We are at the start of a new long-term bull run for Indian markets: Mark Mobius
"India is one of the fastest growing countries in the world and I think the Indian market is going to continue to do well," says Mark Mobius, Mobius Capital.
What is your take on the markets?
I think the markets are going to do very well, particularly here in India. As you know, India is one of the fastest growing countries in the world and I think the Indian market is going to continue to do well. Of course, there will be declines from time to time but these will be very temporary. The opportunities are so great here and as far as the US market is concerned, I believe that market will also do well because now the whole business of the budget has been passed and now there is no problem of the dollar being raided as a result of the deficit problem.
So, just a while back, Indian markets along with global markets were rallying in anticipation that probably the data is showing that inflation has peaked out and that worry is over. Then came Fed and our own central bank also saying that it is just a pause, not a pivot, and market got a bit nervous. What is the reality in your view?
The reality is that money supply has gone down precipitously. It is an amazing and that means that inflation will be coming down. It is already happening. So, I believe the central banks are being maybe too cautious at this stage.
Okay, so they do not want to err on that side, so probably they are actually being a little extra cautious is what you are saying.
The other thing about India, what stood out this quarterly season was the quality of earnings. By and large, the earnings were either in line or better than estimate. Street was scared. And yes, yesterday evening, even the fourth quarter GDP data was a pleasant surprise. What are these things indicating about the future of stock markets for the next few quarters in your view?
What it means is that because of the 7% growth that we are looking at for this country, companies are going to do very well because usually the earnings of good companies with good return on capital will be double that of the GDP growth. So, we are looking at 14% earnings per share growth for many, many companies. So, I believe the outlook is excellent.
Out of all the emerging markets which you study, where does India stack right now in its attractiveness?
Highest. India is the highest.
India is the most attractive emerging market in your view?
Most attractive, yes, exactly.
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