Home finance and realty stocks should do well as the regulation of the real estate sector and likely fall in interest rates going ahead have set the stage for a new property cycle, writes Chris Wood, author of CLSA’s GREED & fear newsletter. “Monetary easing expectations are rising in India with growing speculation about who will replace Raghuram Rajan as the next RBI Governor in September,” says GREED & fear. “For such reasons GREED & fear would advise investors to increase exposure to Indian interest rate sensitive stocks most particularly in the housing finance and residential property sectors
where the passage of a law in March bringing long overdue regulation to that sector has created the backdrop for a new property cycle,” it adds. GREED & fear has added Indiabulls Housing Finance and DLF in its in the long-only Asia ex-Japan portfolio with a 3 percent weightage each. The existing investment in Prestige Estates will be increased by one percentage point. These additions will be at the expense of Reliance Industries , which will be removed from the portfolio.
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