Jefferies Financial reduces overweight stance on India and Indonesia

The overweight stance towards India and Indonesia came down drastically at Jefferies Financial Group over the past year.

Currently, the brokerage recommends 9.5 per cent weighting to India, 198 basis points higher than its weighting in the MSCI Asia Pacific ex-Japan index, where the country’s weighting is 7.8 per cent. In August last year, Jefferies was 680-point overweight (OW) on India, with a weighting of 15 per cent.

Indonesia is another market, which has seen a sharp reduction in asset allocation. Its weighting has declined from 9 per cent last year to 3 per cent at present in Jefferies’ model portfolio for the Asia-Pac region. Christopher Wood, global head of equity strategy at Jefferies, had in the past criticised the strict lockdown implemented in India, terming it “disastrous for the economy.”

Interestingly, Jefferies now has a bigger OW on Pakistan. However, India’s absolute weighting is still much higher. China currently is the biggest OW for Jefferies, followed by Taiwan.

Both countries have seen their OW stance go up by 700 bps in the past one year. Meanwhile, Australia and Thailand remain the biggest underweight markets.