Global Primary Industry Report

The risks of investing in stocks or financial markets should never be understated, therefore, it is important for every investor - whether an amateur or veteran- to consider all the factors to have a better understanding of a company’s stock. By conducting an in-depth analysis, the investors can safeguard themselves from the uncertainties which could impact the stock prices. A proper assessment of internal and external risks can help investors take informed decisions after due consideration given to volatile scenarios. At times it is challenging to assess the external factors (inflation, political uncertainty, changes in interest rates, etc.) for amateur investors and, as a result, they end up suffering huge losses.

History suggests that global primary industry has been resilient in nature and robust fundamentals have supported the industry in tough times.

Primary Industry report touches the following points:

• General View of the Industry: Primary industry are a broad mix of small businesses as well as larger enterprises that produce, process and move goods around the country and also export them around the globe.
• Drivers and Growth Catalysts: Growth of primary industry is mainly driven by the global demand, resulting in higher export revenues. According to OECD, population expected to be the key driver of consumption growth for most agricultural commodities.
• Valuation and Technical Analysis: Since the primary industry is not a very capital-intensive space, it is preferable to consider the P/E valuation methodology. Besides this method, we can resort to other valuation methods such as EV/Sales, Price/Sales and EV/EBITDA. While fundamental analysis helps us to arrive at an intrinsic value of the stock, technical analysis helps us in taking trading decisions based on demand and supply scenario which gets reflected in terms of chart patterns.
• Information on Sub-industry: Globally, primary industry consists of businesses like horticulture, seafood, dairy, forestry, wine, food and beverages.

Primary industry can be considered as a backbone of the global economy due to the industry’s size and the demand. Crisis situations like COVID-19 and Lockdown imposed to contain the spread of COVID-19 and resulting economic impacts are expected to influence the outlook of the industry.

 However, fundamental sector-specific drivers could help it to sail through the industry-wide challenges.

Given the resilient nature of the primary industry, and an increased global demand of the produce, the industry is well-positioned to weather the macro-economic uncertainties of the market.