CLSA’s chief strategist Chris Wood has removed Indiabulls Ventures and Indiabulls Housing Finance from the Asia ex-Japan long only portfolio while increasing weightage in Bajaj Finance by one percentage point.
Wood had reduced weightage on both Indiabulls Housing and Indiabulls Ventures in his note in mid-November to make way for the investments in private banks — ICICI Bank and IndusInd Bank.
Wood’s Asia ex-Japan long only portfolio also includes Reliance Industries, HDFC Bank, HDFC, Gruh Finance, Dalmia Bharat, Godrej Properties and Arvind besides IndusInd Bank, ICICI Bank and Bajaj Finance.
Meanwhile, Wood said he remains hopeful that a deal over tariffs will be struck between the US and China but it will require US President Donald Trump to part company with the agenda of the national security hawks. President Trump and China’s President Xi Jinping had reached a truce on trade last week on the sidelines of the G-20 meeting.
The 90-day period agreed by both sides to come up with a deal should be sufficient to allow investors to hope for a satisfactory conclusion, said Wood.
“Assuming Trump does not have a national security agenda, which Greed & Fear (title of Wood’s weekly note) does, then there is a need for Trump to take a profit on his nearly two-year long ‘beating up on China’ trade. For if he holds on to the position for too long, the profit risks turning into a loss,” said Wood. “…the imposition of the higher tariffs as threatened would not only be very negative for stock markets but would also be damaging to the American as well as Chinese economies,” said Wood.
Wood said that there is a risk that the US national security hawks may seize the agenda in the negotiations with China and talks break down as a result of their more aggressive stance.
Source: Economic Times