Tag: Mark Mobius

Mark Mobius reveals how markets will react if NDA wins 400+ Lok Sabha seats

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Ace investor Mark Mobius said on Wednesday, May 15, Indian markets will do well and move up if the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) gets more than 400 seats and it will be good for the economy.

“It will be good news for the market. More importantly, it will be good for the economy,” Mobius told CNBC-TV18, while discussing why there has been a volatility in the Indian markets and the reason for heavy selling by foreign institutional investors (FIIs).

So far in May, FIIs have sold shares worth ₹33,540 crore, according to data available on Moneycontrol. Since April when the election process began, FIIs have offloaded $6 billon.

Mark Mobius attributed this to the prevailing uncertainty arising from the election.

“It’s probably because of the uncertainty arising from the election. Investors, not only foreign investors, but investors anywhere in the world, including Indian investors tend to hate uncertainty. They don’t want it to be uncertain.”

Mobius emphasised that a strong NDA mandate will help the government pursue ambitious policy objectives aimed at fostering growth and accelerating technology adoption across sectors.

The ace investor highlighted the importance of the government’s role in creating an environment conducive to attracting foreign investors.

“There is an incredible opportunity for India to become the centre for technical innovation and technical manufacturing. And that will depend on the degree to which the Indian government is able to attract these large manufacturers, from China, Taiwan US, Japan, etc. And that, of course, depends on the degree of bureaucracy and restrictions that the Indian government imposes. And my reading is that the Modi government will probably try to make it more attractive and loosen up these restrictions, which will attract more foreign investors.”

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Mark Mobius sees immense potential for India in tech innovation and manufacturing

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Veteran emerging market investor Mark Mobius believes a key driver of India’s growth will be its ability to attract foreign investments in technology sectors such as semiconductors and software.

“There is an incredible opportunity for India to become the centre for technical innovation and technical manufacturing. And that will depend on the degree to which the Indian government is able to attract these large manufacturers, from China from Taiwan from US, Japan, etc.,” Mobius said in an exclusive interaction with CNBC-TV18.

Mobius also discussed his market philosophy and what investors must keep in mind to make sound investment decisions.

This is the verbatim transcript of the interview.

Q. He had a humble background but through wise investments, patience, and frugality, managed to earn a fortune over a 20 to 30 year period. So what does this really mean? And what’s the lesson in all of this for people getting into the stock market right now.

A. A lot of people think that I’ve got to have a college degree, or go to a university, or finish high school. All these things are not necessary if you are willing to learn, the books are available in the library, you can go to any library, and now with the internet, it opens the whole world of education to anyone who’s willing to buy a cell phone or a small computer.

So the education aspect is something that’s very critical. And you must not think that it necessarily means a degree is just a piece of paper. It’s what you have in your brain, what you’ve learned, and what you’ve practiced. I would say 50% to 60% of the people who have degrees normally don’t go into the field in which they were educated; they go into something different. They could have done that without having the degree. So this is very important. Don’t forget about the degrees and the paperwork. Think about what you’re actually learning, and how you’re applying that learning to your life.

Q. You’ve also spoken and quoted someone to say that it’s your attitude, not your aptitude, which decides your altitude. Is that very important in the current context?

A. Exactly. You see many people around the world have a great formal education, have a great aptitude for a certain field, but they don’t use it or apply it. Therefore, they’re not going to be successful. They don’t have the right attitude. In other words, they don’t have the attitude to be successful, to learn more, to keep an open mind, and to progress. So that’s why I say attitude is more important than aptitude.

Q. Speaking about the emotion potion, you want investors to avoid the emotion potion in the markets, avoid a herd mentality, stay calm, be knowledgeable, study the markets, well study the stock well, and then decide your call. What would be your advice and context in the current environment in India and globally?

A. In the book, I mentioned that emotion is the potion. In other words, the markets are driven more by emotion than by intellect or by rationality. In fact, that’s the case of our lives. If you look at your normal daily life, you find that so much of it is driven by emotion. When it comes to investing, you’ve got to be much more rational. You’ve got to observe emotion, understand emotion, understand the crowd behaviour and use that understanding to invest but don’t get involved yourself in the emotion of the market. And I remember John Templeton saying the best way to invest is to buy when others are selling and sell when others are aggressively buying. So this is the kind of thing that you got to recognise when you’re looking at the market.

Q. Mark, coming back to the India scenario. There are of course a lot of things which affect the sentiment in the markets and currently, there is a certain degree of volatility, a decline in the Sensex and Nifty that we’ve seen because of it Indian elections that is what several experts suggest. Do you think this volatility is indeed during due to elections? Or are there other factors at play? How should investors see this?

A. There’s no question the elections are having an impact. Because people do look at the elections very carefully. Everyone is involved emotionally, in one degree or another, and they tend to react emotionally in the market itself. So now there’s an opportunity. Because if you can look at the emotion in the market, and recognise that perhaps the emotion, the direction of the market driven by emotion, is wrong, then you should do the opposite thing. In other words, if everyone’s selling, maybe you should be buying, and vice versa, of course, based on the actual fundamentals of the companies in which you are investing. So, yes, I would say that probably the Indian elections are having a big impact on the emotion of the market.

Q. We’ve seen at least 47,000 crore offloaded by foreign institutional investors since the time the elections began in India in April. Approximately $6 billion have been offloaded. What according to you would be the reasons for this?

A. It’s probably because the uncertainty arising from the election. A lot of investors, not only foreign investors, but investors anywhere in the world, including Indian investors tend to hate uncertainty. They don’t want it to be uncertain. And of course, as you mentioned, the outcome of the election is uncertain. You know, some people say that Modi will get a supermajority and that he’ll be able to get more seats in Congress. Other people will say, No, he may not. And that creates uncertainty. So whenever there’s uncertainty builds that okay, I’m out of here. I’m gonna wait until I find out what’s really going to happen. And then I’ll invest. So uncertainty is a big driver to this. And that’s probably what’s happening with foreign investors.

Q. Let me ask you about two to three scenarios. One is, if the prime minister the BJP, the NDA, they crossed the 400 seats mark, as they have been suggesting and claiming that they will win big they will win with record numbers, if they manage to do that, how do you see the markets reacting and what will be the growth momentum and investment momentum and attitude towards India?

A I think if they do that, the market will probably move up barring any other factor coming in, but I would say it will be good news for the market. More importantly, it will be good for the economy. Because then the policy objectives of growth and the adoption of technology will be very important. One of the key aspects now for India will be its ability to attract foreign technological investments, semiconductors, software, etc. There is an incredible opportunity for India to become the centre for technical innovation and technical manufacturing. And that will depend on the degree to which the Indian government is able to attract these large manufacturers, from China from Taiwan from US, Japan, etc. And that, of course, depends on the degree of bureaucracy and restrictions that the Indian government imposes. And my reading is that the Modi government will probably try to make it more attractive and loosen up these restrictions, which will attract more foreign investors.

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Mark Mobius reiterates Sensex target of 100,000 | Q&A

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mark Mobius, Chairman of Mobius Emerging Opportunities Fund and veteran emerging market investor, maintains his Sensex target of 100,000, noting it could be reached sooner than the previously projected five years.

In a conversation with CNBC-TV18, Mobius highlights India’s promising prospects, especially considering its favorable demographic profile and the anticipated shift in global manufacturing and exports with China’s slowdown.

Read the verbatim transcript of the interview below.

Q: India still top of the list as far as the emerging market ranking for you goes?

A: Yes, it is, for many, many reasons. I have been a big bull on India, but we must take a long term view. And if you look at the long term, India looks terrific. It’s got the right population structure. Now with China slowing down, India is going to be taking up the slack in terms of manufacturing and exports. So India is in a very good position, there’s no question about it.

Q: You are setting up a new fund and you are in touch with lots of investors who would want to put money into your fund and who know what you want to do, you want to put money into India. From a foreign investor point of view what are some of the push backs that you get right now? We are in an election season most opinion polls suggest that to Mr. Modi, and the BJP will come back to come back to power for a third term. So just wanted to sort of get your sense and feedback in terms of what you are hearing from investors.

A: There are questions regarding Modi having so much power and increasing power. But at the end of the day, India is the largest democracy in the world. It’s got an incredible election system that goes on, as you know, for months. I believe that the position of most investors around the world are beginning to change. They have of course, been burned very badly in China. And they are looking for another place in which to invest. And India seems to be the logical choice.

Now, of course, for global investors, they have been making good money in Japan, the US market has done very well. But at the end of the day, India is now beginning to outperform the US market and it makes sense for people to look at India. Now, of course, there’s a problem of size. There needs to be more equity offerings in India, more IPOs and hopefully, more government enterprises being listed in the market, because, as you know, India has some very large government enterprises that could be listed. So that’s a challenge.

But of course, that will come I believe, as Modi gets more strength politically, only, of course he is interesting in digitising the Indian economy and is interested in technology generally. So we are in a very good position now with him getting stronger, with a stronger political base.

Q: I remember speaking with Rajiv Jain of GQG Partners. They are the single largest foreign investor in India now. And he said, the people who invested in China, and that money, in a big way, coming to India, it will happen, but it has not happened yet. It will happen in the future. Do you agree, that that big shift is yet to happen?

A: Yes, and the reason why it hasn’t happened as big as it should happen is because the liquidity is not there. In other words, if you look at the size, the market capitalisation of the Indian market compared to the Chinese market, it’s completely different. China is much much larger, so large investors from the US and other parts of the world find it difficult to put their money, too much money into India. So that’s the reason why I say there needs to be an expansion of the Indian equity market. That means more private companies need to do IPO, but also government privatisation.

And you mentioned infrastructure. I think one area where you can have a lot more size is in the infrastructure area. If you do IPOs of various interceptor projects, whether it be bridges, toll roads, whatever, because the railroads in India is one area that has incredible potential growth.

Q: Just focusing a little bit on the near term theme of elections combined with sectors or themes that you would probably like anything specific, you mentioned infrastructure, but would consumption, financials be themes that you would look at as a run up to elections, and maybe even post-election?

A: Post election, I think the very interesting area would be hardware, technology hardware. As you know, India is a huge exporter of software, they are doing very, very good in software. But now there’s a need to expand the hardware sector, technology hardware. And of course, as people want to diversify their supply chain, away from China, India can take up that slack. You got the population, you have got the capability and I believe that’s going to be a very interesting area for expansion and IPOs, by the way.

Q: What’s interesting is the sort of run up that we have seen in the commodity space. Lot of these hard commodities having seen big multiyear rallies, any preferred equity plays via this space, do you like the metal space in India, gold, silver, how do you play that?

A: That’s a very, very good point, I believe that every portfolio should have some physical gold, very, very important. You can see what’s happened to gold and silver, silver already is outperforming gold. And I think there are a number of reasons for that. Probably the primary one is that, globally, there is a new generation of investors who really don’t trust the central banks around the world, and don’t trust the currency. And they want to hedge their portfolios by buying gold, and silver. So that’s going to be a very interesting development.

As gold moves up, other metals move up as well, because they are betting on commodities in general to preserve their wealth. So we are seeing a big, big shift. And of course, if you look at the cryptocurrencies, you will see they’re moving up at a fast pace as well, in line with gold and silver.

Q: Any other commodities, industrial metals, which standout. Copper, for example, we were supposed to have a big copper super cycle in 2021, we had a sharp move, but then that fizzled. Do you think, copper perhaps makes a big comeback? But just your view and other industrial metals,

A: I think Nickel is worth looking at. Nickel would be one area, mainly because of the battery. Electric car battery consumption is increasing the need for batteries. So nickel might be interesting. But you have got to be very careful with these commodities because at the end of the day, the supply demand equation could be really a problem.

Q: Before we wrap up this conversation, you have previously given a target that the Sensex is probably going to hit that one lakh mark, probably in the next five years. Leave us with any kind of targets for the Nifty and the Sensex, maybe near term, maybe long term, maybe three years, five years?

A: I stick with that target. I think that’s going to happen maybe even sooner than I expected.

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Mark Mobius is optimistic on these sectors within the PSU basket

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mark Mobius, the veteran Emerging Markets Investor and currently running the Mobius Emerging Opportunities Fund, is closely looking at India’s state-run companies, particularly those associated in the infrastructure space.

In an exclusive interaction with CNBC-TV18, he said that the infrastructure sector in the country, particularly railways and airlines is expected to be a high growth sector.

Mobius highlighted that while he has not invested yet within the PSU space, he is looking at it very closely.

“One area where you can have a lot more size is the infrastructure sector if you do IPOs of various infrastructure projects, whether it be bridges, toll roads,” Mobius. He further said that Railways as a sector has “incredible potential for growth.”

In case Prime Minister Narendra Modi is re-elected for a third term after the Lok Sabha polls that commence on April 19, Mobius expects more application of technology, an increase in infrastructure spending, which will be critical to India’s growth. He also expects an accelerated pace of disinvestment.

“A lot depends on the ability of Prime Minister Narendra Modi to reduce the amount of bureaucracy for people wanting to invest in India and willing to put money in the Indian market. That is something he would want to work on,” he said.

Mobius does not like to buy PSU banks as they are subject to a lot of government regulation. “That’s a policy we follow globally,” he said.

Also Read: Mark Mobius wants more Indian IPOs, equity offerings despite record breaking run

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Stock Picks: Mark Mobius lists out three Indian stocks he is currently bullish on

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Tips Industries, Netweb Technologies and Waaree Renewables are three stocks that veteran Emerging Markets investor Mark Mobius is bullish on within the Indian market.

Mobius listed these three names in an exclusive interaction with CNBC.

“I would say they are cheap. And by the way, when I say cheap, I don’t look at price-to-earnings ratios or price-to-book or anything like that. I look at Return on Capital and growth. And that’s why I think they are relatively cheap,” Mobius said.

The veteran Emerging Markets investor spoke of Tips Industries as they are in the music business. “They are involved in creating this music. So its a very interesting company. And if you’ve seen any Bollywood films, you realise its song and dance in a big way,” he said.

Shares of Tips Industries have risen 231% over the last 12 months.

Mobius also mentioned Waaree Renewables, known as a renewable equipments company, as one of his stock picks. He believes that the entire solar industry in India will be growing very rapidly. “So I believe that the end of the day, this will be a fast growing industry,” Mobius said.

Waaree Renewables share price has risen by nearly 400% over the last 12 months.

Netweb Technologies, the recent listing also features among Mobius’ recommendations. The company manufactures hardware products.

“I think its very interesting because India is getting more involved in computer hardware and that’s what they are involved in,” he said.

The veteran investor mentioned that people should look for smaller companies if they seek long term growth.

“I believe for people that are looking for long term growth, you’d go into the smaller companies that are not in the index. That doesn’t say that these other companies are not good. There’s some terrific large companies in India,” he added.

Shares of Netweb Technologies are also up 80% over the last 12 months.

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Mark Mobius takes a ride on Vande Bharat Express, raves about semi-high speed trains

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mark Mobius, better known as the Indiana Jones of emerging market investing, embarked on a month-long journey across the length and breadth of India, exploring diverse cities and gaining firsthand insights into the country’s dynamic landscape.

The purpose behind his Indian odyssey was to get a better “investment perspective” of India. However, the highlight of his journey was how he was left spellbound by the semi-high-speed Vande Bharat Express.

The US-born German fund manager and founder of Mobius Capital Partners LLP took a journey on the Vande Bharat Express from Jaipur to Udaipur and raved about the train service in a blog post. He wrote: “We faced skepticism and warnings against taking a seven-hour train ride. Undeterred, we chose the opulent ‘executive chair car’ aboard the Vande Bharat Express over the standard class. Priced at $30 per person, the experience surpassed our expectations, offering plush reclining seats, two delectable meals of Indian cuisine, and impeccable service.”

Each 16-coach Vande Bharat Express train costs approximately Rs 120 crore and the government plans to connect every nook and corner of the country through these semi-high-speed trains.

Also read: A look at upgraded features of new Vande Bharat trains

The inaugural journey of the Vande Bharat Express train, originally named Train 18, took place on February 15, 2019. As of January 2024, over 40 semi-high-speed trains had been introduced across the country, which not only reduce travel time between cities, but offer passengers an opportunity to view India’s scenic landscape through its expansive glass windows.

The inaugural route from New Delhi to Kanpur, Allahabad, and Varanasi set the stage for the Vande Bharat’s revolutionary journey. This medium-distance train service operated by Indian Railways connects cities which are less than 10 hours apart. These trains can achieve semi-high speeds — however, the maximum permissible speed of the train is limited to 160 km/hour on a section of the Delhi-Bhopal service, and 110–130 km/hour on other services, due to certain restrictions.

Also read: How much time will travellers save after launch of 9 new Vande Bharat trains? Check routes

Notably, the train has achieved 183 km/hour speed during trials, which is much higher than the certified speed 160 km/hour speed. These trains go from 0 to 100 km/hour in under 50 seconds.

The Railways has announced a massive capex of Rs 1 lakh crore to be executed over five-seven years, to meet its target of launching 75 semi-high speed trains on prominent routes across the country by the end of this year.

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Mark Mobius says Gen Z is the big reason why companies globally are rushing to India

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mark Mobius, Founder of Mobius Capital Partners, believes companies around the globe will be targeting India as the next big market. And one of the key reasons for this is its young population.

With 30% of the population in the Gen Z category (15 to 25 years), Mobius anticipates a transformative shift in consumption patterns.

In an exclusive chat with CNBC-TV18, Mobius shared his views on Indian market, artificial intelligence, and his next big venture.

Below are the edited excerpts of the interview.

Q: You stated that you plan to work on new projects in Dubai. So what would your focus area be in your new capacity?

A: Actually the base is Dubai, but it’s going to be global emerging markets again, but the focus will be more on technology. We are looking at companies and situations in areas where artificial intelligence (AI) is being used more extensively, and the entire digitalisation of the economies around the world, particularly in emerging markets is very important and of course, India is probably the best example of that.

Q: So are there any tech-focused AI companies in India, which have caught your fancy so far?

A: Not yet, we haven’t identified any specific candidates. But we are looking very hard, not only in India but globally. It’s important to remember that when we say tech, it doesn’t necessarily mean a technology company per se, in other words, a semiconductor company, or a PC company, but companies that use technology to improve their profitability and their efficiency and that’s where AI comes in.

Q: Recently, Mark, you tweeted your cautious stance on investments in the China market as well. You spoke about how the domestic market in China is struggling a bit. Does that mean that more money will flow into India versus China over the next 12 to 18 months?

A: Well, it’s already happening. If you look at the numbers, you will see flows of money coming into India have been quite substantial and are increasing. And that includes not only portfolio investments but also private investments. So India is going to be getting a lot of money that normally would have gone to China. Of course, there will be investors who will want to go into China and keep investments in China, but India is going to be the beneficiary of this trend.

Q: Mark, you have always been bullish about India excited about its tremendous potential, but are you concerned about the valuations?

A: No, not really, because what we focus on is not necessarily the price-earnings ratio or the price-to-book value ratio, but we are looking at return on investment. And it’s amazing when we do scans of the Indian market, how many companies have a high return on investment, which is a good indicator of growth prospects because if you have a high return on investment, you have a lot of money to reinvest and grow. So this is quite a very interesting phenomenon that we’ve seen.

Q: Coming back to your focus area, which is technology and artificial intelligence, that’s a broad umbrella. There are so many spaces in which AI is used nowadays, healthcare engineering infrastructure, what do you believe will be the next growth area under this umbrella itself?

A: You are absolutely right, it’s a broad area and if you look at things like blockchain, again, it’s used in every industry now. But I would say at the beginning, the companies in which we would be most interested would be those in the software area, companies that are actually developing AI tools that companies can use so that would probably be the first focus. But soon after that, we will move down into companies that are actually using AI and increasing their profitability as a result.

Q: So globally, which would be the best example I am not saying you have invested in a stock like that, but which would be the prime example of a company that you would like, one which is manufacturing AI tools for the world?

A: Probably one of the best examples from a global perspective would be companies that are in the consumer area and using distribution patterns to an AI to improve their distribution and their customer base and probably the very best example globally would be Amazon. Amazon is using AI and all kinds of other digitisation tools to improve their investments and also to improve what companies and products they should be focused on for their customers.

Q: Recently you put out a tweet where you said that you envision the investment landscape in India, evolving to mirror that of the US and that’s a tall statement, because you say that there will be a balance between active and passive strategies and you foresee mutual funds and ETFs gaining substantial traction. And if you look at the market right I mean out of 144 crore people that we have in India, barely 16 crore people have mutual fund folios at the moment, which is not even 11% of the Indian population and investing in mutual funds currently, what do you see as the scope of growth in passive investing over the next one to 10 years?

A: It’s going be very, very rapid because more and more Indians are aware of the opportunities in the stock market, in the bond market and you are going to find incredible growth. In my recent visit to India, I was, by the way, in India for about a month, this last month, visiting seven cities altogether. It was amazing to see the growth and interest in equities among the population. So I think this is going to be a big, big growth area. Some of the companies we visited, were doing this, they were serving retail clients with a portfolio of index funds and actively managed funds. So I see this as a pattern, the pattern that we have seen in the US will be duplicated in India.

Q: So when we talk about India’s tremendous potential one, of course, is this rapid financialisation that we are seeing. In your tours of India over the last four decades can you tell us what has changed? What is it that excites you the most, enthuses you the most in terms of the progress that we have made, which makes you bullish on the market and the economy?

A: Probably the biggest change and the biggest mover for India has been the adoption of technology by the government, the digitisation of the government services, first starting with the identity card, but then moving into so many areas, which has made government more efficient, and has made the individual Indian citizen aware of the opportunities in technology for them in their own life. So I think this has been an incredible journey. I think Mr. Modi has to take responsibility and credit for this change. It’s quite a sea change and something that is quite remarkable.

Q: So the adoption of digitisation by the government, which has been a big focus area is something that continues to be of interest to you. Where else do your interests lie in the Indian market over the next say, 12 to 18 months?

A: I am very interested in the travel and tourism area, because on my trip recently to India, all the sites, all the historic sites were packed with Indians. We were the few foreigners there, but I am sure more foreigners will be coming. But it’s the Indians who are now really having the money and the eagerness to visit their historic sites and tourism sites and this is a big, big growth area, I believe.

Q: Just start zooming out a little bit how do you see the environment for global markets next year? We have seen yields cool off, and crude prices have also climbed down. Now this year was one of the best years for the United States. We had the S&P 500 rallying 20%, and the NASDAQ gained 35%, what kind of global environment you will envisage the next year 2024?

A: I think it’s going to be pretty good because you are seeing inflation coming down pretty rapidly and interest rates, of course, will follow and are following. So the market should be in a pretty sweet spot for that reason. However, it’s important to note that with too much of a decline in money supply, of course, markets sometimes suffer from a lack of liquidity. So that’s something we have to look at. But I would think that we are looking at a pretty good year coming in the markets, it’s going to be very interesting, and I think exciting.

Q: Are you withstanding the possibility of no Fed rate cuts because the street is right now pencilling in the Fed cuts rates, which will be positive for equities globally? What if that scenario doesn’t play out?

A: It’s very important to remember that there’s no direct correlation between interest rates and the market. Sometimes interest rates go up and the market goes down. Sometimes interest rates go down and the markets – it is not a direct correlation. So given that situation, we have to look at other factors. And the other factor in the US is, of course, the economy, the growth of the economy. Hardly enough with all the challenges China, Ukraine, and every other challenge you could think of globally, the US actually becomes more active, and industry tends to benefit from these kinds of changes. So we are seeing employment at high levels, and the economy doing very well, even in this very difficult political environment. So I think this is going to continue into next year.

Q: I want your thoughts on how India is one of the youngest economies right across the globe. I mean, if you look at Gen Z, as we call it, 30% of India’s population is in this age bracket of 15 to 25 years, and they will be the next big consumers. What do you see or rather, how do you see the consumption pattern evolve and as an investor, how would you capitalise on this?

A: Well that is the key, the key is the use of the Indian population that’s really very exciting, not only for India, but for the globe. Because it means that companies around the globe will be targeting India as the next big market. So this is going to be very, very exciting going forward. One of the reasons why you are going to see much more investment in India is because of that, companies around the world will want to take advantage of this young population who are getting richer, and who are ambitious, want to work and want to play, want to spend. This is all very exciting.

Q: Your new book is out ‘The Inflation Myth and the Wonderful World of Deflation’, can you tell us the core thesis behind this book?

A: I wrote the book because I found that the inflation statistics were not very accurate that’s the first thing, but also wanted to point out to people that technology is actually making things cheaper. Now, in currency terms, things look like they are getting more expensive. But if you look at the quality, quantity, and availability of high-tech products, products that have been impacted by technology, you will see that life is getting much, much better. We are actually in a deflationary environment because economists hate the word deflation, but that’s actually what is.

Q: So finally, Mark, you want to advance your target, the last time we spoke, you had a Sensex target of I think, one lakh in the next five years, we are already at 66,000. Do you want to speed it up a little bit?

A: I think I will stick to that. I don’t want to go much higher than that, at least at this stage. Ask me next month.

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India to be a beneficiary of the Chinese market slowdown, says Mark Mobius: Exclusive

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mark Mobius, founder of Mobius Capital Partners, also known as the Godfather of Emerging Markets investing, believes that India will be a beneficiary of the slowdown in the Chinese markets.

China’s FDI flows turned negative for the September quarter for the first time since 1998. The CSI 300 is one of the world’s worst performing equity indices of 2023, declining nearly 10% so far. The Chinese market is set for its third consecutive annual loss.

“It’s already happening. If you look at the numbers, you will see flows of money coming into India have been quite substantial and are increasing. And that includes not only portfolio investment, but also private investments. So India is going to be getting a lot of money that normally would have gone to China. Of course, there will be investors who will want to go into China and keep investments in China, but India is going to be the beneficiary of this trend,” Mobius told CNBC-TV18 in an exclusive interaction.

However, foreign institutional investors have been net sellers in the cash market in October and in November so far as well. Despite that, the Indian market has seen FPI investments well ahead of $10 billion so far in 2023.

So far, the Nifty 50 has rallied nearly 1,000 points from the October 26 low of 18,837. At current levels, the Nifty 50 is trading at a one-year forward price-to-earnings ratio of 18.84 times. But Mobius is not perturbed about the valuations of the Indian market.

“What we focus on is not necessarily the price earnings ratio, or the price to book value ratio, but we are looking at return on investment. And it’s amazing when we do scans of the Indian market, how many companies have a high return on investment, which is a good indicator of growth prospects, because if you have a high return on investment, you have a lot of money to reinvest and grow. So this is quite a very interesting phenomenon that we’ve seen,” Mobius said.

In an earlier interaction with CNBC-TV18, Mobius had mentioned that India is the place to be when it comes to Emerging Markets investing.

Mobius, the seasoned investor will be stepping back from Mobius Capital Partners, which he co-founded five years ago, after a stint with Templeton for over three-and-a-half decades. As of February, the fund managed $250 million in assets.

However, Mobius is planning a new venture in Dubai, which will also focus on Emerging Markets but will focus more on technology.

“We are looking at companies and situations in areas where AI is being used more extensively, and the entire digitalisation of the economies around the world, particularly in emerging markets is very important and of course, India is probably the best example of that,” Mobius said.

However, he has not indentified any specific AI-related stock pick in India just yet. He cited the example of Amazon as a company which is harnessing the AI concept well. “Amazon is using AI and all kinds of other digitisation tools to improve their investments and also to improve what companies and products they should be focused on for their customers,” the veteran investor said.

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The stars are well aligned for emerging markets

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Emerging markets are poised for growth, buoyed by favourable interest rates, a stable US dollar, and beneficial oil prices, per Mark Matthews of Bank Julius Baer & Co.

Matthews pointed out that Korea and Taiwan currently feature among emerging markets but they should be classified as developed markets. In fact, he believes Korea will be added to the MSCI’s developed market index and taken out of emerging next year. But excluding Korea and Taiwan, he noted, “the really big two we all know are China and India.”

Matthews expressed concerns about the Chinese economy.“The momentum is bad. The October numbers show particularly worrying signs in the property sector, property prices, property sales, and new construction starts were all significantly worse than even poor expectations.”

And so, in the absence of a compelling reason to invest in China, he believes there’s only India. Nobody’s going to buy Russia and while some investors might look at Brazil, it is far away and hard to understand, he noted, adding that the remaining are very small markets like Southeast Asia and the rest of Latin America.

Drawing parallels between China and India, Matthews said that both countries have price-to-earnings (PE) ratios that are in line with long-term averages, suggesting a level of stability in valuations.

Talking further about India, he said, “No change in our view. We like it, the price-earnings ratio is bang in line with the long-term average at about 19 times forward earnings and high teens, possibly even low 20s earnings growth, depending on what the oil price does. So why not be in India and we are.”

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Other global market experts have also been highlighting the attractiveness of India within the emerging markets landscape.

In an exclusive chat with CNBC-TV18 in September, veteran investor Mark Mobius, who manages nearly $300 million across various countries, said that global investors who intend to invest in Emerging Markets, have India as the main option.

The next in line was Taiwan, but due to challenges arising from issues with both China and the United States, there were no plans to significantly increase exposure there. Korea was also on their list, along with smaller positions in Thailand and Turkey, the latter being a very minimal allocation.

“Therefore, India remains the primary focus with the most significant weightage in the portfolio,” he said.

Also Read | India has delivered more multibaggers than any other emerging market

According to Cameron Brandt, Director of Research at EPFR Global, promising economic prospects, political stability and strong growth potential help a notable bias in favour of emerging Asian markets in the global investment landscape.

Also Read | Mark Mobius to step back from Mobius Capital Partners, plans to work on new projects in Dubai

For more details, watch the accompanying video

Also, catch all the live updates on markets with CNBC-TV18.com’s blog

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Mark Mobius to step back from Mobius Capital Partners, plans to work on new projects in Dubai

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mark Mobius, the seasoned investor renowned for his expertise in emerging markets, is planning to step back from the investment firm that bears his name, which he co-founded five years ago.

“It’s been an incredible journey at @MobiusCap , where I witnessed its growth and success, going forward I will be shifting my focus and dedicating more time to exciting new projects in #Dubai, centered around #entrepreneurship investments and consulting. I also have two new books coming out soon so stay tuned for more updates!” Mobius tweeted on X. 

The London-based Mobius Investment Trust will continue to be overseen by Mobius Capital Partners LLP, led by Founding Partner Carlos Hardenberg, as confirmed by a statement from the trust on Friday. As of February, the fund managed $250 million in assets.

Mark Mobius, aged 87, established his investment management firm in 2018 following his retirement from Franklin Templeton Investments, with the ambitious goal of raising approximately $1 billion within two to three years. The fund’s primary focus was on developing regions, including China, India, Latin America, and frontier markets.

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Mobius has a long and distinguished career as one of the pioneers of the emerging-market asset class, which originated in the 1980s and has since evolved into a $25 trillion opportunity. His expertise in navigating markets less familiar to typical US investors led John Templeton to invite him to establish a fund for investments in these countries.

With decades of experience in emerging markets, Mobius is well-known for his prescient calls. He accurately predicted the commencement of the bull market in 2009, seized opportunities during the Asian financial crisis that followed Thailand’s currency floatation in 1997, and invested in Russian stocks during the panic selling of 1998.

Mobius was also among the first institutional investors to recognize Africa as a promising frontier market, establishing the Templeton Africa Fund in 2012. In 2021, he forecasted a “50-year rally” in Indian stocks. Mobius often attributes his openness to different cultures and his ability to identify unique opportunities to his mixed-race background – his father was German, and his mother was Puerto Rican.

Born in Hempstead, New York, Mobius grew up on Long Island, speaking German and Spanish at home. In 1955, he earned a scholarship to study at Boston University and worked as a pianist at a nightclub to help cover his tuition expenses. Mobius graduated with a bachelor’s degree in fine arts, followed by a master’s in communications, before completing a doctorate in economics at the Massachusetts Institute of Technology.

Also read: Mark Mobius says India is the place to be when it comes to Emerging Market investing: Exclusive

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