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The Trump 2.0 administration will not favour the Chinese market and if you look at the global picture, where else can investors go? India comes up all the time, says veteran emerging market investor Mark Mobius.
Mark Mobius advises investors to consider consumption-focused industries, such as housing and FMCG, as viable investments, given the steady rise in India’s per capita income.
Veteran emerging market investor Mark Mobius on Friday said a weaker rupee will be beneficial for export-oriented companies earning dollar income as they become more competitive. He also sees India as a strong investment opportunity due to its growth, reforms, and the Trump 2.0 administration’s unfavourable stance towards China.
During an interaction with CNBC-TV18, Mobius said, “Those companies that are exporting, let’s say Infosys that exports a lot of software, are going to become more competitive because of the weakening of the rupee.
The Mobius Emerging Markets Fund’s founder added that many of the stocks in India that have a US dollar income component will continue to do good.
The rupee depreciation is likely to continue due to the strength in the dollar and India’s wider trade deficit, with the currency likely to hit 86 by the end of this year, as per estimates.
Stating that he continues to be optimistic about India, Mobius said, “The Trump 2.0 administration will not favour the Chinese market and if you look at the global picture, where else can investors go?… India comes up all the time because of the incredible growth of the country, because of the reforms that are taking place under the current government, and so much of value in the market including companies with very high return on capital.”
He also expects that President-elect Donald Trump will be cutting down on a lot of paper work for doing business in America. “This will be very good for foreign companies as well,” said Mobius, adding that the country will benefit as it is the ‘natural choice’ for manufacturing after China, and given the extent of reforms that are currently taking place in India.
“My personal desire is to be 50 per cent invested in India,” said the 88-year old emerging market veteran.
In the consumption space also, Mobius said he would look at export-oriented companies, given the currency situation and India’s gradually increasing competitiveness against Chinese exporters.
He also advised investors to consider consumption-focused industries, such as housing and FMCG, as viable investments, given the steady rise in India’s per capita income.