strength and reduced risks for creditors. While most of it’s ratings were hiked up a notch, the outlook was also moved from stable to positive.

Wiserfunding set to make it’s India debut: In a boost for MSME sector, UK based fintech Wiserfunding has announced it’s launch in India. The startup specialises in small business credit, whereby it uses AI to assess credit worthiness. They plan to partner with approximately 4 banks and 10 NBFCs to lend to 85 lakh small businesses by the end of FY21.

Russia in a rush to win the war against coronavirus: Truth be told, who isn’t. But, Russia is walking the talk by announcing a mass vaccination program starting October with teachers and healthcare workers being the first ones to get it. Although the world seems to be on a more cautious footing, trying to tell Russia, haste makes waste.

Advertisers drawn in by Facebook’s progress: Some of the brands which had announced boycotting the platform like North Face, Heineken, Pernod Ricard and Puma SE have announced a roll back to the boycott. Love it or hate it, you can’t ignore facebook.

MARKET PULSE

Indian markets dipped for the sixth time in seven days, fourth day in a row. While concerns over global spread of coronavirus persist, whispers about loan moratorium and loan restructuring are also spooking investors. Nifty registered it’s worst intra day fall in almost three weeks.

Wockhardt brought investors cheer with the UK deal. Despite an almost 50% drop in revenue, Tata Motors share price also rose by 5%. Investors also rushed in to get a piece of the “asymptomatic” SBI.

Gold, on the other hand, looks all set to achieve new benchmarks by being a whisker away from the Rs. 54000 / 10 gram mark.

WILD CARD

Some days it seems like this part of Scribe is custom made for Elon Musk to make waves in. Yesterday, most known rational people claimed he was hallucinating when he said that the Egyptian Pyramids were built by aliens. Yeah, he really tweeted that. Wish Twitter had a jokeometer installed to help us understand this genius mind better.

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