India attractive after global sell-off: Mark Mobius

Mark Mobius (81), who retired from Franklin Templeton Investment last month, is starting a fund management firm which will invest in emerging and frontier market companies focused on environmental, social and governance issues. Photo: Aniruddha Chowdhury/Mint

Mumbai: Investment guru Mark Mobius, who retired last month from Franklin Templeton Investments after spending three decades there, is back to doing what he likes the best—managing emerging markets, this time, though, with governance in focus.

Mobius, one of the most prominent voices on emerging market investments, is starting a fund management firm which will invest in emerging and frontier market companies focused on environmental, social and governance (ESG) issues. 

“There is no plan to retire,” Mobius, 81, said at a media briefing in Mumbai. “I am starting a fund management company, and we are now applying for licences in London and Luxembourg. So, that’s coming down the road.” He added the fund will be an open-ended long-only one.

“The fund (will invest in) not only companies that are great in ESG, but also those that have the potential to improve their governance, and environment and social,” said Mobius, who last served as the executive chairman of Templeton Emerging Markets Group at Franklin Templeton Investments. 

Mobius was in Mumbai to announce his entry into the investment panel of city-based early-stage venture capital fund Equanimity Investments, in which he is an investor, along with managing partner Rajesh Sehgal. Equanimity is a sector-agnostic fund which uses technology to ensure scalability and sustainability of their business models.

“I have to say India,” Mobius said when asked which global markets were attractive after the recent correction.  “You look at the growth here, you look at the reforms here, there is a good opportunity for change,” added Mobius, who said that his favourite bets in India were banks that are able to embrace the new technology. 

However, Mobius gave a thumbs-down to the return of LTCG (long-term capital gains) tax. He said the re-introduction of LTCG tax was “definitely” hurting the sentiment of foreign investors. “If you sit in a jurisdiction that does not have a taxation treaty with India, then there is double taxation, and then, how do you keep count?” he said.

Mobius, who has earlier said that he has not invested in cryptocurrencies, warned of adverse impact on equity markets, too, if Bitcoin sees a huge crash. “When people ask about Bitcoins, I say sorry, can’t talk about religion in public. Crypto is making tulips look bad like the tulips mania in 1736. That could trigger a crisis.”

After hitting a peak of close to $20,000 in December, Bitcoin has corrected drastically and currently trades at $10,928. “Nobody knows how is much cryptocurrencies are out there. But the reality is that many people feel rich and have made money through cryptocurrencies. When people feel that way, there is more money and more credit in system which finds its way in stock markets. And that generates a bull market in every direction,” he said. 

“If this is withdrawn, there is a reduction in credit and a reduction in confidence. That could have an impact. Nobody knows how big the impact could be. There is one estimate that cryptocurrencies are about the same market cap as Microsoft,” he added.