Why Mark Mobius will be looking at largecaps going forward
Mark Mobius, Chairman, Mobius Emerging Opportunities Fund, says in India, he is going to be looking at largecaps going forward because some of these largecaps have lagged behind the smallcaps. Incredible growth has been seen in the mid and smallcaps and now it is time for some of these largecaps to catch up. The whole infrastructure sector is particularly interesting and in the power sector, hydro power should not be forgotten. NHPC could be making a very interesting entry into hydropower area. One of the most interesting aspects of these companies is that they are not only exposed to growth in India, but also growth globally.
What do you do about the valuations in the public sector entities because they have seen a massive re-rating in the last 12 months and in all certainty it seems like the current government is going to come back to power? Do you expect this momentum rally to continue or do you think the bulk of the rally and the value has already been tapped into?
Mark Mobius: There is no question that there will be a correction.
The market has gone up so far and so fast and for such a long time. We are due for a correction and a correction of 15% to 20% is normal. This may be on the back of the election.
If there is disappointment about what Modi's election results are, you may see a correction. But that does not deter from the overall growth that we are seeing in India and the recovery. So, if there is such a correction, it would be a great time to be buying.
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