1. Legendary investor Mark Mobius bullish on India; says market opportunity beats red tape

Legendary investor Mark Mobius bullish on India; says market opportunity beats red tape

Legendary emerging markets investor Mark Mobius is bullish on India as a market despite all the bureaucratic hurdles that may come up. However, India must make it easier to invest in the country not only for foreigners but for domestic investors too.

By: | Updated: June 14, 2017 10:40 AM
Legendary emerging markets investor Mark Mobius is bullish on India as a market despite all the bureaucratic hurdles that may come up. However, India must make it easier to invest in the country not only for foreigners but for domestic investors too. (Image: Reuters)

In a major boost to Prime Minister Narendra Modi’s efforts to augment foreign investment inflows into the country, the legendary emerging markets investor Mark Mobius said yesterday that he is bullish on India as a market for the investors despite all the bureaucratic hurdles that they may face here.

However, India must make it easier to invest capital into the country not only for foreigners but for domestic investors as well, veteran investor Mark Mobius said. “Bureaucratic hurdles are still quite significant in India. Even with bureaucratic barriers, we believe India remains a very attractive destination for investors,” Mark Mobius, Executive Chairman of the Franklin Templeton Emerging Markets Group, which has about $2.5 billion worth assets under management, said in a blog post.

Further, Mark Mobius said that the recent downgrade of China’s sovereign rating may also lead to an increase in the inflow of overseas funds into India, even as he cautioned that the first rating cut by Moody’s since 1989 from A1 to Aa3 was quite small and would not cause any long-term issue.

“China’s downgrade could result in more funds flowing to India instead of China but I don’t think it will be significant at this stage because the debt downgrade was quite small and still kept China in the investment-grade category,” Mobius said.

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The 80-year-old veteran, who has been investing in the emerging markets for over four decades now, had said in April that he is finding small-cap stocks in India interesting, in the face of a surge in the valuations of the large cap companies shares. “The big caps are expensive, but small caps are interesting,” Mobius had said.

He said that another factor in favour of India is the large number of listed companies available to trade in on Indian stock exchanges because this allows investors to find lots of good bets. There are about 5,500 stocks listed and available for trade on the Bombay Stock Exchange – Asia’s oldest bourse. “The beauty of the Indian market is that it’s huge – the number of companies is huge, so we have a lot of choices,” Mobius had said.

Further, Mobius said that the impending introduction of Goods and Services Tax (GST) will benefit a lot of companies, making them more attractive investment bets. “The impact of this tax (GST) – having one tax for all the states – is going to have a big, big impact on all the companies, particularly the small ones,” Mobius had said, adding, “What you are going to see is an acceleration in earnings per share, so the predicted price-earnings ratio will come down pretty dramatically in many of these companies.”

(Originally published on Tuesday, June 13, 2017 on www.financialexpress.com)

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