1 min read.Updated: 01 Jun 2015, 03:52 PM ISTAmi Shah
Christopher Wood, MD of CLSA, said that Grasim Industries Ltd and Power Finance Corp. Ltd will be replaced in his Asia ex-Japan long-only portfolio
Mumbai: CLSA, a leading Asian equity brokerage and investment group, has made adjustments to its holdings of Indian stocks, even as it remains largely bullish on the broader markets.
Writing in his closely tracked newsletter GREED & Fear, Christopher Wood, managing director of CLSA, said that Grasim Industries Ltd and Power Finance Corp. Ltd will be replaced in his Asia ex-Japan long-only portfolio. Instead Coal India Ltd and Bajaj Finance Ltd are being added to the portfolio.
In the year-to-date period, shares of Grasim Industries are up 14.5%, while Power Finance Corp shares are down 7.6%. Coal India shares have gained 5.8% and Bajaj Finance is up 115.93% since the start of the year. The benchmark BSE Sensex is up 1.3% for the same period.
Wood also said the existing weighting in Maruti Suzuki India Ltd will also be increased by one percentage point.
CLSA did not explain the rationale behind the change in the portfolio holdings.
Other Indian companies that are a part of this portfolio are HDFC Bank Ltd, IndusInd Bank Ltd, ICICI Bank Ltd, Housing Finance Development Corp. Ltd and Gruh Finance Ltd among banking and financials firms. Zee Entertainment Ltd, Prestige Estates and Persistent Systems Ltd are also part of the portfolio.
In a note released on 28 May, CLSA reiterated that it remains structurally bullish on India, a view that is reflected in the overweight position of Indian investments in the Asia Pacific ex-Japan relative-return portfolio.
Commenting on the Reserve Bank of India (RBI’s) monetary policy review due on Tuesday, Wood said that the consensus expectation is for a 25 basis point cut.
“GREED & fear would be amazed if there was not a 25bp rate cut. Indeed a 50bp cut would be wholly appropriate given the level of real interest rates," said Wood in the latest newsletter, arguing that real rates in India are high.
“... the real RBI policy repo rate, deflated by CPI inflation and WPI inflation, is now 2.5% and 10.4%, respectively," he said.
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