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Image: Business Today

Renowned emerging markets investor Mark Mobius believes India remains a top investment destination despite global economic uncertainties. In an interview with CNBC-TV18, Mobius said it “does not make sense” for investors to reduce exposure to India given the country’s “terrific investment opportunities.”

The founder of Mobius Capital Partners, which oversees nearly $300 million in assets, revealed his funds’ allocation to India has doubled to 20% compared to his historical 5–10% exposure. This underscores his conviction in India’s long-term growth story.

India Offers Favorable Macro Dynamics

Mobius attributed his optimism to India’s positive macroeconomic fundamentals. “Over the long term, India’s macro factors are more favorable because of demographics, as well as specific companies’ growth prospects,” he stated.

India is set to become the world’s most populous country by 2023, with a median age of just 28 years old in 2020. This young demographic profile provides a significant consumer market and talent pool to drive economic expansion.

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Meanwhile, India’s GDP growth is projected to accelerate to 6.9% in 2023 and 7.2% in 2024, making it one of the fastest growing major economies globally, according to the IMF.

Bullish on India Despite Global Turmoil

Mobius expects India to withstand global turmoil better than most markets. He pointed out that while rising interest rates in the U.S. and a stronger dollar have spurred foreign investor outflows since August 2022, India is relatively well positioned.

“India will be affected with the macro economic changes taking place globally,” Mobius noted. However, he believes the U.S. interest rate hike cycle is approaching its peak.

Likewise, he sees crude oil prices nearing their highs as alternative energy adoption accelerates. This should relieve pressures on India’s current account deficit and inflation outlook.

Tech and Digitalization Key Investment Themes

In terms of sectoral plays, Mobius favors technology and digitization stocks that can tap into structural growth trends in the Indian economy.

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“Picking stocks in India is all about technology and digitization,” he remarked. Specifically, his funds are bullish on software exporter Persistent Systems, medical testing firm Metropolis Healthcare, and mapping technology provider CE Info Systems.

These picks align with Mobius’ view that India’s growth will be led by domestic consumption and services. He sees manufacturing giant China losing momentum amid geopolitical tensions.

India Outperforms in Challenging Global Environment

Mobius’ vote of confidence in India comes at a time when global equity markets are reeling from heightened volatility. However, Indian stocks have showcased relative resilience.

The benchmark Nifty 50 index crossed the 20,000 mark in early September before pulling back. Still, it is up nearly 10% year-to-date — making it the top performing major index globally.

On September 28, the Sensex rebounded from early declines to settle 0.26% higher, aided by buying in heavyweights like Reliance, L&T and ITC. This underscores domestic investors’ faith in India’s structural growth story despite external shocks.

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Key Takeaways

  • Mark Mobius believes India has “terrific” investment opportunities and deserves higher allocation despite global turmoil
  • He cites favorable demographics, corporate earnings and technology/digitization potential as India’s key strengths
  • Mobius expects India to navigate global headwinds better than peers due to peaking interest rates and crude prices
  • His funds are betting on software, healthcare, construction and mapping tech stocks tied to domestic consumption
  • Indian equities have outperformed globally in 2022, affirming confidence in the economy’s resilience

As a leading emerging market investor, Mobius’ bullish view signals India may be entering a structural upcycle. Investors would do well to ride the India growth story through a well-diversified portfolio of stocks aligned with domestic demand drivers.

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