India best post-covid recovery story in Asia, says Jefferies’ Chris wood; reaffirms bullish bet

India’s weightage in Chris Wood’s portfolio is at 14%, a 5.1% mismatch from MSCI AC Asia Pacific ex-Japan index.
(Image: REUTERS)

Falling coronavirus instances, booming stock markets, and a finances that offers an enormous enhance to spending are some elements which have made Chris Wood, Global head of fairness technique, Jefferies reaffirm his bullishness for Indian fairness markets. “With Covid cases in India now 88% off their peak amid growing hopes of herd immunity, India looks right now Asia’s best post Covid recovery story,” Wood stated in his weekly Greed and Fear letter. India’s weightage in Chris Wood’s portfolio is at 14%, a 5.1% mismatch from MSCI AC Asia Pacific ex-Japan index. 

Budget will get a thumbs up

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Earlier final week, Wood stated that the important thing level to concentrate on in the Union Budget is that each one the incremental enhance in expenditure goes to CAPEX, not social programmes. Although he has raised issues over fiscal deficit that’s pegged at 9.5% of GDP for this fiscal year and  6.8% of GDP for the subsequent. “Clearly, the question raised by such an approach is whether the capex is done efficiently, in terms of the targeted areas like roads, railways, subways and water. Still, no one can be in doubt that the investment is required. In GREED & fear’s view, if any Indian government can pull this off it is likely to be Narendra Modi’s with his long-demonstrated focus on detail,” he stated.

Cyclical recovery 

Loan restructurings, which is coming in decrease than anticipated for India’s main banks, was singled out as a constructive by Wood final week. Jefferies’ India expects financial institution mortgage progress to rise to 7.5% on-year in the subsequent monetary year.

Chris Wood had elevated publicity to India in his Asia ex-Japan portfolio by 1 proportion level, earlier in December final year. The ace strategist has seconded views of Jefferies’ head of India analysis Mahesh Nandurkar who forecasts earnings to develop by 37% for the approaching fiscal year and actual GDP is to surge 13.2% on-year foundation. In January, Chris Wood made a case for India’s residential property market as cyclical recovery picked up. “The hope is that a pickup in the likes of cement and steel capex should become visible later this year or early next year,” he had stated. India’s property and actual property market had gone by consolidation after structural reforms comparable to GST and RERA had been launched.

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