Why Goldman Sachs is bullish on Indian shares

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

I Bala Aditya, MBA 2023-25, Vinod Gupta School of Management, IIT Kharagpur

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Goldman Sachs, one of the world’s leading investment banks, has recently upgraded its rating on Indian shares to “overweight” from “marketweight”, citing strong economic growth prospects, steady domestic mutual fund inflows and a potential supply chain shift from China. The bank expects Indian shares to outperform the regional average in 12 months. Let’s explore the reasons behind this bullish outlook and what it means for investors.

Strong economic growth prospects

According to Goldman Sachs, India is expected to have the best structural growth prospects in the Asia Pacific region, with real GDP growth of 6.5% in 2023 and 6.3% in 2024. This is slightly below the Reserve Bank of India’s target of 6.5% for fiscal 2024 but still higher than most other large economies in the region. The bank attributes this growth to India’s large domestic market, favourable demographics, reforms in labour and agriculture sectors, and recovery from the COVID-19 pandemic.

Steady domestic mutual fund inflows

Another factor that supports the Indian stock market is the consistent inflow of domestic mutual funds, which have been net buyers of Indian equities for the past 10 months. This reflects the increasing participation of retail investors, who are attracted by the long-term growth potential of Indian companies and the diversification benefits of investing in equities. Domestic mutual funds have also absorbed the outflows of foreign portfolio investors, who have been net sellers of Indian equities for the past six months due to global risk aversion and currency depreciation.

Potential supply chain shift from China

A third factor that boosts the attractiveness of Indian shares is the possibility of a supply chain shift from China to India as global companies look to decrease their dependence on China amid rising geopolitical tensions and trade disputes. India has a strategic advantage in this regard, as it offers a large and growing domestic market, low labour costs, improving infrastructure, and favourable policies such as the production-linked incentive (PLI) scheme, which provides incentives to manufacturers in sectors such as electronics, automobiles, pharmaceuticals, and textiles. Goldman Sachs estimates that the PLI scheme could add 0.5% to India’s GDP growth over the next five years.

Implications for Investors

The upgrade of Indian shares by Goldman Sachs is a positive signal for investors, as it indicates that the bank expects Indian shares to deliver higher returns than the regional average in the next 12 months. However, investors should also be aware of the risks and challenges that the Indian market faces, such as inflationary pressures, fiscal deficit, regulatory uncertainty, and environmental and social issues. Therefore, investors should adopt a balanced and diversified portfolio approach and focus on quality companies with solid fundamentals, competitive advantages, and sustainable growth prospects.

References :

Goldman Sachs loads up on Indian markets: Upgrades to ‘overweight’

Goldman Sachs upgrades India stocks, cuts rating on China’s

Goldman Sachs raises Indian shares to “overweight” on growth, earnings momentum

Matsya 6000 – How India’s deep ocean research will help it’s blue water economy

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

I Bala Aditya, MBA 2023-25, Vinod Gupta School of Management, IIT Kharagpur

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The ocean resources offer immense potential for economic growth, social development and environmental protection. However, the ocean poses many challenges, including deep-sea exploration, resource extraction, pollution, climate change and security threats. To tackle these problems and capture the potential, India needs to adopt a blue economy approach that balances the conservation and utilization of ocean resources.

One of the significant plans that India has pursued in this direction is the development of Matsya 6000, a manned submersible vehicle that can dive up to 6,000 metres below the sea surface. Matsya 6000 is part of the Samudrayaan project, which aims to send three humans to study the deep sea resources and ecosystems. Matsya 6000 is being built by the National Institute of Ocean Technology (NIOT) in Chennai, with the support of the Indian Space Research Organisation (ISRO) and other agencies. Matsya 6000 will be a game-changer for India’s blue water economy in several ways.

First, Matsya 6000 will unlock the secrets of the vast ocean floor, which remains largely unexplored and holds valuable minerals, hydrocarbons and biological resources. India has secured rights to mine polymetallic nodules in the Central Indian Ocean Basin from the International Seabed Authority. These nodules are rich in metals such as copper, nickel, cobalt and manganese, essential for various industries. Matsya 6000 will help evaluate mining these nodules’ feasibility and environmental impact. It will also help identify other potential resources in the deep sea, such as methane hydrates, hydrothermal vents and rare earth elements.

Second, Matsya 6000 will boost India’s scientific and technological capabilities in oceanography. It will collect data and insights on the deep sea environment’s physical, chemical, biological, and geological aspects. It will also enable research on climate change, ocean acidification, marine biodiversity, biotechnology and ocean energy. Matsya 6000 will foster collaboration and cooperation with other countries and international organizations in ocean research and development. It will also help train and inspire a new generation of ocean scientists and engineers in India.

Third, Matsya 6000 will strengthen India’s maritime security and strategic interests. It will allow India to monitor and protect its maritime boundaries and assets from external threats or intrusions. It will also help India to assert its influence and function in the Indian Ocean Region (IOR), a vital area for India’s trade, energy and geopolitical interests. Matsya 6000 will also contribute to the Indian vision of SAGAR (Security and Growth for All in the Region), which aims to promote peace, stability and prosperity in the IOR. It will also enhance India’s role as a responsible maritime power that respects international law and norms.

In conclusion, Matsya 6000 is a landmark project that will help India realize its potential as a blue water economy. It will boost India’s economic growth and social development and enhance its environmental sustainability and national security. Matsya 6000 is a symbol of India’s scientific prowess and maritime ambition.

References:

https://www.firstpost.com/explainers/6000-metres-under-the-sea-what-we-know-about-indias-deep-sea-submersible-matsya-6000-13111862.html
https://en.wikipedia.org/wiki/Matsya_6000
https://idsa.in/askanexpert/difference-between-blue-economy-and-blue-water-economy-respect-to-maritime-diplomacy
https://www.clearias.com/blue-economy/

The 2023 Nobel Prize in Medicine: How mRNA Vaccines Changed the World

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

I Bala Aditya, MBA 2023-25, Vinod Gupta School of Management, IIT Kharagpur
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The Nobel Prize is one of the most prestigious awards in the world, honoring those who have made outstanding contributions to humanity in various fields of science, literature, and peace. This year, the Nobel Prize in Physiology or Medicine was awarded to two scientists who revolutionized the field of vaccine development and helped save millions of lives during the COVID-19 pandemic. They are Katalin Karikó and Drew Weissman, the pioneers of mRNA vaccines.

mRNA stands for messenger RNA, a molecule that carries genetic information from DNA to the cell’s protein-making machinery. mRNA vaccines use synthetic mRNA molecules that encode a specific part of a virus, such as the spike protein on the surface of the coronavirus. When injected into the body, these mRNA molecules enter some of our cells and instruct them to produce the viral protein. This triggers an immune response that recognizes and destroys the foreign protein and any virus that carries it. This way, mRNA vaccines teach our immune system to fight off the infection without exposing us to the actual virus.

mRNA vaccines have several benefits over traditional vaccines that use killed or weakened viruses, viral proteins, or viral vectors. First, mRNA vaccines can be produced faster and cheaper than other types of vaccines since they do not require cell culture or complex purification processes. This makes them ideal for responding to emerging outbreaks and pandemics. Second, mRNA vaccines can be easily modified to target different variants or strains of a virus by changing the sequence of the mRNA molecule. This allows for rapid adaptation to new challenges posed by viral evolution. Third, mRNA vaccines, with minimal side effects, are highly effective and safe in preventing severe disease and death from COVID-19.

Katalin Karikó is a Hungarian-born biochemist working on mRNA research since the 1980s. She faced many challenges in her career, as funding agencies and scientific journals often rejected her ideas. She moved to the United States in 1985 and joined the University of Pennsylvania in 1990. There, she met Drew Weissman, an immunologist interested in using mRNA for vaccine development. Together, they made two groundbreaking discoveries that enabled the creation of effective mRNA vaccines.
The first discovery was that unmodified mRNA molecules trigger an unwanted immune reaction that degrades them and causes inflammation. To overcome this problem, they replaced some of the nucleosides (the building blocks of RNA) with modified ones that evade detection by the immune system. This increased the stability and translational efficiency of mRNA molecules and reduced their toxicity.
The second discovery was that adding a specific chemical structure called a cap at the end of the mRNA molecule enhances cell uptake and encoded protein expression. This further improved the potency and durability of mRNA vaccines.

Their discoveries were published in a series of papers between 2005 and 2010123. Still, they received little attention until the COVID-19 pandemic hit in 2020. Their work laid the foundation for two of the most successful COVID-19 vaccines developed by Pfizer/BioNTech and Moderna/NIAID, administered to billions of people worldwide.

The Nobel Assembly at Karolinska Institutet awarded Karikó and Weissman the 2023 Nobel Prize in Physiology or Medicine for their discoveries concerning nucleoside base modifications that enabled the development of effective mRNA vaccines against COVID-19. The Nobel Committee praised them for their “visionary” and “transformative” contributions to vaccine science, which have “fundamentally changed our understanding of how mRNA interacts with our immune system”. They also highlighted their role in “the unprecedented rate of vaccine development during one of the greatest threats to human health in modern times”.
Karikó and Weissman are the first laureates to win the Nobel Prize for work related to COVID-19, which has claimed over 4 million lives worldwide. Their discoveries have helped combat this devastating pandemic and opened up new possibilities for future vaccine development against other infectious diseases, as well as cancer and autoimmune disorders.

The 2023 Nobel Prize in Medicine is a testament to the power of scientific curiosity, perseverance, and collaboration. It also reminds us of the importance of investing in basic research, which can lead to unexpected and life-saving applications.

References :

https://www.nobelprize.org/prizes/medicine/2023/summary/

https://www.indiatoday.in/science/story/watch-live-nobel-prize-in-medicine-2023-announcement-by-karolinska-institutet-2443272-2023-10-02

Sikkim’s Flash Flood Crisis: How Melting Glaciers are Triggering Disastrous Outbursts of Glacial Lakes

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

I Bala Aditya, MBA 2023-25, Vinod Gupta School of Management, IIT Kharagpur

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Sikkim witnessed a catastrophic flash flood on October 4, 2023, that claimed at least 80 lives and caused widespread damage to infrastructure, livelihoods, and ecosystems. The flood was triggered by the sudden breach of a glacial lake known as South Lhonak Lake, which released massive water and debris into the Teesta River. The flood reached and destroyed the Teesta III Dam, a major hydropower project before its gates could be opened. The flood also affected downstream areas in Sikkim, West Bengal and Bangladesh, where hundreds of villages were inundated.

This disaster was not an isolated event but a manifestation of the increasing risk of glacial lake outburst floods (GLOFs) in the Himalayan region due to climate change. Glacial lakes are formed by the melting of glaciers, which are retreating at an alarming rate due to rising temperatures. According to a recent study by the International Centre for Integrated Mountain Development (ICIMOD), the Himalayan region could lose up to two-thirds of its glaciers by 2100 under a high-emissions scenario. This would result in more glacial lakes forming and expanding, posing a more significant threat of GLOFs.

GLOFs are sudden and unpredictable events that can release lakhs of cubic meters of water in hours or even minutes. They can cause devastating impacts on downstream communities and infrastructure, such as bridges, roads, dams, and power plants. GLOFs can also disrupt water supply, agriculture, fisheries, tourism, and biodiversity. Moreover, GLOFs can increase the risk of other hazards, such as landslides, mudflows, and avalanches.

The frequency and magnitude of GLOFs are expected to increase due to climate change. According to a report by the Ministry of Environment and Forests (MoEF), India has identified 34 potentially risky glacial lakes in the Himalayan region, of which 21 are in Sikkim. The report also projected that the frequency of GLOFs in India would increase by 3-4 times by the end of the century under a high-emission scenario.

The recent flash flood in Sikkim has exposed the state’s and its people’s vulnerability to GLOFs and other climate-induced hazards. It has highlighted the need for urgent action to decrease emissions and adapt to climate change. Some of the possible measures that can be taken to prevent or mitigate GLOFs are:

• Monitoring and mapping of glacial lakes using satellite imagery and ground-based observations
• Installing early warning systems and evacuation plans for downstream communities
• Reducing water levels in glacial lakes by artificial drainage or siphoning
• Strengthening embankments or constructing barriers to contain glacial lake water
• Enhancing disaster preparedness and response capacities at local, state, and national levels
• Promoting climate-resilient development and livelihoods for mountain communities
• Increasing awareness and education on GLOFs and other climate risks among stakeholders

These measures require coordination and collaboration among various actors, such as government agencies, scientific institutions, civil society organizations, local communities, and international partners. They also need adequate financial and technical resources, political will and public support.

The flash flood in Sikkim was a wake-up call for all of us to act on climate change before it is too late. We cannot afford to lose more lives and livelihoods to such disasters. We must work now to save our glaciers, rivers, mountains, and future.

References:

Parry, Jo-Ellen. “CARIAA Working Paper No. 15.” 2016, https://core.ac.uk/download/228788368.pdf

As its glaciers melt, Nepal is forced into an adaptation not of its choosing. https://news.mongabay.com/2021/12/as-its-glaciers-melt-nepal-is-forced-into-an-adaptation-not-of-its-choosing/

Auckland’s Climate Plan. https://www.aucklandcouncil.govt.nz/plans-projects-policies-reports-bylaws/our-plans-strategies/topic-based-plans-strategies/environmental-plans-strategies/aucklands-climate-plan/Pages/default.aspx

https://www.hindustantimes.com/technology/isro-to-monitor-himalayan-lakes-as-sikkim-floods-kill-86-101696936195726.html

https://www.indiatoday.in/india/story/sikkim-flash-flood-lake-burst-avalanche-cloudburst-teesta-river-reason-earthquake-isro-satellite-images-2445278-2023-10-06

Why the GI tag for Goan Cashews is a big deal for the state and its farmers

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

I Bala Aditya, MBA 2023-25, Vinod Gupta School of Management, IIT Kharagpur

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Goa is known for its famous for its nightlife, beaches, and cuisine, but its cashews make it unique. The cashew nut, or kaju in Konkani, is integral to Goan culture and economy. It is used in various dishes, sweets, and drinks, such as the popular feni liquor. It is also a popular souvenir and gift item for tourists and locals.

But did you know that the cashew nut is not native to Goa? It was brought by the Portuguese from Brazil in the 16th century. Since then, it has adapted to the local soil and climate, producing a distinctive taste and quality. The Goan cashew nut is more minor, sweeter, and crunchier than those grown in other parts of India or abroad.

However, few people know this difference and often buy cheaper imported cashews labelled ‘Goan cashews’ by unscrupulous traders. This affects not only the consumers deceived by false claims but also the local cashew farmers and processors who face unfair competition and lose their market share.

To protect the authenticity and reputation of the Goan cashew nut, the Goa Cashew Manufacturers’ Association (GCMA) applied for the geographical indication (GI) tag, with the support of the Department of Science, Technology and Waste Management, Government of Goa. The GI tag is a legal recognition that certifies that a product originates from a specific region and has unique characteristics and qualities linked to that region. It serves as a trademark that helps consumers identify genuine products and prevents others’ misuse of the name or logo.

Last week, the Goan cashew nut (kernel) was granted the GI tag by the Geographical Indications Registry in Chennai. This is an excellent achievement for the cashew industry in Goa, as it will help them promote their product in the national and international markets and increase their demand and value. It will also benefit the cashew farmers and processors, who will get better prices and incentives for their produce. The GI tag will also help preserve the cultural and historical legacy of the Goan cashew nut, which has been an integral part of Goa’s identity for centuries.

The GCMA president Rohit Zantye said that Goa cashew nuts were synonymous with Goa and expressed his hope that the GI tag would help consumers differentiate between authentic Goan cashews and those sourced from outside. He also said that the GCMA would take steps to ensure quality control and compliance with the GI norms.

The Goan cashew nut is one of many products from Goa to get the GI tag. The Khola chilli, a spicy variety of red chilli grown in Canacona taluka, had also received GI recognition. These products reflect the rich diversity and heritage of Goa’s natural resources and agricultural practices.

The GI tag for Goan cashews is a big deal for the state and its farmers, as it will help them showcase their unique product to the world and boost their income and pride. It will help customers make informed choices and enjoy the authentic taste of Goa’s cashews.

References :

What the GI tag can mean for the cashew industry in Goa

In Graphics: What is the GI tag that the Goan cashew has received?

GOAN CASHEW GETS GI TAG