India's best equity story on a 10-year view: Chris Wood
Chris Wood said he continues to believe that India is the best equity story in the world on a ten-year view. In his GREED & Fear newsletter, Wood said the Indian market-especially mid-caps-looks expensive but these valuations must be seen in the context of acceleration in growth led by a developing capex cycle.
According to the report, Indian equities outperformed the world in dollar returns in the 11-year period between FY02 and FY12 when the country witnessed a private capex cycle.
«Nearly two decades on and India is now in the early stages of another private-sector capex cycle,» said Wood in the newsletter.
China: Rally Overdue
Wood said there is no doubt that China stocks are overdue for a rally. The MSCI China now trades at 8.8 times estimated earnings as against a 10-year average of 11.3 times.
«For those investors who have conviction on particular bottom-up stories, it makes sense to add here since stocks are clearly cheap,» he said.
The newsletter said despite the biggest cut in the benchmark policy rate since 2019, there was a lack of any euphoric market reaction to this latest easing measure.
«The key reason, so far as GREED & Fear is concerned, is that the central government has still not come up with a policy directly to address the issue of uncompleted residential property projects which is the biggest reason, in GREED & Fear's view, for the ongoing decline in primary property sales which is accelerating the financial squeeze on developers,» said Wood.
«There is no concrete evidence as yet that
