Food delivery platform Zomato has been added to three, long-only portfolios and SBI Life Insurance has been had added to one by Jefferies.
These changes have been made by removing HDFC Life and Standard Chartered, and by reducing investments in JD.com and Alibaba.
In the weekly Greed & Fear newsletter by Christopher Wood, the global head of equities at Jefferies, he wrote about the changes made in the Asia Pacific ex-Japan relative-return portfolio and the long-only portfolios.
“The investments in HDFC Life Insurance and Standard Chartered in the Asia ex-Japan long-only portfolio will be removed and replaced by investments in SBI Life Insurance and India online food delivery platform Zomato,” he wrote, in the newsletter titled “Modi and the champagne socialists”.
The thrust of the newsletter was the improving sentiment around India and what could be the triggers for this.
In the India long-only portfolio, Jefferies will introduce Zomato with a 4 percent weighting, while the investment in HDFC Life Insurance will be removed, the newsletter stated. “The investment in REC Limited will be increased by two percentage points by shaving the investment in Oil & Natural Gas Corp,” it added.
Zomato will also be added to the global long-only equity portfolio, which will be “paid for by shaving the investments in JD.com and Alibaba by two percentage points each”, stated the Greed & Fear newsletter.
Wood wrote that GREED & fear continues to believe that the Sensex will touch 100,000, “a target of fascination to India’s delightfully noisy financial media”.
“This target, on a five-year view, now assumes trend 15 percent EPS growth and that a five-year average one year forward PE multiple of 19.8x is maintained, as discussed here previously (see GREED & fear – India and a 100,000 Sensex, 3 February 2022). Still like all long-term bull markets, the Indian stock market will continue to climb the proverbial wall of worry,” he wrote.
Wood wrote about two risks that he sees in the near term. “One obvious worry over the next 12 months will be the inevitable questioning of the current consensus, namely that (PM Narendra) Modi will be re-elected. Another potential risk is a further reduction in retail investor activity following a period when the stock market has traded in a tight range. Active brokerage accounts have declined from a peak of 38m in June 2022 to 31m in April 2023,” he added.
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