MUMBAI: Emerging markets guru Mark Mobius has underscored the need for India to create a one-stop shop for investors while suggesting that the country is changing faster than China in the last two decades.
The emerging markets doyen said the Indian government should make it easier for overseas investors to put money into the market and ease export norms to make the most of the ongoing trade war globally.
Addressing the Morningstar Conference in Mumbai today, the founder of Mobius Capital Partners observed that a higher import bill could put Indias fiscals at great risk should crude oil top $100 a barrel by early next year.
He is also of the view that India may benefit from the trade tussle between the US and China because the latter may not be able to export a number of things and perhaps India could replace China in that regard. The currency meltdown is nearing its end, he added.
Mobius, known for his obsession with emerging markets, had been Executive Chairman of Templeton Emerging Markets Group for 26 years till last year when he decided to step down and float his Mobius Capital Partners, a fund management firm focussed on environmental, social and corporate governance in emerging and frontier markets. Templeton Emerging Markets has £2 billion in assets.
Last month, Mobius launched the Mobius Investment Trust, raising £100 million amid an emerging market selloff. The fund aims to generate annual returns of 12-15 per cent for investors.
Rupee pain over, almost
The rupee, Mobius said, is pretty much near the bottom. Mobius has in the past criticised Indias bid at currency controls, which he said would be a big dampener for foreign investors.
In a recent interview, he equated the currency selloff in emerging markets with the 1987 crisis.
“Back then, we had Black Monday and a bear stock market. Sentiment was not good and the thought of launching an emerging markets trust in the turbulence of all that a couple of years later was seen by some as crazy. But we did and it was incredibly successful,” Mobius said.
Big opportunity for India
Mobius, often referred to as the Pied Piper of emerging markets, further said the current round of currency depreciation around the world is a big opportunity for India to grab a bigger share of the exports market.
But for that, he was quick to add, India needs to accelerate reforms and ease rules for exports. According to Mobius, India needs to do a whole lot of reforms to draw capital to make the most of the emerging opportunity.
He acknowledged that Indian banks non-performing asset (NPA) numbers may be worse than they look. But there are some good opportunities emerging in NBFC and other areas of the financial sector, the investment guru pointed out.
He finds Indias consumer sector very attractive.
Trump & trade war
Trade war situation is going to get worse from here on, he predicted, adding that time has come for the Indian government to take advantage of the US-China trade war and grab some of the manufacturing capacity moving out of China.
As far as the two countries involved are concerned, Mobius said it is in the interest of the US to do something about the issue. "China is big and there is a huge opportunity there. But its going to get tougher for China as well probably," Mobius said further.
“Trump thinks like a businessman which is helping businesses. People have started coming around Trumps brash personality. We will continue to see good growth in the US. The US economy may see a downturn in 2-3 years,” he maintained.
Hunt for value
Mobius gave a thumbs-up to Indias labour practices in the services sector, but believes they need a huge improvement in the manufacturing sector.
"In our hunt for value, we often pay least attention to people behind a business — people behind a company, what kind of morality they have. Those who pay heed to the philosophy of a winner are the real winners," he let out.
"We want to see women on boards," he stressed, in unequivocal terms.
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