Chris Wood Adds Airtel To India Portfolio, Cuts RIL, HDFC Bank Weights
While investment in RIL will be lowered by 3 percentage points, HDFC Bank's weight will be reduced by 2 points in Jefferies India long-only portfolio.
Bharti Airtel Ltd. has been added to the India long-only portfolio and the global long-only portfolio of Chris Wood, the global head of equity strategy at Jefferies Financial Group Inc.
An investment in Airtel will be introduced in the India long-only portfolio with a 3% weightage, according to the Greed & Fear note dated Feb. 8 This will be paid for by shaving the investment in Reliance Industries Ltd. by three percentage points, he wrote in the note.
The investment in HDFC Bank Ltd. will also be reduced by two percentage points, while the investments in Axis Bank Ltd. and State Bank of India will be increased by a percentage point each, the note said.
In the global long-only portfolio, HDFC Bank investment will be reduced by two percentage points, Axis Bank's weight will be raised by one percentage point each, it said.
Greed & Fear highlighted that the interim budget was almost devoid of "vote-buying populism", saying it is testament to the confidence of Prime Minister Narendra Modi ahead of the Lok Sabha election.
The fiscal deficit is projected to decline from 5.8% of the gross domestic product in the current financial year to 5.1% in the next fiscal, compared with market expectations of 5.3%.
The budget prompted Mahesh Nandurkar, the head of India research at Jefferies, to increase the investment in Larsen & Toubro Ltd. in his portfolio, according to the note.
L&T already has a 6% weight in Jefferies' India long-only portfolio and a 5% position in the Asia ex-Japan long-only portfolio.
It has been a feature of the Modi government that the fiscal deficits have been used mainly to finance infrastructure investments rather than transfer payments, it said.
On disinvestment, the government has signalled that the focus will be on "value creation" in public sector companies, it said. "In our view, this is a reason for investors to pay more attention to a cheaper part of the Indian market, namely SOEs (state-owned enterprises)," it said.
