From an Indian equity standpoint, monetary easing in the context of a stable currency is an obvious positive, writes CLSA's Chris Wood in his newsletter GREED & fear
The RBI’s decision in the credit policy to cut the repo rate by 25 basis points and lower the target for real interest rate suggests that suggests significantly easier monetary policy is coming, according to Chris Wood, author of CLSA’s newsletter GREED & fear.
“This is not irresponsible since credit growth has been running almost in line with nominal GDP growth for five years,” Wood writes, adding he sees “more rate cuts next year”.
India's retail inflation in September fell to a 13-month low of 4.31 percent, mainly on the back of a sharp fall in food prices. (Read more)
Wood is bullish on home finance companies and real estate players.
“From an Indian equity standpoint, monetary easing in the context of a stable currency is an obvious positive,” says Wood in the newsletter.
“This is why the focus in terms of stocks should remain on housing finance companies and other wholesale finance-funded lenders, as well as for the more adventurous real estate stocks.The Great Diwali Discount!
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First Published on Oct 14, 2016 08:51 am