Marc Faber, who had till recently maintained that India is his preferred destination for investing, has turned positive on China, given the run-up in Indian markets. In conversation with CNBC, the author of Gloom, Boom & Doom report said, “I think if you look at the major markets here in Asia, India and China, India is up close to 30% in dollar terms, and China hasn’t gone up a lot. So, I think some money will be taken off the table in India and move into China.” Speaking specifically about his positions, he told the channel, “I also increased my positions in China.”
Earlier last month, Marc Faber told ET Now that he has turned cautious on Indian equities given the run up, and is not adding any further to his Indian positions as valuations look stretched. He said he now believes that that the Indian equities are expensive. Further, the veteran investor did not rule out a ‘healthy’ correction at these levels, saying that a further rally may lead to a market bubble.
In its latest research report, DBS Research Group says that foreign portfolio inflows have moderated into the second half of 2017 in India, after a strong first half. According to the research firm, this appears to be more pronounced in the last two months, as total inflows thinned to $0.4 billion in August and turned to net outflows of $0.2billion in September, from from a monthly average of $3.8 billion in the first half. The research firm attributed the fall to slowing debt inflows, as debt inflows accounted for three-fourths of total inflows in the first half.
Further, sharing his outlook on how the second half of the year is going to pan out globally Marc Faber said, “I think that the environment going forward, as has been the case in the first half of the year, is that active managers can perform well by being overweight market, because we have volatility and some markets are becoming depressed.”
In the same interview, the veteran shared his outlook on emerging markets.“ I’ve been very positive about emerging markets for about a year relative to the US, because after 2014, emerging markets grossly underperformed the S&P500, and it’s just around christmas time 2016, going into 2017 that they started to outperform the US. The outperformance has been particularly pronounced in a market like Mexico,” he told CNBC.
Marc Faber expects India’s Prime Minister Narendra Modi to be re-elected in 2019 on the back of the development agenda, the renowned investor said in an interview with ET Now last month.