Indian Market's Bull Run To Stay For Next 10 Years: Ace Investor Mark Mobius | EXCLUSIVE

The Bull run in the markets is here to stay for the next 10 years in India, Mark Mobius, ace investor and chairman of Mobius Opportunities Emerging Fund, said in an exclusive conversation with Republic Business. In a freewheeling conversation, Mobius spoke at length about the markets bull run, rupee depreciation, Trump's pledged tariffs on China and Mexico, and their impact on India.

Edited Excerpts:

What Kind Of Returns Do You Expect From The Market In Next 2 Years?

Well, generally speaking, if a country is growing as India is growing at 7 per cent, then you can expect the returns to be double,  that is 14-15 per cent on average. So I would say we can expect at least that kind of increase in the market, in the Indian market, because companies are doing very well in India. Many of them, of course, are growing more than that. And there'll be more IPOs, which will provide an opportunity for investors to get access to very, very good companies, companies that have good earnings potential and that are growing at a fast pace.

Bull Run In Markets Sustainable?

I believe so. I think you're going to continue to see a bull market not only next, this coming year, but for the next five, 10 years, the Indian market will continue to be good. Now, you must remember there are always corrections. You will have a Correction of maybe 10-15 per cent at any point in time for one reason rather. But this is a correction in an ongoing bull market.

On Trump Tariffs and Its Impact on India

Trump pledged tariffs will have a very beneficial impact on countries around the world. That's number one. Number two, his policy, of course, is to get a fairer deal in trade for the U.S, as many countries have violated the WTO mandates. And I believe Trump is now trying to change that to provide a fairer deal for the US and I believe that will also be very good for the world because you'll see a much more level playing field, let's put it that way. The other thing he will be doing is increasing oil production in America.

As you know, there are lots of reserves that need to be drilled, not only on the mainland but in Alaska. Alaska is a major oil producer and will become an even bigger oil producer going forward. That, of course, will be good for particularly emerging countries who are hungry for energy.

This is going to be a very good development. I believe that the Trump administration will be quite beneficial for India as well. And by the way, speaking of India, I believe that because of the tensions between the US and China, there'll be a swing, or there already is a swing towards India as the largest, most populous country in the world.

I Think American investors, American buyers, and American sellers will want to be doing more and more business in India and of course, that will be beneficial to the Indian economy.

Why Bullish On India's Growth Story?

Well, the growth story for India will continue to be very good. I believe that it will continue on this trajectory of high growth. Now the reason for that of course is not only the young population, not only the fact that the Modi administration has tried as much as possible to digitize the economy, which will be good.

But the entire tech sector is having a big, big impact on India. India already is a big exporter of software. But I believe going forward, India will become a big exporter and manufacturer of hardware, computer hardware, particularly semiconductors.

And that will be very beneficial for the Indian economy as well as the world economy. Up to now, high-end chips have been dominated by the likes of TSMC in Taiwan, Korea, the US, and China. But I believe India will be the next big player in that space which will be very good. It will provide a new leg of growth going forward.

On Why Mobius Has 50 Per cent of Tech Stocks In His Profile?

Well, tech companies are growing at such a rapid rate as a result of the Internet, as a result of a high, as a result of all these innovations, particularly in semiconductors. These companies are producing at a faster and faster rate and are growing at that rate.

We believe that the tech sector is a very exciting area to be in because it affects all industries and all sectors of life, not only in India but around the world. However, we are not wedded to tech. In other words, many, many other industries are doing very, very well, whether it be in the paper industry and garments, in textiles, in oil and gas and minerals, and so forth.

But generally speaking, we want to find companies that are using technology to increase their productivity, to increase their growth prospects. Right. And sir, one question that I want to ask you.

On Investing $100 Dollars Across Emerging Markets

Well, if we didn't have restrictions normally in our portfolio, we have restrictions on how much we could put in one country. With no restrictions, 50 per cent would go into India. But because of the necessity to diversify, I would say at this stage it would be 30 per cent of India, and 20 per cent Taiwan.

Then another 10 per cent in Korea, 10 per cent in Vietnam, 10 per cent in Turkey, 10 per cent in Brazil, and then the rest scattered in other parts of the world. 

On Top Five Sectors To Invest In

First of all, software. Second, hardware for electronics, which includes semiconductors. Thirdly, consumer goods, fast-moving consumer goods. Fourthly, the infrastructure area and finally housing because I believe the demand for housing in India will continue to grow at a fast pace.

On Having No Large Cap In The Portfolio

Well, we find that we are in a better position to perform if we find companies that not many people know about. In other words, they're undiscovered gems. And of course, if you have a large-cap company, normally a lot of brokers, a lot of people will be watching it, will be noticing that. So we would prefer to go into those companies that are not very well known, and not very much covered by brokers and other researchers.

So it's a good way to get some sort of advantage in the market.

On Gold Outperforming Stocks

I don't think gold will outperform the stocks, but I believe that gold will still be good and will be growing in value. And one of the reasons for that, of course, is there are more and more people that distrust currencies. One of the reasons why you've seen the growth in cryptocurrencies is that people see that as an alternative to the fiat currencies issued by central banks. You know, people realize now that one of the reasons why there's inflation is because there's been too much money printing. Now, the other aspect of this is the demand from countries that love gold.

And at the top of that list is India. Indian consumers love gold and Indian consumers are getting richer. So there's going to be more and more money going into gold going forward.

On Budget Wishlist

Well, I think that under the current administration, generally speaking, the budget has been very favorable for the economy. I would like to see more and more liberalization, and fewer and fewer rules and regulations to make it easier to do business and grow. By the way, that's probably one of the impacts of the Trump administration. As you know, one of the platforms that he has is to reduce the administrative burden imposed by the government and reduce the number of rules and regulations that restrict free enterprise.

Now, the degree to which the budget in India accomplishes that will be very, very good for the Indian economy.

On Nifty and Sensex Trajectory

Well, I would say that you're probably going to see about a 20% increase from where we are now for both of those indices. But it's a wild guess. No one knows. Okay. The last time when I interviewed you, you said that BSE is going to SENSEX and is going to touch 1 lakh. So do you still have that outlook that it's going to hit 1 lakh? Oh, definitely. It will happen. When is the question