Remote working trends due to Wuhan Corona Virus - excerpts from McKinsey Report

Some work remotely 

• For most workers, some activities during a typical day lend themselves to remote work, while the rest of their tasks require their on-site physical presence.

• According to a study conducted by McKinsey In the US workforce, just 22 percent of employees can work remotely between three and five days a week without affecting productivity, while only 5 percent could do so in India. 

• In contrast, 61 percent of the workforce in the United States can work no more than a few hours a week remotely or not at all. The remaining 17 percent of the workforce could work remotely partially, between one and three days per week.

Change can have far reaching consequences 

• Currently only a small share of the workforce in advanced economies - typically between 5 and 7 percent - regularly works from home.

• A shift tp 15-20 percent of workers spending more time at home could have profound impacts on economies. 

• More people working remotely means fewer people commuting between home and work every day. This could have significant economic consequences including on transportation gasoline and auto sales, restaurants and retail urban centres, demand for office real estate and other consumption patterns. 

As changes got announced, changes happened 

• As tech companies announced plans for permanent remote work options, the median price of a one-bedroom rental in San Francisco dropped 24.2 percent compared to a year ago, while in New York City, which had roughly 28,000 residents in every square mile at the start of 2020, 15,000 rental apartments were empty in September, the most vacancies in recorded history.

• Remote workers may also shift consumption patterns. Less money spent on transportation, lunch, and wardrobes suitable for the office may be shifted to other uses. Sales of home office equipment, digital tools, and enhanced connectivity gear have boomed.

Is remote work good for productivity?

• So far, there is scant clarity—and widespread contradiction—about the productivity impact. Some 41 percent of employees who responded to a McKinsey consumer survey in May said they were more productive working remotely than in the office. As employees have gained experience working remotely during the pandemic, their confidence in their productivity has grown, with the number of people saying they worked more productively increasing by 45 percent from April to May.

• With nine months of experience under their belts, more employers are seeing somewhat better productivity from their remote workers. Interviews with chief executives about remote work elicited a mixed range of opinions. Some express confidence that remote work can continue, while others say they see few positives to remote work.

(Disclaimer : This blog is for information purposes only)

Wuhan Corona Virus aka COVID 19 pandemic - data and new learnings - Courtsey Mckinsey

Chronology

17th November 2019 - According to The South China Morning post the first case of the 2019 Corona Virus - also called as Covid -19 was first discovered in Wuhan.

20th December 2019 - There were at least 60 confirmed cased of the Virus and a lockdown was imposed. (Source : The Guardian)

31st December 2019 - China informed WHO of the situation calling it a "pneumonia of unknown cause" (Source : The WHO website)

10th of January 2020 - WHO issued its first guidance - calling the virus as "Novel Coronavirus" (Source : The WHO website)

23rd January 2020 - The Chinese Govt. announced lockdown of Wuhan (Source : Wikipedia)

30th January 2020 - First case of Corona Virus is discovered in India as a student from Wuhan travels to Kerala, India and tests positive. (Source : Wikipedia)

11th March 2020 - WHO declares Novel CoronaVirus also called as Covid -19 a "pandemic" (Source : The WHO website)

24th March 2020 - The Govt. of India announces a 21 day nationwide lockdown. (Source : Wikipedia)

NIFTY (past 1 year) - fall due to lockdown and after impact 

Situation now and Analysis - Wuhan Corona Virus 

(Disclaimer : This blog is for information purposes only)

Tesla Market Cap Crosses USD 500 billion - what's unique about the company

Tesla Market Cap Crosses USD 500 billion 

Tesla Inc crossed $500 billion in market value on Tuesday as investors lapped up its shares in the run-up to its addition to the S&P 500 index, extending a meteoric rally that has seen the stock gain more than six times this year.

Shares of the electric-car maker have risen nearly 28% since the S&P Dow Jones Indices decided to add the company to the benchmark index from Dec. 21.

Its shares rose as much as 3.9% to a record high of $542.35 in early trading, valuing the company briefly at $514 billion.

Tesla to become part of S&P 500

·       S&P Dow Jones Indices recently announced  that Tesla will join the S&P 500 effective prior to trading on Monday, Dec. 21.

·       Upon entry, Tesla is already one of the S&P 500's 10 most valuable companies based on Monday's closing prices.

History 

Tesla - an American electric vehicle and clean energy company - started business in the year 2003 in Palo Alto, California. 

The company's name is a tribute to inventor and electrical engineer Nikola Tesla. Eon Musk who is the current CEO of the company was the fourth employee of the company. 

Tesla has been pushing the envelope on battery usage since its inception. The 2008 Tesla Roadster was the first highway-legal production car to employ lithium ion batteries. It was also the first to manage a range of over 200 miles. 

Sales 

Tesla's global vehicle sales increased by 50% in 2019 - over 2018. 

In 2020 its sales have already crossed a million mark. They are already 3 times that in 2019. Its Model 3 has already sold more than 500,000 cars making it the best selling electric car in the world.

No wonder then its shares have skyrocketed.

Aspirational 

The market for fully electric vehicles is growing.

Some reasons behind the growth include 

• new regulations on safety
• vehicle emissions
• technological advances, and 
• shifting customer needs and expectations.

Tesla has been able to catch the attention of people seeking to buy electric cars and has also become an aspirational product. 

The Beginning Approach 

Tesla took a unique approach to getting its first vehicle in the market. 

It did not try to build a relatively affordable car that it could mass produce and market. Instead it took the opposite approach, focusing on creating a compelling car.

It was costly to build an electric car in the "initial days". Tesla therefore took the approach of making an "electric sports car".  An electric sports car could match upto price of other gasoline based sports cars and yet be aspirational.

The Next Stage 

Once Tesla established its brand it went in for growth. Tesla's current business model is based on

1. Direct Sales Tesla has created an international network of company-owned showrooms and galleries. They are located mostly in prominent urban centers around the world.  Tesla believes this helps it in the speed of its product development.
2. Supercharger Network Tesla has created its own network of Supercharger stations. These are places where drivers can fully charge their Tesla vehicles in about 30 minutes for free. This is to speed up the rate of adoption for electric cars.

Doing things differently 

According to Harvard Business Review Tesla does four things which sets itself apart 

1.  It develops cars as if it is a software product.
2.  It simplifies buying process putting the consumer in control. 
3.  It leverages its technological prowess in battery technology to minimise the total cost of ownership over the vehicle's timeline. 

(Disclaimer : This blog is for information purposes only)

How good are Covid-19 - WuhanCoronaVirus; vaccine candidates

Race for the Vaccine 

Researchers worldwide are working around the clock to find a vaccine against SARS-CoV-2, the virus causing the COVID-19 pandemic.  

To date, just two coronavirus vaccine has been approved.

1. Sputnik V – formerly known as Gam-COVID-Vac and developed by the Gamaleya Research Institute in Moscow – was approved by the Ministry of Health of the Russian Federation on 11 August. Experts have raised considerable concern about the vaccine’s safety and efficacy given it has not yet entered Phase 3 clinical trials.
2. A second vaccine in Russia, EpiVacCorona, has also been granted regulatory approval, also without entering Phase 3 clinical trials.

Operation Warp Speed 

The pandemic has created unprecedented public/private partnerships. Operation Warp Speed (OWS) is a collaboration of several US federal government departments including Health and Human Services and its subagencies, Agriculture, Energy and Veterans Affairs and the private sector. 

OWS has selected three vaccine candidates to fund for Phase 3 trials: 

1. Moderna’s mRNA-1273, University of Oxford and AstraZeneca’s AZD1222, and 
2. Pfizer and BioNTech's BNT162.

Pfizer and BioNTech were the first to release early findings on November 09 when they reported that their BNT162b2 vaccine is 90 percent effective against Covid-19. 

There was more good news yesterday when Moderna stated that their candidate is 94.5 percent effective. 

 
In both cases, the shot is administered twice over the space of several weeks. 

Despite the positive results, there is no data regarding whether the candidates prevent the coronavirus from being transmitted as well as for how long protection lasts. 

The Moderna vaccine does have an advantage over the Pfizer/BioNTech one in that it can be stored at temperatures of between 2C and 8C for 30 days, making distribution easier. 

The Pfizer/BioNTech vaccine, on the other hand, must be stored at -80C, exacerbating logistical challenges. 

 

Within OWS, the US National Institutes of Health (NIH) has partnered with more than 18 biopharmaceutical companies to accelerate development of drug and vaccine candidates for COVID-19 (ACTIV). 

COVPN and COVAX

The COVID-19 Prevention Trials Network (COVPN) has also been established, which combines clinical trial networks funded by the National Institute of Allergy and Infectious Diseases (NIAID): the HIV Vaccine Trials Network (HVTN), HIV Prevention Trials Network (HPTN), Infectious Diseases Clinical Research Consortium (IDCRC), and the AIDS Clinical Trials Group.
 

The COVAX initiative, part of the World Health Organization’s (WHO) Access to COVID-19 Tools (ACT) Accelerator, is being spearheaded by the Coalition for Epidemic Preparedness Innovations (CEPI); Gavi, the Vaccine Alliance; and WHO. 

The goal is to work with vaccine manufacturers to offer low-cost COVID-19 vaccines to countries. 

Currently, CEPI’s candidates from companies 

1. Inovio, 
2. Moderna, 
3. CureVac, 
4. Institut Pasteur/Merck/Themis, 
5. AstraZeneca/University of Oxford, 
6. Novavax, 
7. University of Hong Kong, 
8. Clover Biopharmaceuticals, and 
9. University of Queensland/CSL 

are part of the COVAX initiative. There are further candidates being evaluated in the COVAX Facility from the United States and internationally.

(Disclaimer : This blog is for information purposes only) 

New type of batteries are coming - better and faster than Lithium Ion ones.

History 

It was not until the early 1970s that the first non-rechargeable lithium batteries became commercially available. Attempts to develop rechargeable lithium batteries followed in the 1980s but the endeavor failed because of instabilities in the metallic lithium used as anode material.

Advantage - Lithium Ion or Li-on Batteries 

Lithium is the lightest of all metals, has the greatest electrochemical potential and provides the largest specific energy per weight. 

Rechargeable batteries with lithium metal on the anode (negative electrodes) could provide extraordinarily high energy densities, however, cycling produced unwanted dendrites on the anode that could penetrate the separator and cause an electrical short. The cell temperature would rise quickly and approaches the melting point of lithium, causing thermal runaway, also known as “venting with flame.”

Because of the inherent instability of lithium metal, especially during charging, research shifted to a non-metallic lithium battery using lithium ions. Although slightly lower in energy density than lithium metal, lithium-ion is safe, provided certain precautions are met when charging and discharging. In 1991, the Sony Corporation commercialized the first lithium-ion battery. Other manufacturers followed suit.

Growth of Li-on Batteries 

The global lithium-ion battery market size is estimated to grow from USD 44.2 billion in 2020 to USD 94.4 billion by 2025; it is expected to grow at a CAGR of 16.4%. 

The growth of this market is likely to be driven by the excellent features of li-ion batteries, increasing adoption of consumer electronics, and growing R&D initiatives by different organizations & battery manufacturers. 

Moreover, an increase in demand for plug-in vehicles, rising need for automation and battery-operated material-handling equipment in industries, propelling demand for smart devices and other industrial goods, and high requirement of lithium-ion batteries for industrial applications are other key driving factors.

New Batteries - Organic Battery 

Researchers from York University have explored a new type of organic battery that could last much longer than a typical battery while being safer for the environment. 

The study was published Thursday in the journal Batteries & Supercaps. Organic batteries use environmentally-friendly, organic materials instead of the toxic metals that are widely used. These organic materials would be used to take on the role of the electrode. Previously, protein-based solutions were explored by researchers across the globe, but this new study highlights a carbon-based organic molecule instead.

However, the technology isn’t ready yet. There are still some issues with the researchers’ organic battery, such as the significant capacity loss at lower temperatures of around 5 degrees Celcius, or 41 degrees Fahrenheit.

New Batteries - Organic Proton Battery which charges instantly 

Waiting for a battery to charge once it’s depleted is still a big hassle for mobile-device users, especially in these days when smartphones have become a ubiquitous part of everyday life.

Researchers at Uppsala University have developed an all-organic proton battery that could solve this problem by charging in a matter of seconds.  Moreover, the battery can charge more than 500 times without any significant loss of capacity, and use a solar cell for charging rather than needing to be hooked up to a typical wired electronic charger.

The battery, made from organic materials rather than the metals that comprise lithium-ion chemistries, could provide a breakthrough in developing an environmentally friendly and sustainable source of energy for electronic devices and even potentially electric vehicles (EVs), said Christian Strietzel of Uppsala University’s Department of Materials Science and Engineering.

As innovation picks up further many alternatives to Lithium Ion are likely to emerge which will be even more environment friendly and easier to operate and manage. 

The era of fossil fuels is likely to get over sooner than expected.

(Disclaimer : This blog is for information purposes only).

India China Macro Comparison Graphs

External Debt 

 India - External Debt in Millions USD (last 25 years)

China - External Debt in (HML) Hundred Million USD (last 25 years)

GDP 

India GDP - USD Billions (last 25 years)

China GDP - USD Billions (last 25 years)

Government Debt/GDP 

India - Govt. Debt to GDP (last 25 years)

China - Govt. Debt to GDP (last 25 years)

Households Debt to GDP 

India - Households Debt to GDP (last 25 years)

China - Households Debt to GDP (last 25 years)

Taxes (peak levels compared)

India - China corporate tax rates (last 25 years)

India China - personal Income Tax rates (last 25 years)

India China - sales tax rates (last 25 years)

(Disclaimer : This blog is for information purposes only)

Investing in the US markets pros and cons

 American Products and Gadgets 

We use many American products and gadgets (also softwares!!) in our daily lives.  With thousands of products being used all across the globe USA is home to some of the largest companies in the world. 

Hence when it comes to diversifying your investments beyond the boundaries of India, the US becomes the most likely option. 

US GDP & Stock Markets 

1. The US is around 15% of the world's GDP.
2. The US stock market constitutes around 55% of the global market.
3. Its home to the largest stock exchange in the world. 
4. It provides access to some of the world's leading companies.

Currency Risks 

When one invests in the US stocks from India you are dealing in two currencies - the Indian Rupee and the US Dollar.  While you remit INR from your banking account, it gets converted into USD when a stock is purchased.

And when the stock is sold, the proceeds in US dollars are converted to Indian Rupees before your account is credited. 

If you choose to open an overseas investment account then you have remit US dollars (which will get converted from INR in your account) to your overseas account. 

And when you want the monies back in India, then US dollars remitted from your overseas account will get converted to INR. 

Country Risks 

Since US is not our home country i.e. we do not live in the US therefore we have a limited understanding of the political, social and economic landscape there. 

In other words we do not have the feel "of the ground" there.  This is a risk and one must take steps to overcome such a risk. 

Regulatory Risk 

The US Government has different reporting and tax regulations when it comes to the stock markets. 

Any changes made in regulations can impact companies and hence their share prices.

As an Indian investor you need to stay abreast with the policy changes. 

Taxability Risks 

As an Indian investor, you need to keep taxes in mind - capital gains and dividend tax.  

It will be worthwhile to read about tax implications when one decides to invest abroad. 

(disclaimer : This blog is for information purposes only and not to provide any kind of advise or solicit any business)

The Covid-19 (Wuhan Corona Virus) economic damage trends and the long lasting changes it creates.

The Biggest Crisis 

The Wuhan Corona Virus is the most severe economic crisis the world has faced since The Great Depression.  Which means that for almost all of us this is the worst crisis of our lifetimes.

The trends are visible 

1. The most vulnerable have borne the brunt of the economic impacts.
2. Many small business are on the brink of failure. 
3. Investment in research is slowing down as funding reduces. 
4. Digital divide has been exposed.  Those not part of the digital economy are suffering more. 
5. The future of megacities is in question. The bigger city the stricter the lockdown world over.  Work from home changes the proposition of high cost living in megacities. 
6. Embracing productivity (saving costs) as business change to become more efficient.
7. Building and "health proofing"business in changing times.  Contactless - is the new paradigm.
8. Skill and talent revolution - as more and more business aim to go digital.
9. Countries and societies invest in digital infrastructure.
10. Investments in innovation ecosystems - to build digital ecosystems - as the world changes. 

Some Examples of Indian Companies using technology

Dr. Lal Pathlabs, a pathlab chain which functions like a retailer, uses its tech based understanding of customer footfalls to decide the optimal location, size and merchandize of their collection centres and laboratories. This helps improve the profitability of these labs and collection centres, making the whole network more efficient and sustainable. For instance, if a franchisee proposes to open a collection centre at a location which Dr. Lal’s tech platform considers to be sub-optimal, the firm will readily decline such a proposal. 

Amongst NBFCs, one of Bajaj Finance’s competitive advantages is to use its proprietary consumer data to selectively target borrowers with higher credit quality, who might not have already got a substantially high rating on the commonly available credit rating agencies’ databases.

Similarly, Page Industries has recently invested in an Auto-Replenishment System (ARS) at the distributor and EBO (exclusive brand outlets) level, which moves the judgement call of merchandising, away from these intermediaries, towards Page’s centralized supply chain systems. Such tech investments have helped reduce cash conversion cycle of Page by more than 15% over the past 2 years and Page’s working capital cycle days are now less than half compared to other listed inner-wear firms in India.

(Disclaimer : This blog is for information purposes only.  It is not to solicit any kind of business or provide any type of investment advise)

US presidential debates take centerstage.

The US Presidential debates 

According to Wikipedia - The 2020 United States presidential debates between the major candidates in the 2020 United States presidential election are being sponsored by the Commission on Presidential Debates(CPD).

The World watches 

After months of anticipation, Donald Trump and election rival Joe Biden are scheduled to meet on a debate stage for the first time in Cleveland on Tuesday night.

This could be Trump’s last best chance to turn the presidential race his way and win re-election.

Suffering from weeks of negative revelations in the news and trailing poll numbers, Trump needs a big score at the first presidential debate.

The China Factor...

The risks will be especially high over the next few critical months between now and the November U.S. presidential election, as both U.S. President Donald Trump and Chinese President Xi Jinping confront, and exploit, the messy intersection of domestic politics, national security imperatives, and crisis management. 

Domestic political opinion in both countries has turned toxic. 

The list of friction points is long, from cyber-espionage and the weaponization of the dollar to Hong Kong and the South China Sea. 

The channels for high-level political and military dialogue have atrophied when they are needed most. And both presidents face internal political pressures that could tempt them to pull the nationalist lever.

Markets are jittery

Wall Street’s main stock indexes were hovering near unchanged around mid-day in New York trading as investors steer clear of big bets ahead of Tuesday’s first presidential debate.

Concerns pile on as there may not be a clear winner in the days – and perhaps weeks – that follow election night.

Meanwhile FIIs (Foreign Institutional Investors) have been net sellers in the Indian Stock markets. 

(Disclaimer : This blog is for information purposes and not to solicit any business or to offer any kind of advise.)