Christopher Wood says India is his favourite among all emerging markets

Chris Wood of Jefferies

Christopher Wood, the Global Head of Equity Strategy at Jefferies, an investment bank, reiterated that India was the ultimate choice for investors in a recent interview with Bloomberg Television.

Despite the array of challenges, Wood was confident that India has the potential to emerge as the standout performer among emerging markets in the coming decade. "The market I want to be in Asia for the next 10 years is India," he proclaimed.

Foreign capital

A striking feature of India's investment landscape, according to Wood, is the substantial inflow of foreign capital. "There's a lot of foreign money coming into the country," he said. The surge of foreign investment underscores India's appeal on the global stage, he explained.

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In spite of India's challenges, like inflation and rising oil prices, Wood's faith in the country remains steadfast. "It remains my favorite among all the emerging markets, " he said.

China's property sector: Opportunities amidst challenges

Chris Woods also shed light on China's property sector during his interview conversation, explaining that he has included select developers in his portfolio due to their impressive ability to seize market share from private developers. Estimates suggest that these developers could potentially capture up to 60 percent of the market by year-end. Despite concerns about China's economic growth plateauing, there are opportunities emerging from this consolidation according to the strategist.

Private sector developers in China have faced mounting pressures, aggravated by their high leverage and subsequent deleveraging triggered by policies like the "three red lines." The COVID-19 pandemic further compounded their woes. However, amidst these challenges, astute developers are positioned to thrive, capitalizing on market share gains.

Digital transformation, infra investment to boost Indian economy

In a recent newsletter, Wood had expressed confidence that the Sensex will eventually reach the 1,00,000 level in the next five years, if an average one-year forward PE multiple of 19.8 is maintained alongside 15 percent EPS growth. He had said that India's domestic growth potential and the strength of its consumption sector makes it an attractive opportunity.

Also Read: ABB India shares gain as Jefferies sees 16% upside potential

Wood also praised India's digitization efforts in his newsletter, especially platforms like Paytm, acknowledging their significant impact on the country's economic landscape. Wood said that even during the pandemic, India had shown impressive resilience, instilling confidence in its ability to handle future economic challenges better than its peers.

Furthermore, Wood highlighted India's commitment to infrastructure development as a catalyst for economic growth and foreign capital infusion. He also acknowledged the Indian government's initiatives to facilitate foreign investment, particularly through privatization.

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