Mark Mobius, the Chairman of Mobius Emerging Opportunities Fund, is of the opinion that returns in India will be 14-15% in the long term. Moebius, a well-known investor, has provided his thoughts on possible gains from Indian stock market In an interview with ET Now he told us what would happen within three to five years.
Mobius responded, “Over time, I think you are looking at about 14% – 15% return and you are right.” He said that when it comes to estimating returns for stock markets one can use Gross Domestic Product Growth Market interest rates.As a result of this situation where India has realized GDP growth rate of approximately 7-8%, Mobius sees the future return on its equities as being only 14-15-16%.
However, critics have recently questioned his earlier prediction that Sensex could surpass 100000 points as evidenced by such historical highs including Sensex breaching 75000 points.
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“I wouldn’t say over the next eighteen months but I’ll tell you this; it’s not going to be fifteen or even twelve months into the future”, Mobius replied. He further stated that these values will be reached over several years as opposed to just hitting them once again in one and half years’ time frame after he had made this projection before.
The world markets including America have performed better than excepted while India has also been good too,” according to Mobius. There were months where India outperformed United States and others wherein US took the lead.
According to him, global market still provides huge opportunities for growth and this has benefited India from increased interest in international stocks notably from American investors who are currently making more money so they want other places apart from US. He continued that the US investors have made substantial gains and now they are seeking to invest around the world, which is one of the reasons why India is considered as one attractive destination for foreign funds.
Capital outflows witnessed in the Indian market despite its good performance amount to $3.3bn year-to-date foreign institutional investors (FII).
Mobius said a part of it may be attributed to hedge fund activity though he cautioned against focusing too much on these short term moves.
“At the end of which time you will have access to a huge amount of long-term finance in terms not only of equity markets but also from fixed income securities and specifically direct investment in places such as manufacturing and distribution. There are many opportunities for global investors given that India is a vast market”.
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