Famous investor Mark Mobius says that the impact of the fall in cryptocurrencies will be seen on other asset classes as well. In a conversation with CNBC-TV18, he discussed openly about the Indian Stock Markets to LIC’s IPO. Let us know what is his thinking about the Indian markets.
The problem, Mobius said, is that if cryptocurrency prices fall, it will affect other markets as well. He said that millions of people are feeling themselves rich by earning from crypto. So they will feel less rich if crypto continues to decline. Then, they will withdraw money from other markets. This is also one of the reasons why we are seeing a lot of volatility in all other markets.
Regarding the Indian stock markets, he said that the environment is looking a bit bad right now. The market may fall by another 10 per cent. But, this is just a guess. “I believe we are still in a long term bull market. It would be better to wait and have some cash on hand so that you can buy when the market turns down,” he said. He said that right now it is important that you invest in companies with good earning potential.
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Regarding the hike in global interest rates, Mobius said that the US central bank is a bit late in raising Federal Reserve interest. If inflation in the US exceeds 7 percent, the Federal Reserve may increase interest rates further, which can also affect the positive real interest getting to people. I don’t think the full effect of the Fed’s price hike has been on the markets. You can see further volatility and selloff.
Regarding India, he said that I am still very positive about India. There is an environment in which growth is very good and we India have to survive. More than 50 per cent of foreign investors are dependent on ETFs in India and that means they are following the index. We have to focus on those companies which have the ability to face ups and downs. Companies with low debt, good EPS growth and good return on capital should be on our radar.
Mobius also talked about LIC’s IPO. He said that it is good that the government is selling its stake in more public sector companies. This will strengthen the stock market and India will become an important market at the global level. As companies get listed in the stock market, the market capitalization of Indian markets will increase.
He said that it is true that LIC is a very big company. So I think big foreign investors will be compelled to invest in it, as it will later become part of larger indices. However, looking at the current market conditions, we feel that this IPO may not get the same response as it could have got in normal times.
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