Mark Mobius, emerging markets investment guru and founder of Mobius Capital Markets, believes that a lot of the money, re: investments, that were supposed to go to China is going to come to India. His comments come as China FDI inflows declined nearly 10 per cent for the first time since 1998.
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In an interview with CNBC-TV18, Mobius said, “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 get a lot of money that normally would have gone to China.” Mobius acknowledged that there would still be investors willing to go and invest in China, but India would continue to be the beneficiary of this trend.
Foreign investment flows into China slid 9.4 per cent on-year to $136.4 billion in the first 10 months, as said by the country’s commerce ministry on Friday.
In India, foreign institutional investors have been net sellers in October and November but the Indian economy has seen FPI investments beyond $10 billion so far in 2023.
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Mobius, in the interview, elaborated that they look at the return on investments over price earnings ratio or price to book value ratio. He said it is amazing when they do scans of the Indian market to gauge how many companies have a high return on investment. If you have a high return on investment, you have a lot of money to reinvest and grow, said Mobius.
Recently, speaking at the Morningstar Investment Conference, Mobius said that he expects Sensex to go to 100,000 in the next five years. “I think the Sensex will go to 100,000 in the next five years easily… But there will be corrections on the way. There will be downturns as markets are like that. I love when the markets go down because it gives you an opportunity to buy cheaply. I conserve cash waiting for that opportunity,” he had said at the event last month.
He also said that the outlook for the Indian economy looked exciting due to positive factors such as diversity and demographics. He said that India is second-largest in terms of country exposure in their portfolio and they “made a lot of money in India in the last few years”. He said India’s diversity is its strength, along with its creativity, young population and adoption of technology.
