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While the stock market is not the best barometer of public health measures' success, its dim view of the government’s ‘liberalised and accelerated’ vaccination programme may seem a bit surprising at first. The Sensex was slightly lower at 12.37pm over its previous close and it is down by around 4percent since early April.
The government met nearly all the demands that opposition politicians, state governments, industry and vaccine makers have been making for some time now. Dr Manmohan Singh had also recently written a letter to the government with suggestions, some of which are present in the revised policy. All adults aged 18-45 can be vaccinated from May 1. The central government has reserved half of domestically-made vaccine supply in a month, with the balance up for grabs for state governments and private companies. Imports can be entirely supplied outside the central government vaccination programme.
Vaccine companies are free to set a price for the 50percent allocated for the private sector and state governments, with a condition that it be made public. The government has also decided to pay Serum Institute of India and Bharat Biotech sums of Rs3000crore and Rs1500crore as advances, to enable them to produce more doses and give them an assured supply roadmap.
In How soon will more vaccines come to the Indian market? we have attempted to answer a question that would be uppermost on everybody’s minds. There are many things that have to fall in place and there’s a very short window of 10 days for that, price being one of the most important aspects. Then there are questions like: where is the supply going to come from, the prospects for imports and of which vaccines apart from Sputnik V that has been approved, where will states find the money and so on. Do read to know what may lie ahead.
The stock market’s reaction appears to be factoring in the near term difficulties that remain and how worse the second wave could get before it gets better again, which will determine how harsh the lockdowns could get. The vaccination may help deal with the next wave but this one is likely to run its course. The effect on economic activity is already visible in our Economic Recovery Tracker update. As we show in our chart of the day, in the first wave of rising COVID-19 cases, the markets fell but recovered smartly on the back of all the stimulus-driven support measures. The second wave is seeing the rise in cases coinciding with a fall in equities.
Our research team has been keeping a close watch on the companies that could benefit from the government’s vaccination drive, here’s their take on these pharmaceutical stocks in light of the revised policy: Deregulation of vaccine rollout: What it means for pharma players.
What else are we reading today?
ICICI Lombard posts good numbers in FY21 under COVID cloud. Can it repeat the show?
How Credit Suisse rolled the dice on risk management — and lost (republished from the FT)
Massive gains in small-cap mutual funds: Is it time to take some profits?
RBI, bond market tug of war continues
Technical Picks: Vedanta, ACC, Thyrocare and Bank Nifty (These are published every trading day before markets open and can be read on the app)
Ravi Ananthanarayanan
Moneycontrol Pro
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