Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
11,884.50-10.95
Stock Analysis, IPO, Mutual Funds, Bonds & More

Consumer financing boom in India has peaked: Chris Wood

Lender says it would renew the process to sell broking business.

ET Bureau|
Jul 27, 2019, 08.17 AM IST
0Comments
Chris Wood-CLSA-1200
MUMBAI: Christopher Wood, global head of equity strategy at Jefferies, has cautioned that the “consumer financing boom” in India has peaked after private sector lender HDFC Bank reported a slowdown in loan growth in the June quarter

“The results led to 3.3% decline in HDFC Bank’s share price on Monday and should be seen as further confirmation that the consumer financing boom in India in recent years has peaked, for now, in part as a result of the ongoing fallout in the NBFC sector triggered almost a year ago by the default of triple-A rated IL&FS,” said Wood in his weekly newsletter named 'Greed & Fear'.

Loan growth of HDFC Bank slowed to 17.1% at the end of June quarter versus 24.5% at the end of the March quarter.

However, despite the cyclical risks, Wood has retained HDFC Bank in his Asia ex-Japan longonly portfolio, as it is India’s quality private sector consumer lender.

The former chief equity strategist of CLSA has replaced Arvind Fashions with SBI Life Insurance Company in the portfolio, saying that it makes sense to reduce the beta on some other consumer-related exposure.

The Asia ex-Japan thematic equity portfolio for long-only absolute-return investors at Jefferies has a 15% weightage on Indian private sector banks — 5% weightage each for HDFC Bank, ICICI Bank and ICICI Bank.

S
India Play
BI Life Insurance has a 4% weightage, while Bajaj Finance represents the Indian non-banking finance space in the portfolio with a 5% weightage. Housing Development Finance Corporation and Gruh Finance are also part of the portfolio with a 5% weightage each.

Wood is playing the India internet theme in his portfolio with a 5% weightage. Dalmia Bharat and Godrej Properties are also part of this portfolio.

Christopher Wood has a bullish view on Indian markets. In his first media interview after joining Jefferies last month, Wood has told ET that India is one of his top bets within the emerging markets as the country is less exposed to the trade war issues compared to other markets. The strategist also said that the re-election of the coalition led by Prime Minister Narendra Modi is constructive for Indian markets.

Also Read

Chris Wood reduces India overweight on J&K issue

Chris Wood cuts India overweight stance by 100 bps on Kashmir issue

Jefferies appoints Chris Wood as global head of equity strategy

Chris Wood may leave CLSA in latest high-level exit

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service