Jefferies’ Chris Wood has recently made strategic updates to his Long-Only portfolios, reflecting a keen eye on market opportunities and emerging sectors. Notably, the inclusion of MakeMyTrip Ltd., a prominent online travel platform, signals a bullish outlook on the revival of India’s travel industry as both domestic and international travel demand sees a resurgence. This new investment carries a 4% allocation within the Greed & Fear portfolio, funded by divesting from Axis Bank Ltd.

Key Portfolio Adjustments

In addition to the travel sector, Wood is also refining his strategy in Indian real estate. The decision to remove Godrej Properties Ltd. from the Asia ex-Japan long-only portfolio has allowed for an increased stake in Macrotech Developers Ltd., boosting its position to 4%. Furthermore, DLF Ltd., a leading player in the Indian property market, will make its debut in the portfolio with a 3% allocation.

• Current Holdings in Asia ex-Japan Portfolio:
  • SBI Life Insurance Co.
  • ICICI Bank Ltd.
  • JSW Energy Ltd.
  • Larsen & Toubro Ltd.
  • GMR Airports Infrastructure Ltd.

Growing Tech Sector Investments

A similar adjustment has been made in the global long-only equity portfolio, where Macrotech Developers takes the place of Godrej Properties. Additionally, the investment in Zomato Ltd., India’s leading online food delivery service, is set to increase by 1%. This shift will be funded by reducing exposure to Taiwan Semiconductor Manufacturing Company, aligning with the broader trend of digital engagement in India’s tech and e-commerce landscape.

Focus on Key Players

In the Indian long-only portfolio, Wood is boosting his investment in Reliance Industries Ltd. by 2 percentage points. To accommodate this increase, allocations to HDFC Bank Ltd. and State Bank of India will each see a 1% reduction.

Optimistic Outlook for Indian Equities

Jefferies is optimistic about the Indian equity market’s near-term prospects. The brokerage anticipates a rebound fueled by favorable economic indicators and a preference for sectors such as banks, non-banking financial companies (NBFCs), metals, automobiles, real estate, and power. Conversely, the firm remains cautious on the technology and pharmaceutical sectors.

Key factors contributing to this positive sentiment include:

• Nifty valuations nearing historical averages
• Increased government spending stimulating economic growth
• Regulatory support from the Reserve Bank of India (RBI)
• Positive news flow regarding reforms

With robust domestic investment flows and the potential for reduced foreign portfolio investor (FPI) selling, Jefferies envisions promising returns for investors in the near future.

Conclusion

As Jefferies adapts its investment strategies, the focus remains on dynamic sectors that are likely to thrive amidst changing consumer behaviors and economic recovery. This approach positions the firm to capitalize on the evolving landscape of the Indian market, ensuring a balanced and forward-looking portfolio. For more insights, explore Goldman Sachs’ Top Picks and the latest market trends.