Mark Mobius, the veteran investor and founder of Mobius Capital Partners, has expressed his strong conviction in India’s potential as the premier choice for emerging markets (EM) investing. In a report by CNBC-TV18, Mobius emphasized that it doesn’t make sense to reduce one’s investment weightage in India, given the incredible investment opportunities the country offers.
Mobius, who manages assets worth nearly $300 million across various countries, pointed out that global investors looking to invest in emerging markets see India as the primary option.
Currently, Mobius maintains a 20% exposure to India, which is double the historical 5-10% exposure he typically had. He highlighted that India will experience the effects of the macroeconomic changes occurring globally. Recent developments, including the US Federal Reserve projecting one more rate hike for this cycle, have roiled global markets, including the US.
However, Mobius holds the view that the interest rate cycle is nearing its peak, and the Fed is unlikely to raise interest rates further. He also mentioned that Indian equities have faced headwinds from record-high US bond yields, a stronger US dollar, and elevated crude oil prices since August 2023.
Moreover, crude oil prices, which currently hover around $95 per barrel at multi-month highs, have been another challenge for Indian equities. Mobius believes that, akin to US interest rates, crude oil prices are also nearing their peak as more people transition to alternative energy sources.
Mobius sees India’s macroeconomic factors as favorable in the long term, driven by demographics and the growth prospects of specific companies. He highlighted his preferences for companies such as APL Apollo Tubes Ltd., Metropolis Healthcare Ltd., Persistent Systems Ltd., CE Info Systems Ltd., and Dreamfolks Services Ltd. in the context of India’s technology and digitization boom.
India’s stock markets have witnessed a mix of highs and lows in September, with the Nifty 50 index surpassing the 20,000 mark before experiencing a corrective phase. The benchmark index is on track to post its eighth consecutive year of positive returns, up nearly 10% for the year. In September, the Nifty 50 emerged as the top-performing index globally.
While Indian markets have experienced fluctuations, the domestic equity benchmark Sensex rebounded from early lows to close higher by 173 points on a recent trading day. Positive trends in Asian and European markets, along with buying in key stocks, contributed to this recovery.
Mark Mobius remains bullish on India as a prime destination for emerging markets investing, citing the country’s resilient long-term prospects despite global economic challenges.
