Latest news with #ChristopherWood
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Business Standard
13 hours ago
- Business
- Business Standard
Valuations, fresh equity supply key risk to Indian stock market: Chris Wood
High valuations, especially in the midcap space, coupled with fresh supply of equity via the initial public offers (IPOs) are the main risks to the Indian stock markets, cautioned Christopher Wood, global head of equity strategy at Jefferies in his recent note to investors, GREED & fear. The rally in the market (since recent lows), Wood cautions, means that valuations have become an issue again, most particularly in the mid-cap space. The Nifty Index now trades at 22.2x 12-month forward earnings after rising by 14.1 per cent from its April 7 low. While the Nifty Mid-Cap 100 Index trades at 27.1x 12-month forward earnings, following a 23.7 per cent gain from its April 7 low. 'This is also why corporates are again placing equity to take advantage of such valuations. The equivalent of $7.2 billion of equity supply was raised last month and $6 billion so far in June. It is this supply which poses the main risk to the market. Equity supply was running at around $7 billion a month prior to the correction, which began in late September last year,' Wood wrote. Mid, smallcaps steal the show From April 7 levels, while the Nifty 50 has rallied nearly 12 per cent till date, the up move in the mid-and smallcap indices has been sharper. The Nifty Midcap 150 index and the Nifty Smallcap 250 indexes have surged nearly 17 per cent and 18.5 per cent respectively during this period, ACE Equity data shows. Meanwhile, primary market activity is set to rebound in the coming week with at least four companies planning to raise a total of about ₹15,000 crore ($1.7 billion) via IPOs, reports suggest. Some prominent ones include Kalpataru, Ellenbarrie Industrial Gases, and Globe Civil Projects. HDB Financial Services Ltd., a unit of India's biggest private lender HDFC Bank, is also planning to launch its $1.4 billion IPO on June 25, reports suggest. This will be one of the biggest IPOs since Hyundai Motor India IPO in October 2024 that raised over Rs 27,000 crore. Capex theme The focus in the Indian market since the budget announcement on February 1, Wood wrote, has rotated to playing consumption rather than investment, helped by the monetary easing context with consumer finance stocks rallying sharply. The property market, now in its 5th year of an upturn, has further to run, he believes. 'Pre-sales growth of the top seven developers covered by Jefferies is forecast to accelerate to 22 per cent YoY in FY26 after slowing to 17 per cent YoY in fiscal year 2024-25 (FY25) ended March 31, a four year low. A lower mortgage rate, now at 8 per cent and expected to fall to 7.5 per cent when the latest Reserve Bank of India (RBI) rate cuts are passed on, should help boost sales in the affordable and mid-income segments,' he said. Portfolio rejig Wood has also rejigged his India portfolio, with the investments in Larsen & Toubro, Thermax and Godrej Properties will be removed and replaced by investments in TVS Motor, Home First Finance and Manappuram Finance, with four percentage points each. An additional one percentage point each will be added to the existing investments in PolicyBazaar and Bharti Airtel, he said. The investment in Larsen & Toubro in the global long-only equity portfolio has been replaced by an investment in Saint-Gobain, a French construction materials company. In the Asia ex-Japan long-only portfolio, too, the investment in Larsen & Toubro will be removed and replaced by an investment in PolicyBazaar, he said.
Economic Times
6 days ago
- Business
- Economic Times
Gold in a healthy consolidation period, says Chris Wood
Gold prices have risen by 85% since the start of 2022 while the MSCI AC World Index is up only 19% over the same period, according to the note. Synopsis Jefferies' Christopher Wood notes gold's consolidation above $3,000. He maintains high gold allocation in his pension fund. Western gold ETF flows are light despite gold's outperformance since 2022. Total ETF holdings are below 2020 peak. Gold prices have significantly outpaced the MSCI AC World Index since 2022. China's gold imports surged in April. Mumbai: Jefferies' global equity strategist Christopher Wood said gold has entered a 'healthy consolidation' period with prices holding above US$3,000 an ounce-a level he described as ideal for gold mining companies to enjoy rising profit margins. In his newsletter, Greed & Fear, Wood said he maintains a 40% allocation to physical gold and 20% to gold mining stocks in his asset allocation for a US dollar-denominated pension fund. ADVERTISEMENT "Normally, when a certain category of stocks outperform, there are strong flows into the related ETFs. But that has not been the case with gold in recent years," he said. "Flows into gold ETFs in the western world have remained relatively light given the dramatic outperformance of gold since the start of 2022." Total known ETF holdings of gold are up 10% from their May 2024 low but remain 20.3% below the October 2020 peak. Gold prices have risen by 85% since the start of 2022 while the MSCI AC World Index is up only 19% over the same period, according to the said China has increased its gold purchases with imports rising 73% in April from the previous month to 127.5 tonnes, the highest level in 11 months. This volume is equivalent to nearly half of the average monthly global gold production outside China, he said."Holdings in China-listed gold ETFs have increased by 82 tonnes so far this year, compared to an increase of 53.3 tonnes in all of 2024," the note said. (You can now subscribe to our ETMarkets WhatsApp channel) Nikita Papers IPO opens on May 27, price band set at Rs 95-104 per share Nikita Papers IPO opens on May 27, price band set at Rs 95-104 per share Why gold prices could surpass $4,000: JP Morgan's bullish outlook explained Why gold prices could surpass $4,000: JP Morgan's bullish outlook explained Cyient shares fall over 9% after Q4 profit declines, core business underperforms Cyient shares fall over 9% after Q4 profit declines, core business underperforms L&T Technology Services shares slide 7% after Q4 profit dips L&T Technology Services shares slide 7% after Q4 profit dips Trump-Powell standoff puts U.S. Rate policy in crosshairs: Who will blink first? Trump-Powell standoff puts U.S. Rate policy in crosshairs: Who will blink first? SEBI warns of securities market frauds via YouTube, Facebook, X and more SEBI warns of securities market frauds via YouTube, Facebook, X and more API Trading for All: Pi42 CTO Satish Mishra on How Pi42 is Empowering Retail Traders API Trading for All: Pi42 CTO Satish Mishra on How Pi42 is Empowering Retail Traders Security, transparency, and innovation: What sets Pi42 apart in crypto trading Security, transparency, and innovation: What sets Pi42 apart in crypto trading Bitcoin, Ethereum, or Altcoins? How investors are structuring their crypto portfolios, Avinash Shekhar explains Bitcoin, Ethereum, or Altcoins? How investors are structuring their crypto portfolios, Avinash Shekhar explains The rise of Crypto Futures in India: Leverage, tax efficiency, and market maturity, Avinash Shekhar of Pi42 explains NEXT STORY
Time of India
6 days ago
- Business
- Time of India
Gold in a healthy consolidation period, says Chris Wood
Gold prices have risen by 85% since the start of 2022 while the MSCI AC World Index is up only 19% over the same period, according to the note. Jefferies' Christopher Wood notes gold's consolidation above $3,000. He maintains high gold allocation in his pension fund. Western gold ETF flows are light despite gold's outperformance since 2022. Total ETF holdings are below 2020 peak. Gold prices have significantly outpaced the MSCI AC World Index since 2022. China's gold imports surged in April. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Mumbai: Jefferies' global equity strategist Christopher Wood said gold has entered a 'healthy consolidation' period with prices holding above US$3,000 an ounce-a level he described as ideal for gold mining companies to enjoy rising profit margins. In his newsletter, Greed & Fear, Wood said he maintains a 40% allocation to physical gold and 20% to gold mining stocks in his asset allocation for a US dollar-denominated pension fund."Normally, when a certain category of stocks outperform, there are strong flows into the related ETFs. But that has not been the case with gold in recent years," he said. "Flows into gold ETFs in the western world have remained relatively light given the dramatic outperformance of gold since the start of 2022."Total known ETF holdings of gold are up 10% from their May 2024 low but remain 20.3% below the October 2020 peak. Gold prices have risen by 85% since the start of 2022 while the MSCI AC World Index is up only 19% over the same period, according to the said China has increased its gold purchases with imports rising 73% in April from the previous month to 127.5 tonnes, the highest level in 11 months. This volume is equivalent to nearly half of the average monthly global gold production outside China, he said."Holdings in China-listed gold ETFs have increased by 82 tonnes so far this year, compared to an increase of 53.3 tonnes in all of 2024," the note said.
Yahoo
29-05-2025
- Business
- Yahoo
Bitcoin ETFs Pull In $9 Billion as Investors Ditch Gold Holdings
(Bloomberg) -- A divergence is emerging in US exchange-traded funds as investors move from gold to its so-called digital counterpart, Bitcoin. NYC Congestion Toll Brings In $216 Million in First Four Months NY Wins Order Against US Funding Freeze in Congestion Fight NY Congestion Pricing Is Likely to Stay Until Year End During Court Case Over the past five weeks, US Bitcoin ETFs have attracted more than $9 billion in inflows, led by BlackRock Inc.'s iShares Bitcoin Trust ETF (IBIT). Meanwhile, gold-backed funds have suffered outflows exceeding $2.8 billion over the same period, according to data compiled by Bloomberg News. While easing trade tensions has cut into demand for traditional havens like gold of late, Bitcoin's perceived status as an alternative store of value is growing — just as concerns over US fiscal stability mount. Bitcoin touched a record high of $111,980 earlier this month, buoyed by favorable regulatory signals — including progress on a stablecoin bill — and rising macroeconomic uncertainty. Gold, while still up more than 25% so far this year, has pulled back from recent peaks, trading roughly $190 below its all-time high. Analysts say the rotation suggests a growing acceptance of Bitcoin as a legitimate portfolio hedge. 'I remain bullish on both gold and Bitcoin,' said Christopher Wood, global equity strategist at Jefferies. 'They remain the best hedges on currency debasement in the G7 world.' Skeptics, though, have warned that Bitcoin's volatility still undermines its status as a true haven. During past macro shocks, like the August unwinding of the yen-funded carry trade, Bitcoin fell sharply along with other risk assets. Others see Bitcoin gaining an edge. 'Bitcoin is more effective against financial system risks due to its decentralised nature,' Geoff Kendrick, global head of digital assets research at Standard Chartered, wrote in a recent note. He contrasted that with gold's stronger performance during geopolitical flare-ups like tariff escalations. Kendrick added that Bitcoin serves as a hedge through two routes: risks tied to the private sector — such as the collapse of Silicon Valley Bank in 2023 — and those tied to government institutions, including concerns over US Treasury stability. 'The recent threat to Fed independence (via Powell's potential replacement) falls squarely into the second category, along with the tariff escalation and broader concerns about US policy credibility,' he said. Adding to its appeal, Bitcoin appears to be shedding its reputation as a tech-adjacent risk asset. 'Over the past month, Bitcoin's intraday correlation with Nasdaq, the dollar, and even gold, has been remarkably low,' said Dilin Wu, research strategist at Pepperstone. 'These shifts suggest Bitcoin may increasingly be viewed as a hedge — or even a non-correlated asset class — rather than just a speculative trade.' The backdrop of fiscal strain is intensifying the debate. Moody's Ratings recently stripped the US of its last triple-A credit grade, citing ballooning deficits and debt. That downgrade brought it in line with Fitch Ratings and S&P Global Ratings, both of which already rate the US below the top tier. Still, gold remains the better performer year-to-date, with gains of about 25%, compared with Bitcoin's 15% rise. Mark Zuckerberg Loves MAGA Now. Will MAGA Ever Love Him Back? YouTube Is Swallowing TV Whole, and It's Coming for the Sitcom Millions of Americans Are Obsessed With This Japanese Barbecue Sauce Inside the First Stargate AI Data Center How Coach Handbags Became a Gen Z Status Symbol ©2025 Bloomberg L.P.
Mint
23-05-2025
- Business
- Mint
Greed & Fear: Jefferies' Chris Wood predicts end of US market dominance, bets on Asia, defence stocks
Global equity landscape is undergoing a paradigm shift, with Jefferies' Christopher Wood anticipating a long-term decline in US market dominance, weakening of the dollar, and a reallocation toward Asian assets and defence plays. In his latest GREED & fear report titled "The End of an Era", Christopher Wood, Global Head of Equity Strategy at Jefferies, declared that the American equity market has likely passed its peak influence. He pointed to the technical breakout of the MSCI All Country World ex-US Index—unchanged since 2007—as strong evidence of this shift. As of December 2024, US stocks accounted for 67.2 percent of the global index, despite representing just 26.4 percent of global GDP in nominal terms and 14.9 percent on a purchasing power parity basis. Wood argued this disparity suggests a structural overvaluation of US equities and foretells a longer-term weakening of the US dollar. He said, 'This is technical confirmation of GREED & fear's continuing base case,' suggesting that the global market cycle is now favouring non-US assets. According to Wood, the dollar's decline is inevitable due to several catalysts. One is political: former President Donald Trump's preference for a weaker dollar and his unpredictability regarding economic policy, particularly tariffs. Another is structural: the unsustainable fiscal path taken by the US government post-Covid. The resulting pressure could lead to financial repression and yield curve control—both of which are bearish for the greenback. He noted, 'The most important reason to assume a long-term weakening of the US dollar is America's extreme fiscal deterioration,' which could result in capital restrictions and currency controls. In stark contrast to the US dollar, Wood projected long-term appreciation for Asian currencies. This, he argued, would be a reversal of the post-Asian Crisis currency devaluation that persisted for three decades. He pointed to the region's strong savings rate, with emerging Asia recording 39 percent of GDP in gross national savings in 2024 compared to just 17.3 percent in the US, as per IMF data. He cited Trump's mercantilist policy stance and the region's financial prudence as core reasons for sustained currency strength across Asia. Wood's bullish stance extended to European equities—particularly defence and banking stocks. With Germany planning to increase its defence spending to 5 percent of GDP, Wood emphasized this as evidence that Europe is 'waking up' to its geopolitical responsibilities. He reaffirmed a long-standing pair trade: long European defence stocks and short American ones. The MSCI Eurozone Aerospace & Defense Index has outperformed its US counterpart by 31 percent since December 2024. GREED & fear continues to advocate holding European banks, citing improved loan growth in countries like Greece and Spain, where credit expansion has resumed after a prolonged downturn. While celebrating the market's recent rebound, Wood warned about the underlying fragility in private equity and credit markets. He noted that the S&P Listed Private Equity Index dropped 27.1 percent during a risk-off period and flagged systemic risks due to the growing bank exposure to non-bank financial institutions (NBFIs). Loans to NBFIs hit USD 1.2 trillion in March 2025—a 20 percent year-on-year jump. He warned that 'private equity and private credit will be the big losers in any US downturn,' with top institutions like Harvard and Yale already attempting to offload billions in PE exposure. Regulatory concerns are also mounting, as the IMF noted over 40 percent of private credit borrowers had negative free cash flow at the end of 2024. Wood also raised concerns about the ongoing AI-driven capex boom in Big Tech. Despite massive spending, he questioned the long-term viability of these investments, calling them potentially a 'misallocation of capital.' He cited decentralized AI alternatives such as Tether's upcoming QVAC platform as potential threats to the current tech hegemony, which he described as "surveillance capitalism." Still, GREED & fear is keeping a hedged position by maintaining a 4 percent allocation in Nvidia, down from 7 percent at the end of 2023. On geopolitical risks, Wood critiqued the Western media's emphasis on ceasefires in Ukraine. He reiterated that Russia remains firm on four conditions for peace: Ukraine's neutrality, cessation of Western arms shipments, recognition of Russian territorial control, and full troop withdrawal by Ukraine. He suggested the US, particularly Trump, holds more leverage over the conflict by controlling funding, rather than military support. Wood's comprehensive outlook is clear: investors should brace for a rebalancing of global equity power away from the US. With American fiscal stability in question, Big Tech potentially overextended, and geopolitical risks on the rise, he advocated a rotation toward Asian currencies, European defence, and select global value plays. His global portfolio reflects this thesis with top holdings in names like Capricorn Metals (Australia), BYD and Tencent (China), Zomato and ICICI Bank (India), TSMC (Taiwan), Petrobras (Brazil), Societe Generale (France), and Freeport-McMoRan (US). His only US tech holding remains Nvidia—a strategic hedge in the unfolding AI arms race. Wood's thesis in GREED & fear: The End of an Era is a clarion call for investors to adapt to the shifting tides of global finance. As the US's market dominance wanes, the next chapter of investment leadership may be written from Asia and Europe. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
