The executive chairman of Templeton Emerging Markets Group is confident that the domestic stock markets are going to scale higher peaks
Mark Mobius, the global investment guru and veteran emerging markets investor, believes that Indian markets would continue to do extremely well in the long term.
The executive chairman of Templeton Emerging Markets Group is confident that the domestic stock markets are going to scale higher peaks.
"The Sensex as you can see has been doing extremely well. The economy is doing very well. Interest rates are coming down," he said in an interview with Zee Business.
"Of course, whenever you have a bull market, you are going to have bumps along the way. But the Indian situation looks very positive. I think there is room for more aggressive rate cuts (by the central bank) in view of the very low inflation you are seeing in India."
He also advocated more aggressive privatisation of public sector units (PSUs). "The government has to move more aggressively on the privatisation of state-owned enterprises because one of the problems we are facing in India is the lack of stocks to buy. A lot of valuations of major companies have gone up. If you look at the average P/E, the Indian stocks tend to be higher than the emerging market average. So, I would like to see more privatisations, more shares issued in the Indian market so that we have more choices."
On the government move to reduce the government holding in PSU banks, Mobius doesn't mince words. "That will be a big thrust for the market. These (state-owned) banks are very big. They represent large market capitalisations. In fact, it will be a great positive for the government to now issue some of those stocks and reduce the government holdings because the valuations are very fair for the government to sell now. For investors, it gives an opportunity to have exposure to this high-growth economic situation you are seeing in India. So, it will be a win-win for everybody concerned I believe," he said.
On GST, he warned the government against the moves by state governments to raise taxes. "One of the main issues is the move by some states to add new taxes. Probably they are doing this to make up for any potential reduction in the income they get from the unified tax. So, I think this is one is self-defeating."
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