Stocks to Buy | Investing Insight: Mark Mobius’s take on Geopolitics, India, China and the road ahead

Mark Mobius in an interview to ET Now commended India for its effective handling of the recent tensions with Pakistan. However, he emphasized the need for continuous vigilance and military preparedness, as such conflicts may reoccur. He noted that lasting peace would only be possible if Pakistan undergoes substantial internal reform, a process he expects to take considerable time.

Mobius highlighted the complex and ongoing trade and political tensions between the US and China. He remarked that former President Trump often adjusts his policies based on market reactions. A core unresolved issue remains Taiwan, which Xi Jinping prioritizes. Mobius cautioned that despite agreements between the US and China, there remains uncertainty over China’s adherence to such deals.

Mobius expressed frustration over the lengthy regulatory procedures his new fund has faced while trying to enter the Indian market. Despite strong interest in investing, he pointed out that the bureaucratic obstacles—persisting for over three months—are discouraging. He urged India to liberalize investment norms to capitalize on the current opportunity to attract businesses moving away from China.

He reaffirmed his positive outlook on India and intends to increase exposure once regulatory issues are resolved. Sectors that particularly interest him include defence, due to increased geopolitical awareness; pharmaceuticals, which may benefit from US companies seeking cost-effective alternatives; and IT, which continues to show promise despite growth moderation.

Mobius confirmed holdings in companies such as APL Apollo, Persistent, Vodafone, and Waaree Renewables. He mentioned that his team is evaluating new opportunities, particularly within India’s deep technology sector. Although specific names were not disclosed, the focus remains on innovative companies with growth potential.

While Mobius acknowledges the strength and financial stability of Indian IT firms, he expressed concern over their slow growth rates, typically under 10%. Therefore, his preference is shifting toward emerging tech firms that are in early growth stages and demonstrate strong earnings per share (EPS) potential.

Despite attractive valuations, China is struggling to attract US investment. Mobius attributed this to US investors’ growing preference for domestic opportunities, especially in light of reforms initiated during Trump’s presidency. Among emerging markets, he positioned India as the most promising—provided it reduces red tape and facilitates smoother business operations.

Mobius noted that US markets have rebounded halfway from their previous lows. He believes there is still room for growth, especially for companies that are domestically focused and not reliant on global supply chains. This marks a shift from past trends, requiring investors to explore lesser-known domestic companies that were previously overlooked.

Although he maintains interest in Indian banks, including former holdings like HDFC Bank, Mobius stated that his immediate focus lies elsewhere. He prioritizes investment in the defence, pharmaceutical, and IT sectors, which he sees as more strategically positioned at this stage. Nonetheless, select opportunities in banking remain under consideration.