In a recent interview, Mobius, founder of Mobius Capital Partners, summarized his explanation for staying bullish on Indian stocks and the kind of companies he will finance in current market conditions. “The problem is that if cryptocurrencies go down, other markets in nexus with it, directly or indirectly, will crash as well,” Mobius said.
As pointed out by him, thousands of investors feel prosperous because of their finances in crypto, so when cryptocurrencies go down, they are likely to feel less affluent and may drop out of other markets as well.
Mobius believes that over 50 per cent of foreign investors in India rely on exchange traded funds (ETFs), which implies that they are observing the index. According to him, investors tend to concentrate on those companies that can survive any storm in the market, like that of enterprises with low debt, good EPS evolution, and reasonable return on capital.
Mobius mentioned that many tech companies have performed inadequately because they are not making any money, and these businesses fear to suffer badly in a higher interest-rate setting. Praising India for its overall has done nicely in the software arena, he said that there are still companies that will persist in doing well in this area and India will evolve into a potent producer of computer peripherals, whether personal computers or smart phones.
Praising government for vending more shares in state-owned establishments, he added that it vitalizes the equity markets and makes India influential as its market capitalisation increases because of more listings. Mobius wished India was as immense as China because the EM index would not have fallen then. The government needs to enlist more of such government companies in the future. Because LIC's scale is massive, large foreign investors will get lured into buying it because of positive future prospects. He also expressed his concerns mentioning the recent downturn in the market, due to which the reception to the IPO may not be as significant.
