In today’s briefing:
- Value Funds Move to Record Underweight in India
- UK: Inflation Trend Is Not a Friend
Value Funds Move to Record Underweight in India
- India moves to largest underweight country holding among EM Value managers. Current underweight the highest on record.
- Among Value managers, India saw net fund outflows of $322m, the underweight increase by -1.92% and a further 7.7% of managers move to underweight over the last 6-months.
- Reliance Industries (RIL IN) is the key underweight, whilst Bajaj Finance Ltd (BAF IN)Bharti Airtel (BHARTI IN) and Larsen & Toubro have been avoided by EM Value managers altogether.
UK: Inflation Trend Is Not a Friend
- Another month of substantial upside inflation pressure creates broad-based income destruction. What started as base effects and built with narrow shocks (inc-energy) has increasingly become an awkward trend phenomenon.
- That painful trend could continue causing upside inflation surprises until the brisk nominal expansion burns itself out. Second-round effects of inflation in wages are needed to extend it.
- The BoE is likely to do its bit by hiking again on 3 February.
Before it’s here, it’s on Smartkarma
