SUNDAY WEEKLY ISSUE #6
Good morning EveryFinions!
There were such polarising discussions this week in Twitter about the tussle between Jasmin Bhasin & Rahul Vaidya on Big Boss 14. It was just too much drama for one night. Twitterati were pouring in abuses about her. Poll ratings for Jasmin went down significantly on the social media platform.
Something else that went down this week was the pack of technology stocks in NASDAQ and this is despite them posting good results. AAPL (-6%), FB (-7.5%), Netflix (-3.5%) were all down. Twitter’s stock went down by a massive (-20%). Paparazi in India are suggesting that nobody should mess with Jasmin, not even Twitter.
IN TODAY'S NEWSLETTER
QUIZ Given a risk-free interest rate of 5%, how much would you pay today to get a guaranteed return payment of Rs.100, 2 years from now? MARKET UPDATE SENSEX 39,614 -1.0% NIFTY 500 9,582 -2.0% Brent Crude $37.94 -11.5% Gold (per gram) Rs.5,084 +0.0% NEWS IN BRIEF
IN LESS THAN 200 WORDS (1/2)
ANT Financial vs. Top 15 Banks in India ![]() China’s Fintech giant, Advanced new technologies Co. ltd., commonly referred to as ANT financial received the necessary approvals this week to dual list its IPO shares in Shanghai and Hong Kong. The business at the offer price was valued at $320Bn. An article by Bloomberg noted that at that value, it is bigger than the GDP of countries like Egypt & Finland. To give you a perspective of how that value stacks up against our banks in India, here is a chart. ![]() It is bigger than our top 15 banks put together!
Individual investors submitted bids worth $4.2 Trillion for Ant’s shares collectively at Hong Kong and Shanghai. That much money would buy the entire amount of goods and services produced in India over a full year and still be left with a pocket change of $1.4 Trillion. The institutional investors quota was oversubscribed by 284X times and retail investors oversubscribed by 870X in Shanghai. Individuals have taken on significant leverage in order to increase their bid size and secure some allocation. All eyes will be on listing day gains.
This is the first time in history a financial institution has managed to raise such staggering sums of money outside the US. Ant generated $2.7Billion in profits in CY19 and $3.3Billion in profits in H1 CY21 business. The company owns 23% of Zomato and 30% of PayTM. IN LESS THAN 200 WORDS (2/2)
COVID-19 Vaccine - Where are we? Never in the history of this world have so many people wanted to be pricked by a needle as bad as they do now. We took a detailed look at the vaccine development process, where we are, and who the lead contenders are. You can read about it here. If you only want a summary, here it is.
There are typically 5 phases in the development and monitoring of a vaccine. We have about 213 different COVID-19 vaccines under development, 37 of which are in clinical trials and just 10 are in phase 3 right now. Half of those are being developed in China and Russia. Safe to say that these will be met with ample skepticism. But there are 4 being developed by western pharmaceutical companies that are near the finish line. ![]() At home, Bharath biotech, Indian council of medical research ICMR, and the National Institute of virology have tagged together to develop a vaccine that received approval to kick off Phase 3 clinical trials. Over 28,500 people will be involved in this study which is due to start soon.
Given that the stakes are really high, market pundits are watching quite keenly on the developments. Indian investors looking to get exposure to the equity of some of these companies can consider direct investments or indirectly through a mutual fund that holds positions in these. But the risks are very high and it is not for the faint-hearted. COVER STORY Looking to buy a house? Read this first. Real estate investors in India have had it tough over the last decade. Average inflation over the last 7 years stood at about 5% per annum and residential property prices across most major cities did not even appreciate by the same %. This was at a time when average housing loan interest rates were at 9% per annum. This chart from Knight-Frank shows this rather sad trend. ![]() This trend worsened as we got into 2020 as prices fell dramatically across most major cities. This chart below shows that. ![]() Given, we are where we are, how should one think about real estate investments today? Should you invest in a residential property?
To answer that question, we need to look at demand and supply factors that drive real estate prices. We will look at 3 demand-side and 3 supply-side factors to make a judgement call on where we are now and how these metrics could evolve over the next few years to affect property prices. We will also give you our top picks of areas where we expect property prices to appreciate the most in the next few years. IN CASE YOU MISSED IT... The art of investing in equity mutual funds ![]() This is Part 2 of the three part series on mutual funds in India. If you have not read Part 1, you can read it here.
Equity mutual funds in India are probably the most popular kind amongst retail investors because they are easily understood. But when there are 465 different schemes to choose from, where do you even start!
We assigned each of these 465 equity mutual funds into 10 broad categories and extracted their historic performance data. History is not usually the best indicator of future performance, but the fund’s track record is the only real tangible piece of data available to us to make a judgement. So, we begin there.
Given that the mirror (data) never lies, we will pose the questions to it.
Mirror Mirror, tell us as we yearn, "Which categories, amongst the 10, have delivered high return?" P.S : I won't lie to you, this one is going to be a difficult read. But if you get through it, you will become a star mutual fund investor. I promise! ANSWER TO QUIZ ₹90.70 That is what you should be ready to pay today to get a guaranteed return payment of ₹100 in 2 years. This is called time value of money and the method of arriving at this value is called discounted cashflow. Think about it the other way around - If you open a FD today with ₹90.70 paying 5% per annum, it would return Rs.100 in 2 years. THOUGHT FOR THE DAY Rule #3 : Never forget rule #2 ![]() READ/WATCH/LISTEN
From the writer in me, to the reader in you ♥
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