Value Is Not In The Eyes Of The Beholder

When financial markets go through large dislocations, people buy and sell (mostly sell) for a wide variety of reasons. Most of the time, these reasons have nothing to do with the underlying fundamentals of the asset but everything to do with the fundamentals of the owner of the asset. Examples include redemptions, margin calls, regulatory trouble, change in leadership etc.

Many times these dislocations throw up fantastic opportunities. More...

The Indian Rupee And Its Discontents

The Indian Rupee has caused a lot of heartburn. It is the worst performing currency in Asia and has fallen 17% against the US dollar since the start of the year. Some of the questions on people's minds with respect to the rupee are:

What has caused the fall in the rupee?
The immediate simple answer is that the fall is caused by flows driven by supply and demand. India runs a deficit on the trade and current account. This deficit is funded by a surplus on the capital (investment) account. Volatility in the rupee in recent years has increased due to the inrease in volatility in global financial markets and the consequent volatility in India's capital account. India's domestic environment hasn't helped the capital account either. Policy paralysis combined with an over-hawkish Reserve Bank of India (RBI) has caused a complete collapse in capital investment in India. This has exacerbated supply constraints and fueled inflation. More...

Pharma opportunity in India

Indian pharmaceutical companies offer an attractive investment opportunity. India has been in the news with global pharma majors making multi billion dollar acquisitions in India. Investors have also fallen all over each other scrambling to buy the Indian listed arms of multinational pharma companies.

However, the real opportunity is in India's ability to provide low cost drugs. The last decade has seen astonishing growth of several domestic companies that cater to the Indian market. These companies have taken generic formulations (drugs) and produced, packaged and marketed them aggressively in India's hinterland. Some have built businesses in general medicine and others have taken the route of specialized medicine like opthalmology, cardiology, dermatology etc. More...