According to Chris Wood, since the introduction of long-only portfolios in Asian markets, investment in Indian private sector banks has been the best.New Delhi:
Chris Wood of global brokerage firm Jefferies has long been bullish on the Indian stock market. According to the report of BQ Prime, he has once again reiterated that the stock market's major benchmark index BSE Sensex (Sensex) will touch the level of 1 lakh in the next five years, it is just a matter of time. In February last year, Christopher Wood said this in his Grid and Fear column. He still stands by his point.
Wood wrote in his latest Grid and Fear note that this target can be achieved given the estimate of 15% in earnings growth. Chris writes that the Indian bull market will continue to grow despite all the concerns. However, there is a concern about whether the Modi government will be re-elected and whether there will be further slowing down in retail investment activities.
Brokerage accounts reach 3.1 crore in April
Active brokerage accounts have fallen from a high of 2022.3 crore in June 8 to 2023.3 crore in April 1. Grid and Fear has mentioned the excellent outperformance of the Indian Private Sector Bank Index in the Global Banking Index. The Nifty Private Bank Index has gained 1,073% during this period. However, the MSCI AC World Banks Index has seen a decline of 20%.
According to Chris Wood, since the introduction of long-only portfolios in Asian markets, investment in Indian private sector banks has been the best. According to Wood, however, despite the recent defeat in Karnataka, the risk of Modi not being re-elected is very low. He said that in state elections, regional issues are important. Whereas, the focus is on big issues in the general election, where Modi has brought big changes in the last 10 years.
Domestic asset management is also in good condition.
India's domestic asset management (AMC) position also remains better, the note said. According to Wood, equities are an estimated 11.1% of domestic assets worth Rs 4.7 lakh crore at the end of March. Inflows continue in domestic equity mutual funds, with systematic investment plans (SIPs) contributing significantly. SIPs have been the main reason for the strengthening of the Indian stock market amid the recent tightening of monetary policy. The monthly SIP contribution during the last 12 months has averaged Rs 13,150 crore.
In addition, Wood has reduced the overweight of China and Australia in the Asia Pacific Ex-Japan Relative-Return portfolio. While India, Korea and Taiwan have increased.
Brokerage firm Zomato bullish
Chris Wood is very bullish on Zomato, has increased the weightage in Zomato to 4% in the India Long Only portfolio, has eliminated investment in HDFC Life Insurance. Zomato will be added to the global long-only equity portfolio, out of which JD.com and investment in Alibaba will be reduced by 2-2%.