Money managers have started moving their investments as the market consolidates. Zomato was removed from the India model portfolio by Jefferies in favour of metals, and the global head of equity strategy also made some adjustments.
Chris Wood added REC Limited, formerly known as Rural Electrification Corporation, to the India long-only stock portfolio with a weighted of 4%. He accomplished this by removing one percentage point from each of his interests in HDFC Bank, Bajaj Finance, ICICI Prudential Life Insurance, and ICICI Lombard General Insurance.
ICICI Bank, SBI, CAMS, Reliance Industries, ONGC, Godrej Properties, Century Textiles, DLF, Macrotech Developers, Maruti Suzuki, L&T, Adani Ports, and Concor are more companies included in the India long-only portfolio in addition to those already mentioned.
Additionally, Woods reduced his position to Bajaj Finance in the long-only Asia ex-Japan portfolio. With this change, the overall percentage allocated to Indian stocks dropped from 37% to 36%. The largest allocation in the portfolio is still to India.
Recently, there has been selling pressure on Bajaj Finance. Additionally, some analysts have reduced their expectations for the stock.
Additionally, Woods reduced his position to Bajaj Finance in the long-only Asia ex-Japan portfolio. With this change, the overall percentage allocated to Indian stocks dropped from 37% to 36%. The largest allocation in the portfolio is still to India.
Recently, there has been selling pressure on Bajaj Finance. Additionally, some analysts have reduced their expectations for the stock.
According to Wood, “from the perspective of the stock market, all of the aforementioned increases the likelihood that Japan is exiting a deflationary era, which means that domestic institutions should, in theory at least, start to think about re-allocating out of yen fixed income into Japanese equities sooner rather than later.” Since the Bubble burst in 1990, they haven’t done anything like this.
He claims that given the fact that Topix has already outperformed the 10-year Japanese G-Sec by 195 percent on a total return basis since November 2012, such an allocation from fixed income to equities should have occurred long ago.
“In the eyes of GREED & FEAR, foreigners ought to improve Japan. The yen has been at its lowest level in real effective exchange rate terms since June 1969, making Japan appealing from a valuation basis, especially for foreign investors, he added.
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