Christopher Wood has some tips for foreign investors who missed the opportunity to invest in India when markets fell before an unprecedented rebound last year – now is a good time to buy Indian stocks again.

Amid the uncertainty surrounding the effectiveness of vaccines against newer variants of Covid-19 and practical issues regarding large-scale inoculation in emerging markets, Wood, global head of equities at Jefferies, said the India was better placed to do this efficiently since it manufactures the vaccines. “Therefore, this would be a good time to invest because once India rallies, it will recover quickly.

Wood increased India’s “overweight” level on the Asia-Pacific (ex-Japan) relative return portfolio by 2 percentage points to 14%, returning to where it was at the end of the last quarter according to his latest Greed & Fear report. He cited factors including the likely spike in Mumbai cases, herd immunity hopes and the upcoming vaccine rollout to be optimistic India is handling the crisis from a six-month investment perspective. .

He also cited the failure to implement a national lockdown, which he said would be counterproductive.

The Reserve Bank of India, said Wood in BloombergQuint’s Navigating Through Uncertainty special, has taken steps in the right direction. But he would like to see the central bank look at core inflation and not just headline inflation.

He finds Indian government bonds “relatively attractive on a relative basis” and expects inclusion in global indices to open up more capital flows for India. “I have a 20% weighting in Indian 15-year government bonds.”

Key themes

The market veteran sees private banking and insurance as key sectors with long-term growth potential in India.

Wood said India’s real estate industry has seen massive consolidation due to the Real Estate Regulation Act and the Goods and Services Tax, unlike any other economy in his life. Developers who survived this have a long-term opportunity, he said. Investing in this sector, however, has a “slightly high beta”.

Watch the full interview here-