HDFC Life, SBI Life: Has Chris Wood made a wrong investment call?

Current Affairs
In the course of recent months, Christopher Wood, worldwide head of value system at Jefferies stirred introduction to Indian stocks in his Asia ex-Japan portfolio for long-just supreme return financial specialists. The worldwide speculator purchased SBI Life Insurance and HDFC Life Insurance, which currently represent 5 percent and 4 percent weight in the previously mentioned portfolio.
The ongoing recommendations came out of nowhere for the life coverage organizations when the Budget presented a discretionary system for individual annual duty (I-T), which while bringing down rates, removed most exceptions and reasonings that individual citizens could benefit. This, thusly, could affect offers of protection items. An automatic response saw loads of private life back up plans - HDFC Life, SBI Life, ICICI Prudential Life (I-Pru Life) and Max Financial Services (holding organization of Max Life Insurance) plunge 6–13 percent at the bourses on Saturday. Monday, be that as it may, saw an incomplete recuperation in these counters.
In the present expense system, Unit-connected protection plans (ULIPs) meet all requirements for an exclusion/reasoning up to Rs 150,000. As per reports, a near investigation of the discretionary new and unique annual assessment systems represents that the more seasoned duty system (on benefiting everything being equal) makes a lower charge obligation than the one proposed. An enormous piece of the ULIP deals occurs in the final quarter — frequently connected to individual personal assessment arranging. This part of ULIP request currently goes under a long haul shadow, experts state.

The Indian protection industry is fundamentally investment funds situated and however development in the security business has been solid, its offer altogether new business stays low....READ MORE

Modi win makes India stock market story more exciting than ever: Chris Wood

Economy News

The re-election of Narendra Modi as India’s Prime Minister for the second consecutive term with a thumping majority is a positive and the government should now focus on economic development and reforms to create jobs over the next five years, says Christopher Wood, global head of equity strategy at Jefferies.
“With ten years in power he now has the time to change the country in a fundamental way, which makes the Indian stock market story more exciting than ever. Speaking of the stock market it, naturally, greeted the landslide with initial euphoria which is also good for GREED & fear’s Asia ex-Japan long-only portfolio which continues to have a 49 per cent weighting in India,” Wood wrote in his weekly note to investors, GREED & fear.
Wood still maintains his 'double overweight' rating on India in his Asia Pacific ex-Japan relative-return portfolio despite the sharp rally seen over the past few weeks and plans to add to his position on any decline. That said, he does caution against the expensive valuations, at a time when the earnings are also being downgraded again given the lack of cyclical momentum in the economy.
“The FY20-21E earnings estimates of the Indian office of GREED & fear’s new home are 5 – 6 per cent lower for the Nifty Index since the start of 2019 with valuations at a one-year forward PE of over 18x, compared with a 10-year average of 16x,” he says.

 Indian markets have been one of the best performing in the global context thus far in calendar year 2019 (CY19), with the S&P BSE Sensex rallying nearly 11 per cent. The mid-and small-cap indices, however, have been laggards. While the S&P BSE Mid-cap index slipped around 2.5 per cent during this period, the S&P BSE Small-cap index has gained a modest 2 per cent, data from ACE Equity shows.