Chris Wood has increased weightage on Indian equities by two percentage points to 14%. This will be paid for by cutting weightage on China by 0.5 percentage point and Malaysia by 1.5 percentage point.
He has also raised exposure to South Korea by one percentage points and reduced exposure in Indonesia and Pakistan by 0.5 percentage points each.
Wood said one positive is that it looks like the cases in Mumbai have peaked and the other point is there is rising hope of herd immunity.
On vaccine rollout, Wood said India is currently producing at full capacity and administering whatever it has produced, with vaccinations running at 2.5 million daily.
“The hope is that this will rise to 5m by July since India has now ordered extra supplies from abroad while there is a de facto ban on exports of vaccines produced locally,” said Wood.
He said the renewed restrictions on activity could also raise again the potential risk of a renewed deterioration in asset quality for the banking sector.
He said any marked pullback in India’s quality private sector banks is a buying opportunity for those who missed the explosive rally in banks from the lows reached in March 2020.
