Jefferies Increases India Weighting in Asia Portfolio, Cuts Exposure to China and Indonesia

Global investment bank Jefferies has increased its allocation to India and Taiwan in its Asia Pacific ex-Japan relative-return portfolio, while reducing its exposure to China and Indonesia. The bank took this step in light of changing macroeconomic conditions and relative growth prospects in the region. According to Jefferies’ latest strategy note, the weightings of both India and Taiwan have been increased by one percentage point each, offset by reductions in China and Indonesia.

Under the Asia Pacific ex-Japan asset allocation, the recommended weighting for India has been increased to 17 percent, while Taiwan’s allocation has also been raised. Conversely, China’s weighting has been reduced, and a slight reduction has been made in Indonesia.

Reasons for the Preferred Markets

Jefferies states that this reallocation was made amidst growing uncertainty regarding China’s economic recovery and policy direction, while selective opportunities are emerging in other Asian markets. The report states that India remains a preferred market in the region due to strong domestic demand, infrastructure-led growth, and improving corporate balance sheets.

Taiwan Benefits from Advanced Semiconductors

Regarding Taiwan, Jefferies said that it continues to benefit from global demand for advanced semiconductors. Its crucial role in the global supply chain of the technology sector, strong position in high-end chip manufacturing, and continued capital expenditure by major tech companies are cited as supportive factors for Taiwan.

Changes in International Long-Only Equity Portfolios

In addition to the Asia Pacific ex-Japan portfolio, Jefferies also announced changes to its Global and International Long-Only Equity portfolios. The firm removed Bank Central Asia from both portfolios and replaced it with Samsung Electronics, clearly indicating a shift towards large-cap technology stocks. Jefferies clarified that these changes are part of its regular review process, which includes macroeconomic developments, central bank policy expectations, and stock-specific factors. The bank also stated that further adjustments to portfolio weightings may be made in the future based on global economic trends and market conditions.