Mark Mobius, a well-known emerging economy fund manager, has been one of the most successful investors to have managed several investments. Mobius was in India to promote his book 'Invest For Good – A Healthier World And A Wealthier You' that is being co-authored by Carlos von Hardenberg and Greg Konieczny. Despite the Indian economy growing at 5 per cent, slowest in the last 6 years, Mobius has remained bullish.
As quoted by Reuters, Mobius said, "a slide in emerging markets provides a good buying opportunity for some countries and stocks but falling interest rates will lead to irrational capital allocation and an eventual crash".
Mobius further added that in the long term, the Indian economy is expected to do well and investment must be made keeping in the same perspective. However, Mobius feels that major reason which could affect India's growth is taxation.
Recently, India introduced an additional surcharge on super-rich including FPI trusts, which had a negative effect on FII inflow, since July. Although Finance Minister Nirmala Sitharaman rolled back the decision of surcharge on August 23 but enough damage was already done. Notably, since July 2019, FII has been a net seller with Rs 31,000 crore worth of withdrawal of money from equities. In an interview to CNBC-TV18, Mobius said, "India will continue to grow in the long-term, but there is a lot of confusion w.r.t taxation."
"The rolling back surcharge levied on FPIs was a very good move, but he believes India's growth can be corrected in a year or two as internet revolution is hitting every country including India," Mobius also added. Moreover, the other reason why he remains bullish on Indian economy is because of the Prime Minister Narendra Modi's reform and also "because of the incredible growth potential of over a billion people being lifted out of poverty."
Talking on Trade war, Mobius believes that India is going to benefit due to trade war between the world's two largest economies, China and the United States. Trade war has badly impacted China's export and India could fill in the gap. He argued, "With the problems, China is facing with exports, India has the opportunity to acquire some of that business. India has shown its ability to export software around the world, now they will be able to export manufactured products to a much greater extent."