Is India the next China?
Actelion (OTC:ALIOY; VTX:ATLN)
One issue has amused me for a long time. In the international media, one often hears about India having replaced China as the fastest growing large economy. This is completely wrong.
Even if India grows at 7.5%, it adds a mere $129 to its per capita GDP. If China grows at 6.3%, it adds $520 to its per capita GDP. (China and India have comparable populations).
Linked is an article I wrote on the above. I will be speaking next month at PDAC (Toronto) on the same issue.
Conversation with Cory Fleck, Korelin Economics
Conversation with Adam Meister
Linked here is a recent interview I did with Brian Leni.
In my view, the situation with India is worse than what the above portray.
I have been asked by many Indians about how they can keep their gold outside India. Here are three options I can think of:
- Proven & Probable advice on offshore storage, and safe deposit boxes fully insured and secured by Brinks.
- Bullionstar can store gold for you in Singapore.
- GoldMoney has recently started services in Indian Rupee.
I prefer to invest in junior mining companies, but once in a while I like to look at the non-mining sector for diversification. One such company is Actelion (OTC:ALIOY; US$65.10; SIX:ATLN; CHF256.90).
Actelion is being acquired by Johnson & Johnson. Actelion shareholder will get paid US$280 in cash plus a share of a spin-off. Depending on how you value the spinoff, ATLN is worth between US$288 to US$298. (Note: ALIOY is an ADR and represents 1/4th of a share).
There is an arbitrage upside of about 12% to 16%. Given that this is a rather safe investment, I find this arbitrage very attractive.
On other matters….
Finally, after a long delay, the program for Capitalism & Morality is finally starting to take shape. Registration will open in the first week of March. Please pencil the seminar in for 29th July 2017.
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