Global brokerage CLSA has reversed its initial strategic shift from exiting Indian stock markets to investing in China. The brokerage firm has decided to increase investment in India while reducing investment in China. CLSA said in one of its reports that after the victory of Donald Trump in the US elections, there may be challenges for the Chinese markets, due to which it has taken this step. If foreign investment in the Indian market starts increasing due to this report, then it is possible that the market may pick up again, but how much will it be? It is still difficult to get an accurate estimate.
Why did you reverse your decision?
The brokerage said that the trade war may increase in Trump’s second term, while at present the share of exports in China’s growth is the highest. In the beginning of October, CLSA had increased its investment in China while reducing its investment in India. The brokerage said that now it is reversing this process, that is, it is going to increase investment in India again.
Expressed confidence in Reliance
Foreign brokerage house CLSA had recently released its report regarding Reliance shares also. It was told in the report that in the coming time, there is a possibility of an increase of up to 70% in the shares of Reliance from the current level. At present Reliance’s stock is trading at around Rs 1266 in the market. However, the stock has declined by 7.70% in the last one month. Nevertheless CLSA believes that this decline is an opportunity for investors. Especially for those investors who want to invest in Reliance from a long term perspective. Let us understand the reason behind this.
What does the report say?
CLSA says that Reliance’s $40 billion new energy business can soon fill the market. The company’s 20 GW solar gigafactory is ready for launch in the next 3-4 months. CLSA has given a valuation of $30 billion for the solar business, which is at a discount to currently listed solar companies. Despite this, according to the report, Reliance’s stock is trading in the five percent range of rainy-day valuation at zero value of new energy business.
