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Indian economy would benefit from coronavirus outbreak: Pankaj Bobade

Taking the cue from the global central banks and softer crude prices, RBI is expected to see through the transient inflationary forces and cut policy rates, though it would not be an emergency cut.

March 07, 2020 / 12:31 PM IST

We are of the opinion that the Indian economy would benefit from the coronavirus outbreak, Pankaj Bobade, Head- Fundamental Research, Axis Securities, said in an interview with Moneycontrol’s Rakesh Patil.


Q. With coronavirus fears mounting up in India and other countries, how much will it impact the Indian economy?

A. Given that the coronavirus spread levels in India are very low and the tropical atmosphere acts as a natural immunity against viruses, we expect limited impact on India’s economy, considering our country's limited presence in global supply chain and not being a major exporter to the global markets. It would be benefiting from a fall in global crude prices, shift in supply chains away from China and fall in US Treasury bond yields.

Q. How do you look at the IPO market? Will SBI Card and other IPOs help to revive investor’s sentiment?


COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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A. The IPO market will perform similar to the larger economy and will not be immune to it. Strong individual IPOs, like SBI Cards, may still see a good response, but will feel the pressure of the larger economic conditions upon listing. Reviving sentiment for primary market is unlikely in the near term.

Q. Global central banks cut their interest rates, will RBI announce an emergency rate cut?

A. Global central banks have cut key rates due to the economic impact of coronavirus. Crude oil prices, one of the inflationary forces, have cooled off; soft crude prices are expected to come to the aid of the RBI MPC when they meet next time in April 2020.

Taking the cue from the global central banks and softer crude prices, RBI is expected to see through the transient inflationary forces and cut policy rates, though it would not be an emergency cut.

Q. Do you think that the current correction is a very attractive opportunity for investors? Which 3-4 midcap stocks will you bet on?

A. We look at the recent correction from a ‘glass-half-full’ instead of a ‘glass-half-empty’ perspective. We are of the opinion that the Indian economy would be a beneficiary of the coronavirus outbreak. The event would force the multinationals to redraw their supply chain strategies so as to reduce disproportionate dependence on China, and prevent the disruption of supplies in future due to any country-specific event. India is expected to benefit from this development.

Correction in crude prices augurs well for the forthcoming rate cut, thus helping the interest rate sensitive sectors. We like select private banks (both retail and corporate), consumption plays (staples and discretionary), speciality chemicals etc. from medium to long term investment horizon.

Disclaimer: The views and investment tips expressed by investment experts on are their own and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.
Rakesh Patil
first published: Mar 7, 2020 12:31 pm

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