Do it yourself

The pace of vaccination across the globe is accelerating with each passing day. It is hopes that in next 6 months, we may have a reasonable number of people inoculated against Covid-19 infection; and the life may begin to normalize (even if it is new normal!) and become more predictable as compared to the life in 2020. However, from investors’ perspective a rather strange thing seems to be happening. Many investors had bought shares of leading vaccine manufacturers in the hope of extraordinary gains. To their disappointment, many of them are suffering losses. Pfizer Inc. (-8.1% in one year) and AstraZeneca (-4.75% in one year) are two examples; though Moderna Inc (up 740% in one year) has done well. In Indian context, AstraZeneca (-20% YTD 2021); Pfizer (-13% YTD 2021) Dr Reddy’s Lab (-8% YTD 2020) have all performed poorly on stock exchanges. The other listed vaccine prospect Cadila Healthcare (-2% YTD 2021) is also doing poorly. Obviously, it is a case of the excessive exuber...

UK has allowed the administration of vaccine for SARS-CoV-2 virus (commonly known as Covid-19) developed by Pfizer. Russia and Chinese authorities have also confirmed approval of separate vaccines. In India also couple of developers has expressed confidence that an effective vaccine will soon be available for Indian population. This is certainly a matter of relief for the distressed mankind living in fear since outbreak of the pandemic. However, for the investors in stock markets wider availability of vaccine could be a matter of slight concern. So far the investors in equity have had a decent run in 2020, regardless of the severe correction in the early days of the pandemic. In my view, a large part of the price gains in equity stocks could be attributed to the accommodative monetary policy adopted by the central bankers world over. In past 9 months, a significant part of the cheap and abundant money may have actually flown to the financial assets (mostly equities) as (i) the re...