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Exclusive | Is the India story over for FIIs? BofA says investors don’t want to miss what’s next

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Exclusive | Is the India story over for FIIs? BofA says investors don't want to miss what's next
India has slipped to the seventh spot in global equity market capitalisation rankings as foreign investors chased AI-driven opportunities in markets such as Taiwan and South Korea, raising concerns about whether the country’s appeal is fading. After meeting investors at BofA India Conference in Mumbai, BofA Securities India MD and Head of Research Amish Shah says global funds don’t want to be left out when the India story starts to pick up again.

“There’s still genuine excitement about India. Investors know it’s an economic cycle, and they know India has multiple themes and sectors that will do well over time,” Shah said in an exclusive interview with ET Markets on the sidelines of their India conference.

Edited excerpts from a chat:

Let me start by asking you about the Q4 earnings season. Do you think India Inc managed to obtain passing marks?

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Results in general were a beat. But once you start analyzing it further in detail, the picture gets more nuanced.

Two thirds of the Nifty companies that reported delivered a beat. That sounds encouraging, but when you look at the absolute quantum, the total earnings growth from Nifty companies came in at 4.6%, which is quite muted in India’s context.
The second data point is that 45% of that 4.6% earnings growth came from commodity companies due to higher steel prices, higher aluminum prices, and so on. From an investor perspective, you don’t want to assign high valuation multiples to that, because these are considered cyclical earnings. It’s not like a consumer company gaining market share, where that franchise is durable. Markets don’t reward commodity-driven earnings with premium valuations.
Now, if you look at NSE 200 companies, earnings growth was 9%. But again, one third of that came from commodity firms, and unfortunately 80% of companies in that universe missed estimates and only 20% were a beat.
So it really depends on where you want to swing. If you’re an optimist, you focus on two-thirds of Nifty companies delivering a beat. If you’re more balanced, you get into these nuances — it was a marginal beat, mostly driven by commodities, and higher commodity prices will eventually lead to margin pressures in upcoming quarters for a wide range of other companies. The earnings growth outlook is therefore also challenged.

So while Q4 wasn’t bad, I think it’s a signal that earnings are heading weaker going forward.

So one narrative in the market has been that low inflation has led to low earnings growth. Won’t this commodity inflation that you are talking about actually translate into higher growth?

Yes and no. Higher commodity prices lift earnings for commodity companies, but create margin pressure for non-commodity companies — the consumers of those commodities. On an aggregate basis, our estimate is 8.5% earnings growth for FY27, which we describe as low growth on a low base. FY26 as a whole came in at around 6%, so 8.5% off that base is not very encouraging.

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Are you not worried about downgrades in Q1 and Q2 given the impact of higher prices of crude oil and other commodities?
No because we had already taken our earnings estimates down in two rounds. First in early March, then in early April. We came down from 14% to 8.5%, factoring in the West Asia conflict — higher crude, higher commodities, the possibility of higher rates, and a weaker rupee. We put all of that together and revised down on a bottom-up basis.

However, when I look at consensus, earnings downgrades are definitely a risk. Consensus is still penciling in 15% earnings growth versus our 8.5%. I don’t believe 15% is going to be the reality. As companies disappoint in the June and possibly September quarters, consensus will have to cut meaningfully. We may not have to.

Talking about the market’s trajectory, do you think the worst of the West Asia crisis is priced in at the index level?

That gets into the timing of how long the conflict lasts, which unfortunately nobody knows. You can only draw scenarios. Our base case assumes the conflict ends by the end of June for the sake of an assumption.

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So 8.5% earnings growth is premised on the conflict resolving by the end of June. If it drags beyond that, we have a bear case modeled. If it drags even further, we have a worst case. We can only run sensitivities.

Given we’re already in June, there’s no bull case left anymore. We’re hoping the base case holds, but it could easily become a bear or worst case.

So what does your bear case scenario look like?
The bear case is where markets first de-rate from the 15% consensus growth expectation down toward our 8.5%, and that leads to capitulation of retail domestic flows. Markets have already delivered flat returns for about 19 months. At some point, retail investor fatigue could set in — if growth isn’t materializing, maybe a fixed deposit with a guaranteed return looks more attractive.

If that happens, the way to think about it is this: if India’s nominal GDP growth is 10%, you’d expect Nifty 50 companies to do better because they should be market share gainers. But if they’re growing at 8.5% — below nominal GDP — you logically want to pay them a lower-than-average valuation multiple. So the bear case implies below-average valuations on realistic earnings of 8.5%, which brings you to roughly 12% downside from current levels.

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FII outflows have been persistent. Is it valuations, lack of earnings growth, or domestic liquidity providing an easy exit?
It’s a combination. From the September 2024 peak to today, FII outflows total roughly $52 billion. Against that, domestic investors have put in around $60 billion — so yes, domestic flows have clearly been providing FIIs an exit.

But the core reasons for the outflows are: first, plenty of alternatives globally — Korea and Taiwan on the back of AI, Brazil on commodities, Japan on fiscal expansion, even China is cheap at 13x versus India at 20x. Second, India’s growth story has been impacted — lower growth, higher valuations, macro headwinds from the West Asia conflict, weaker rupee, potential rate hikes. And third, LTCG taxes and currency depreciation eat into returns for foreign investors, making the India trade less compelling when you’re already making little or negative returns.

What can India do to bring FIIs back?
Several things. Energy security reforms, even if they take years to implement, give investors a visibility that India is fixing its current account deficit problem structurally. Shipbuilding and power distribution reforms create new growth avenues. Rationalization of regulations and taxes is important. And on the FDI side, India needs to continue improving on the basics — smooth land acquisition, skilled labor, cheaper industrial power, good logistics infrastructure, and easier business processes. We’ve made a lot of progress on each of these, but we’re not at 10 out of 10 yet.

On the rupee — it’s falling because India’s balance of payments is negative. We import a lot of crude and gold, creating a current account deficit. The three main capital inflows that should offset this — FDI, FII, and remittances — are all under pressure. Net FDI is actually single-digit when you account for strategic investors monetizing stakes and repatriating capital. FII flows are negative. And remittance flows are circular — if the rupee is depreciating, Indians abroad hold back dollars waiting for a better rate, which itself adds to the depreciation pressure.

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What are the key takeaways from the conversations that you are having with investors at your India conference?
There’s still genuine excitement about India. Investors know it’s an economic cycle, and they know India has multiple themes and sectors that will do well over time.

They want to understand what policymakers are thinking on energy security, fiscal consolidation, capex, and reforms. They want to know how corporates are managing the West Asia headwinds.

They’re doing homework and want to be prepared to know what they want to buy if some of these things were to play out. They don’t want to be left out when India story starts to pick up again.

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EasyJet rejects takeover offer from US investment firm Castlelake

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The tails of three EasyJet planes, painted red and white, parked on a runway.

EasyJet has rejected a fourth takeover offer worth £4.93bn from Castlelake.

The low-cost Luton-based airline said the US investment firm’s bid was worth £6.50 a share, compared with the previous offers of £5.60, £6 and £6.25 a share.

A spokesperson said it was giving Castlelake until 17:00 BST on 5 July to make a firm offer or walk away.

“Having carefully reviewed it with its advisers, the board of EasyJet continues to regard the fourth proposal as substantially undervaluing the company and its prospects and continuing to give rise to significant questions of deliverability,” said EasyJet.

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EasyJet said the takeover interest came at a time when its share price had been pushed down by concerns about the consequences of the Iran war.

The FTSE 250 firm’s shares had dropped by about 30% over the past year, before news of Castlelake’s interest.

EasyJet said it remained “concerned” about Castlelake’s ownership structure and ability to deliver any offer, adding the investor would need to provide “satisfactory assurances and commitments” on those issues.

Castlelake has assets under management worth $36bn (£27.3bn).

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Under the deal, EasyJet would be 49% owned by Castlelake and co-investors including Brookfield Asset Management, and 51% owned by individual European Union investors.

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How you can save money on your energy bill as debts rise

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Someone holding a smart meter

The amount of money owed to energy suppliers by customers has risen again to a new record high of £4.79bn.

Regulator Ofgem said that total debt and arrears in England, Wales and Scotland had risen by 15% in a year.

The data, external is updated every three months, with the newly-published figures covering the period from January to the end of March. They relate to energy customers who have been in debt for more than three months.

Average arrears for those without a repayment plan hit £1,876 for electricity and £1,623 for gas – more than twice the amount as those who have a repayment agreement.

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Energy prices will rise for millions of households in July – driven by the increase in the cost of gas.

Experts say there are options to cut bills, even though people may feel they have already made every saving possible.

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Microsoft: A Pullback Without Reason

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Microsoft: I Like This Price And I Like This Strategy More Than The Stock (NASDAQ:MSFT)

Microsoft: A Pullback Without Reason

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Green light for $21m social housing in East Fremantle

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Green light for $21m social housing in East Fremantle

Foundation Housing and H-U have cleared a planning hurdle to add dozens of social housing dwellings to East Fremantle, after a $21 million plan was approved.

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Ritchie Bros expands WA footprint, adding $11m Midland site

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Ritchie Bros expands WA footprint, adding $11m Midland site

The global equipment auctioneer has added to its footprint in WA, completing the takeover of a local company’s Midland headquarters in an $11 million sale.

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Palestinians decry Israeli push for control over ancient West Bank sites

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Palestinians decry Israeli push for control over ancient West Bank sites


Palestinians decry Israeli push for control over ancient West Bank sites

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AbbVie Shares Trade Flat as Pharmaceutical Giant Maintains Focus on Immunology and Oncology Pipeline

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An Australian court upheld a landmark class-action lawsuit against Johnson & Johnson for "negligent" marketing of pelvic mesh implants

AbbVie Inc. shares closed virtually unchanged on Wednesday, finishing at $234.89 after a modest gain of $0.13, as investors assessed the company’s position in a competitive pharmaceutical landscape marked by patent expirations and pipeline developments.

The stability in trading reflected continued confidence in AbbVie’s core immunology franchise, particularly its flagship product Humira’s successors and growing oncology portfolio. The biopharmaceutical company has navigated the loss of exclusivity for its biggest product through strategic diversification and acquisitions.

AbbVie’s performance demonstrates resilience in a sector facing pricing pressures, regulatory scrutiny and competition from biosimilars. Its focus on specialty medicines and innovative therapies has supported revenue stability despite challenges in its legacy portfolio.

The company continues investing heavily in research and development, with emphasis on advancing treatments for autoimmune diseases, cancer and neurological disorders. Recent data readouts and regulatory milestones have generated interest among analysts and investors.

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Key Product Performance

Humira, once the world’s best-selling drug, continues facing biosimilar competition, but AbbVie has successfully transitioned patients to newer immunology assets like Skyrizi and Rinvoq. These products have shown strong uptake and expanded indications, helping offset revenue declines.

Oncology remains a growth driver, with medicines like Imbruvica and Venclexta maintaining significant market presence. Pipeline candidates in solid tumors and blood cancers could provide additional catalysts in coming years.

Aesthetics and eye care products, including Botox and Restasis, contribute diversified revenue streams less exposed to patent cliffs. These consumer-facing businesses provide stability amid volatility in specialty pharmaceuticals.

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Strategic Initiatives

AbbVie’s acquisition strategy has played a key role in portfolio renewal. Strategic purchases have bolstered capabilities in targeted therapy areas and expanded its global footprint.

The company maintains a disciplined approach to capital allocation, balancing R&D investment with shareholder returns through dividends and buybacks. Its strong cash flow generation supports these priorities.

Digital transformation and data analytics initiatives aim to enhance clinical development efficiency and commercial execution. These efforts position AbbVie to compete effectively in an increasingly technology-driven healthcare environment.

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Industry Challenges

The pharmaceutical sector faces ongoing pressures from drug pricing debates, patent expirations and regulatory requirements. AbbVie’s experience navigating the Humira transition provides lessons for managing future losses of exclusivity.

Biosimilar competition has intensified, requiring innovative defense strategies and lifecycle management. Companies with robust pipelines and diversified portfolios are better positioned to weather these cycles.

Global healthcare spending trends, reimbursement policies and demographic shifts influence demand for AbbVie’s products. Aging populations in developed markets support long-term growth in chronic disease treatments.

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Investment Outlook

AbbVie attracts investors seeking dividend growth and exposure to innovative medicines. Its yield and history of increases appeal to income-focused portfolios.

Valuation metrics reflect expectations for pipeline success and margin management. Risks include clinical trial outcomes, regulatory decisions and competitive dynamics.

Longer-term prospects remain positive given AbbVie’s established franchises and development programs. Successful commercialization of new therapies could drive renewed growth.

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Analysts monitor upcoming clinical data and regulatory milestones closely. Execution on commercial strategies for key products will influence financial performance.

Research and Development Focus

AbbVie’s pipeline spans multiple therapeutic areas with several candidates in late-stage development. Advances in immunology, oncology and neuroscience could yield significant new treatments.

Collaboration with academic institutions and biotechnology companies expands innovation reach. These partnerships accelerate discovery while sharing development risks.

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Precision medicine approaches and biomarker-driven therapies represent growing areas of emphasis. Such strategies aim to improve efficacy and safety profiles for patients.

Investment levels in R&D remain substantial, reflecting commitment to long-term value creation. Balancing near-term financial targets with pipeline investment requires careful management.

Corporate Responsibility and Sustainability

AbbVie engages in initiatives addressing healthcare access, diversity and environmental impact. These efforts enhance reputation and align with stakeholder expectations.

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Patient assistance programs and global health partnerships demonstrate commitment beyond commercial activities. Such initiatives support brand value and talent attraction.

Sustainability reporting covers environmental footprint, supply chain practices and governance standards. Transparency in these areas has become increasingly important for investors.

Outlook

AbbVie’s recent share price performance reflects typical market dynamics in the healthcare sector. The company’s strategic direction and execution capabilities will determine its ability to deliver sustained growth.

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Upcoming catalysts include clinical trial results, regulatory decisions and commercial updates. Management will continue balancing innovation investment with financial discipline.

The pharmaceutical industry’s evolution toward personalized medicine and advanced therapies creates opportunities for established players like AbbVie. Its strong foundation in immunology and expanding oncology presence position it favorably.

As the company navigates patent landscapes and competitive pressures, focus remains on delivering value for patients and shareholders. AbbVie’s track record suggests capability to adapt and thrive in changing healthcare environments.

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The Things Business Owners Overlook When Scaling (and How to Stay Ahead)

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Growth feels like the goal, right up until the new problems arrive. More staff, bigger premises and more equipment all bring obligations that were never an issue when the business was small, and most of them are easy to miss in the rush.

Here are the things business owners overlook when scaling, and what to put in place before they catch you out.

What do business owners overlook when scaling?

The duties that catch growing businesses out are usually the ones nobody flags in advance: statutory inspection of new equipment, gaps in insurance cover, tighter cashflow despite rising sales, and the HR obligations that arrive with a bigger team. Each is manageable on its own. Together, they account for most growing-pain headaches.

The items worth checking as you scale:

  • Statutory examination duties on machinery and equipment
  • Insurance that has quietly fallen behind the size of the business
  • Cashflow that gets tighter as you grow, not looser
  • HR and employment obligations that scale with headcount
  • Premises duties like fire risk assessments and electrical safety

The first one is the one almost nobody sees coming.

New equipment brings new legal duties

When a business takes on bigger kit, it takes on responsibilities that go well beyond keeping it running. Certain equipment must be independently inspected by law, at set intervals, by a competent person. This is separate from servicing, and a quick check by a member of staff does not satisfy it.

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Take on a forklift, a compressor or a mezzanine floor and you have taken on legal duties most owners have never heard of. Equipment like this needs regular statutory examination under regulations such as LOLER and PUWER, carried out by an independent inspection firm such as Nexus Examination, not just a quick once-over by a member of staff.

The intervals vary. Equipment used to lift people is typically examined every six months, other lifting equipment every twelve, and pressure systems under a written scheme. The report you receive is your evidence of compliance, so it matters as much as the inspection itself.

Cashflow gets harder, not easier

It catches owners by surprise, but growth eats cash. Bigger orders mean buying more stock and paying more wages before the customer has paid you, so a profitable business can still run short of money in the bank.

Watch the gap between money going out and money coming in. Keep a cash buffer, chase invoices properly, and be wary of taking on a large contract that ties up more cash than you can spare. Rising revenue is not the same as healthy cashflow.

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The insurance you had is probably not enough

The cover that suited a one-person operation rarely fits a growing one. Employers’ liability insurance becomes a legal requirement the moment you hire staff, and the penalties for trading without it are steep.

Beyond that, more premises, vehicles, equipment and people change your exposure across the board. Review public liability, contents, business interruption and professional indemnity as you grow, rather than assuming the original policy still does the job.

HR obligations multiply with headcount

A handful of hires turns employment law into a real consideration. Written terms of employment, paying at least the national minimum or living wage, and enrolling eligible staff into a workplace pension all become non-negotiable.

As the team grows, so does the need for clear contracts, basic policies and a fair process for managing people. Accidents at work may also need reporting under RIDDOR. None of it is complicated, but it does need doing properly before a dispute forces the issue.

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A quick checklist before your next growth step

Before you sign the lease, place the order or make the hire, run through this:

  1. List every new piece of equipment and confirm what statutory examinations it requires.
  2. Review every insurance policy against the current size of the business.
  3. Forecast cashflow for the growth, not just the extra revenue.
  4. Check your employment paperwork, pay rates and pension duties.
  5. Sort premises duties such as fire risk assessments and electrical safety.

Work through it once and most of these become routine.

Scaling rewards the owners who plan for the obligations as well as the opportunities. The growth itself is rarely the hard part. The exposure comes from the duty you never knew had landed on your desk.

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Researcher, Inventor and Founder of Cluster Solutions

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Researcher, Inventor and Founder of Cluster Solutions

Lee Lorenzen is the founder and CEO of Cluster Solutions, a California-based research and development company focused on clustered water technology.

With a background in biology, pharmacology and biomedical consulting, Lorenzen has spent decades studying the structure of water and its role in hydration and cellular function.

Born and raised in Northern California as one of eight children, Lorenzen developed an early interest in science and the natural world. He earned a Bachelor of Arts from the University of California, Berkeley, before continuing graduate studies in biology at California State University, Fullerton. He also completed advanced graduate work under the supervision of Hoang Van Duc, M.D.

Lorenzen began his professional career in 1974 as a Graduate Instructor in Biology at Chapman College. He later joined the Department of Pharmacology at the University of California, Irvine, as a Research Associate. From 1976 to 1989, he worked in biomedical consulting, gaining experience in research and applied science.

A major turning point in his life came after his wife Stephanie developed serious health issues in the 1980s. The experience led Lorenzen to study water behaviour at the cellular level and eventually develop clustered water technology. In 1989, he founded Cluster Solutions to continue that research and product development.

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Over the years, Lorenzen has received several U.S. patents related to clustered water processes, including U.S. Patents Nos. 5,711,950 and 6,033,678. His work has also been recognised by the Microsoft Alumni Foundation for research connected to AIDS and diabetes.

Today, Lorenzen continues to work with physicians, researchers and technical advisers while leading ongoing studies into water structure and hydration science.

Q: What first led you into science and research?

I grew up in Northern California as one of eight children, and I was always curious about how things worked. I enjoyed nature, biology and the outdoors from an early age. That interest eventually led me to study biology at the University of California, Berkeley. Later, I continued graduate studies in biology at California State University, Fullerton.

Early in my career, I worked as a Graduate Instructor in Biology at Chapman College and later as a Research Associate in the Department of Pharmacology at the University of California, Irvine. Those experiences gave me a strong foundation in research and scientific thinking.

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Q: What originally sparked your interest in clustered water technology?

The biggest turning point was personal. My wife Stephanie became seriously ill during the 1980s. That experience pushed me to start asking different questions about health, hydration and biological systems.

At the time, I felt there were gaps in the traditional models I was studying. I remember thinking, “Something is missing with this model.” That thought stayed with me for years.

Eventually, I became interested in the structure of water itself and how water behaves inside living cells.

Q: Was there a specific moment when your research changed direction?

Yes. I remember reading work by Nobel Prize winner Albert Szent-Györgyi about cellular water. That research helped connect several ideas for me.

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Later, I began studying natural healing springs around the world, including Lourdes in France. I noticed geological similarities in places where people reported unusual water properties. That led me deeper into research on water clustering and molecular structure.

The goal became understanding whether those natural conditions could be reproduced in a stable and controlled way.

Q: You founded Cluster Solutions in 1989. What was your original vision for the company?

The goal was to create a company focused entirely on research and development related to clustered water technology. I wanted a structure where the science could continue long-term.

My role has always been both scientific and operational. I oversee research direction, product development and strategic partnerships. I also stay directly involved in testing and evaluating the technology.

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Q: What makes clustered water different from other hydration products?

Most hydration products focus on adding ingredients to water, such as minerals, electrolytes or supplements. Our focus has always been on the structure of water itself.

We study how water molecules organise and how that organisation may affect hydration and nutrient transport at the cellular level. The research is centred on stabilising smaller molecular clusters rather than simply adding substances.

Q: Has it been difficult working in a field that challenges traditional thinking?

At times, yes. When ideas challenge existing assumptions, they are often questioned early on. That is part of scientific history.

You can look at people like Otto Ampferer or Jacques Benveniste. Their work faced resistance before parts of it were revisited later. Even major scientific figures have made incorrect predictions about what was or was not possible.

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That does not mean every new idea is correct. But it does mean research should be evaluated carefully and openly.

Q: How do you approach scientific credibility and long-term trust?

Consistency and transparency are very important. I work with physicians, researchers and technical advisers who can independently evaluate results.

I also believe in documentation and long-term testing. Research is not a one-time event. It is a continuous process of refinement, feedback and observation.

Over time, trust comes from staying involved and being willing to answer difficult questions directly.

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Q: What challenges have shaped your leadership approach?

Patience has probably been the biggest lesson. Research takes time. Acceptance takes time. You have to stay focused on the work itself rather than short-term reactions.

I have also learned that leadership requires structure. Discovery alone is not enough. You need systems for testing, collaboration and maintaining scientific integrity over many years.

Q: What keeps you motivated after all these years?

Research and development still motivate me. I enjoy solving problems and continuing to learn.

I also value hearing feedback from people who use the products or study the technology. Those conversations often lead to new ideas or new areas of research.

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Outside work, I enjoy spending time with my family and grandchildren and being outdoors. That balance is important.

Q: What advice would you give to people pursuing unconventional ideas?

Be prepared for scepticism. Document your work carefully and stay committed to the process.

Many discoveries take years to be fully understood. Patience, persistence and integrity matter more than quick recognition.

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Aussie shares fall as US dollar surges, oil retreats

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Aussie shares fall as US dollar surges, oil retreats

The Australian bourse has slipped, with a sell-off in precious metals, oil and other commodities dragging down resource companies as the US dollar surges and more ships pass through the Strait of Hormuz.

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