After record highs , the markets have been correcting since October-end. The stock market has been in constant flux, with both Sensex and Nifty closing ~0.20% points lower on 14 December.
Does a fall in the levels raise your heartbeats? Do you find yourself not far from the panic button and selling to mitigate your losses in the short term?
Well, any sharp falls add to your worries if you invest with an eye on near-term profits only.
Stop, and consider the gains you can reap if you’ve invested in fundamentally strong stocks that are bound to grow in the long run. That is what Mobius Capital Partners Founder Mark Mobius has to say.
Mark Mobius believes India is on a 50-year rally even if there are short sessions of Bear markets along the way. He says India is where China was a decade ago. The Government’s decision to unify rules across states may help in the long run.
The Emerging-market equities lagged as they suffered losses due to the Chinese Government’s regulatory crackdown. Many believed emerging markets were a bad bet as China was dragging the index. However, Mark said people must turn their attention to other markets like India and Taiwan that were going up.
The Mobius Emerging Markets fund has a combined 45% of its portfolio allocated to Taiwan and India to put action into words. Tech Software and hardware make up a large chunk of their fund portfolio. Mobius Capital has substantial stakes in India’s software services provider Persistent Systems Ltd, and Taiwan’s chip technology business eMemory Technology.
What makes Mark bullish on India?
Mark feels investors can look at other profitable markets now that China’s market is falling. India is a good market to invest in since the government has better control in preventing monopolies. Mobius Capital prefers small and medium-sized companies, which will benefit from the regulatory changes.
The fund invests in companies that have the potential to augment their earnings, continue to do well, and innovate too. They plan to buy Indian stocks when the stocks are down. However, Mobius Capital limits how much they can buy in any company or country. India holds a 20% weightage in its portfolio.
Why is Mark more positive about India than China?
The markets are down in China and will continue to fall due to Chinese reforms affecting several companies and industries. Mark believes opportunities in India for medium and small-sized companies are better than in China.
Better corporate governances and responsive MSMEs and SMEs in India make it an attractive market to invest; especially, if they have an ESG culture. These things together have made Mark Mobius optimistic about India than China for the next 50 years.
Will India have double digit growth?
Mark believes India will continue to have a double-digit growth; since the government is infusing money into the economy with the third wave of the virus looming. It’s time to party in the markets when there is enough liquidity and the interest rates remain low.
While the pandemic-led cases increase, so does the market based on better liquidity and Government policies that benefit investors.
What could make Mark reduce his exposure to India?
Mark does not foresee them reducing their exposure to India unless the Government sets out policies detrimental to FDIs. Another reason Mobius Capital would reduce their stake could be if the companies they have invested in, stop growing, suffering continuous losses, and more.
Mark is very optimistic about the prospects of India, are you?
Share your thoughts and opinions.
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Read more: How Long-term investing helps create life-changing wealth – TOI.