Mark Mobius, Chairman, Mobius Emerging Opportunities Fund believes that Indian markets will deliver 14-15% returns over the longer term. Mobius, a renowned investor, shared his insights on the potential returns from the Indian stock market over the next three to five years in an interview with ET Now.
When asked about his expectations, Mobius stated, “Over the longer term, I believe you are talking about 14-15% returns for India.” He explained that as a general rule of thumb, one can double the GDP growth rate of the market to estimate stock market returns.With India’s real GDP growth at 7-8%, Mobius projects the stock market to deliver returns of 14-15-16% in the future.
Regarding the recent record highs achieved by Indian markets, such as the Sensex surpassing 75,000 points, Mobius was questioned about his earlier prediction of the Sensex hitting the one lakh mark.
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When asked if he expects this milestone to be reached within the next 12 to 18 months, Mobius said, “I would not say the next 18 months, but as I mentioned when I first made that prediction, within the next few years.”
Mobius also noted that the global markets, including the US, have been performing well, and the Indian market has been keeping pace. In some months, India outperforms the US, while in others, the US takes the lead, he said.
Mobius is of the view that there is still significant potential for growth in the global market, and the increasing interest in equities worldwide, especially in the US, is benefiting India as well. As investors in the US make substantial profits, they seek to diversify their portfolios globally, and India has become one of the most attractive destinations for investment, he added.
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Despite the strong performance of the Indian market, there has been a notable outflow of foreign institutional investors (FIIs), with a year-to-date selloff figure of $3.3 billion.
Mobius says that this can be attributed, in part, to hedge fund activity. However, it is essential not to focus too heavily on these short-term movements, he said.
“At the end of the day, you are going to be getting a lot of long-term money, not only in the equity market, not only in the fixed income market, but in direct investment in manufacturing and distribution and other areas. India is a huge market and there are lots of opportunities for global investors.They are going to take advantage of that opportunity,” he said.
When asked about his expectations, Mobius stated, “Over the longer term, I believe you are talking about 14-15% returns for India.” He explained that as a general rule of thumb, one can double the GDP growth rate of the market to estimate stock market returns.With India’s real GDP growth at 7-8%, Mobius projects the stock market to deliver returns of 14-15-16% in the future.
Regarding the recent record highs achieved by Indian markets, such as the Sensex surpassing 75,000 points, Mobius was questioned about his earlier prediction of the Sensex hitting the one lakh mark.
Also Read | Repeat of 2004 shock defeat for NDA appears unlikely, says Jefferies’ Chris Wood; cautions on capital gains tax changes
When asked if he expects this milestone to be reached within the next 12 to 18 months, Mobius said, “I would not say the next 18 months, but as I mentioned when I first made that prediction, within the next few years.”
Mobius also noted that the global markets, including the US, have been performing well, and the Indian market has been keeping pace. In some months, India outperforms the US, while in others, the US takes the lead, he said.
Mobius is of the view that there is still significant potential for growth in the global market, and the increasing interest in equities worldwide, especially in the US, is benefiting India as well. As investors in the US make substantial profits, they seek to diversify their portfolios globally, and India has become one of the most attractive destinations for investment, he added.
Also Read | ‘On June 4, markets will…’: PM Modi’s big prediction for Sensex on Lok Sabha election results day
Despite the strong performance of the Indian market, there has been a notable outflow of foreign institutional investors (FIIs), with a year-to-date selloff figure of $3.3 billion.
Mobius says that this can be attributed, in part, to hedge fund activity. However, it is essential not to focus too heavily on these short-term movements, he said.
“At the end of the day, you are going to be getting a lot of long-term money, not only in the equity market, not only in the fixed income market, but in direct investment in manufacturing and distribution and other areas. India is a huge market and there are lots of opportunities for global investors.They are going to take advantage of that opportunity,” he said.