HDFC Life, SBI Life: Has Chris Wood made a wrong investment call?

The recent Budget 2020 proposals came like a bolt from the blue for the life insurance firms. A knee-jerk reaction saw stocks of private life insurers plunge 6-13 per cent at the bourses on Saturday.

Over the past few months, Christopher Wood, global head of equity strategy at Jefferies churned exposure to Indian stocks in his Asia ex-Japan portfolio for long-only absolute-return investors. The global investor bought SBI Life Insurance and HDFC Life Insurance, which now account for 5 per cent and 4 per cent weight in the above-mentioned portfolio.

The recent proposals came like a bolt from the blue for the life insurance companies when the Budget introduced an optional regime for personal income tax (I-T), which while lowering rates, took away most exemptions and deductions that individual taxpayers could avail. This, in turn,