Emerging markets investing guru Mark Mobius said he likes Indian stocks even though Covid-19 cases in the country have surged, as “this is going to pass.”
India’s stock benchmark Nifty 50 has risen around 8.1% this year as of Tuesday’s close. The index has climbed despite the country reporting a resurgence in Covid infections over the past month.
The South Asian country was among Mobius’ favorite markets even before the pandemic. The investor, who is founding partner of Mobius Capital Partners, said it’s “quite amazing” that India’s Covid crisis has not affected the stock market much.
“But generally speaking, we know that this is going to pass, that people will get vaccinated and the (Covid case) numbers will come down,” Mobius told CNBC’s “Capital Connection” on Tuesday.
“And given that, it’s probably a good opportunity to buy,” he added.
Within India’s stock market, Mobius said he likes software companies, health-care stocks, as well as firms providing equipment and materials to infrastructure projects.
Commodities and cryptos
In the commodities space, Mobius said he continues to like gold. He added that he prefers holding physical gold to buying mining companies, many of which are “not that profitable.”
But the veteran investor said he’s “not that excited” about the oil sector. That’s because oil prices have had an “incredible run” as they recover from the pandemic crash and may not rise much more, he said.
“I think we’re probably where we should be, $60-$70 a barrel so we’re not going to see an incredible boom in oil companies,” said Mobius, adding that some firms could still be interesting, though he did not specify which ones.
Another investment that Mobius doesn’t like is cryptocurrency, which he called a “very risky area.”
The price of bitcoin has surged from below $30,000 at the end of 2020 to more than $43,000 on Wednesday.
Mobius said it’s difficult to predict the direction of cryptocurrency prices and questioned how easy it is to convert bitcoin and other cryptocurrencies into “real money” that people can spend. He also disagreed with suggestions that bitcoin could replace gold as a hedge against inflation.
“I can’t have a crypto ring whereas I can have a gold ring —that’s the real difference,” said Mobius.
“It’s a completely different situation and I don’t know understand why people say that bitcoin can be like gold, it’s completely different. Gold is gold and it’s something physical, whereas bitcoin is not.”