Christopher Wood, global head of equity strategy at Jefferies, continues to bet big on India’s hot property market. The Greed & Fear team has observed that rising interest rates is not stalling recovery in the real estate space.
On that basis, he has decided to make changes to the India exposure in Asia ex-Japan and India long-only portfolios.
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In his Asia ex-Japan long-only portfolio, Godrej Properties has been removed and replaced by Macrotech Developers with 6 percent weighting, while the investment in Bajaj Finance has been reduced by one percentage point.
Godrej Properties has been on a buying spree, acquiring land parcels in Mumbai, Palghar, Noida and Bengaluru. Meanwhile, Macrotech Developers is all set to launch 16 new projects in the second half of this fiscal with an estimated sales potential of Rs 10,300 crore.
In Greed & Fear’s India long-only portfolio, exposure to Bajaj Finance has been reduced by two percentage points and State Bank of India has been increased by two percentage points.
In the same portfolio, weightage in Macrotech Developers and DLF Limited has been increased while investments in Godrej Properties and Century Textiles have been cut down. Jubilant Foodworks has been removed from the portfolio and replaced by Adani Ports with a 4 percent weighting.
Master franchise for Domino's Pizza operations in India, Jubilant Foodworks, reported a good set of second quarter numbers with net profit up 9.8 percent YoY but analysts remain concerned on margins. Meanwhile, Adani Ports logged record revenue and EBITDA in Q2FY23.
As per Wood’s broader Asia market outlook, he says MSCI China is trading at the lowest level since October 2011 which means that “the worst has likely already been priced in”. This justifies a tactical overweight on China, but not a dramatic overweight, he noted in his report.
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