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Mumbai: CLSA’s chief strategist Christopher Wood has maintained a 'double overweight' on India in its Asia Pacific ex-Japan relative-return portfolio, while flagging off oil prices and further strength in the dollar as the biggest risk to its stance. In his weekly newsletter Greed and Fear, Wood said that his base case will be to increase weightage on India at some point in the coming months, assuming Prime Minister Narendra Modi is reelected and growing evidence of the investment cycle. While keeping an eye on the general elections, Hong Kong-based Wood said investors should not attribute too much importance to the outcome of the upcoming state elections which will be fought mainly on local issues. “They should certainly not be viewed as a litmus test on how the BJP will fare in next April-May’s general election,” said Wood. The benefits of landmark reforms such as the Goods and Services Tax (GST) which have been passed during the Modi government's tenure, will become apparent in the months to come, said Wood. "the Narendra Modi Government has implemented major structural reforms in its first term, the benefits of which will become evident in its second fiveyear term assuming that a BJP government is re-elected, albeit most likely with a reduced majority,” said Wood. Wood pointed out that one major failure of the Modi government was not to address the NPL problem in the public sector banks more pro-actively when it took office in May 2014 but added that there has been since then clear evidence of that legacy problem being addressed with the passage of landmark bankruptcy legislation in 2016.
