InterGlobe Aviation will command a 4% weightage in the India long-only portfolio and this will be funded by removing the investment in state-run Coal India Ltd. and cutting the investment in industrial player Thermax, by one percentage point.
In his note GREED & fear on Friday, February 28, Wood mentioned that he will also be making a change in his global long-only portfolio where he will increase the investment in Alibaba by one percentage point, which will be done by trimming the investment in ICICI Bank by a similar quantum.
The fund manager wrote in his note that the sell-off seen in the Indian markets is primarily technical in nature, reflecting multiple compression rather than drastic macro issues.
The Nifty is down 14% from its peak, while the Midcap index is down 19% from its peak. A major driver of the sell-off has been the aggressive foreign selling.
In stock terms, the sell-off has been concentrated in the more high beta domestic cyclical sectors like real estate, infra and industrials, which were the big outperformers last year. “That is why, GREED & fear’s India portfolio, which is heavily positioned in these sectors, outperformed the Nifty by 18.7% in US Dollar terms on a total-return basis till December 17, but has underperformed by 12.1% since then,” Wood wrote in his note.
Wood also wrote that any renewed easing by the US Federal Reserve will be a relief to all emerging market asset class which would like to see a weak US Dollar, as would Donald Trump. One such emerging market would be India.
The Nifty is currently heading into the March series on the back of five straight months of losses.
Shares of InterGlobe Aviation ended 0.3% higher on Thursday at ₹4,442.3. The stock is down 12% from its peak of ₹5,035.
