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Saturday, May 21, 2022
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World markets seeing fund inflows after China clampdown

fund inflows

According to veteran investor Mark Mobius, the effects of China’s crackdown will be temporary and curb monopolistic trends over the long-term, enabling SME to thrive

India, the United States and parts of other emerging markets have seen fund inflows redirected from China as recent regulatory crackdowns in the world’s second-biggest economy have spooked markets, according to veteran investor Mark Mobius.

I would say half the money has just left. But I think that is temporary, it will not last, Mobius, emerging markets fund manager and founder of Mobius Capital Partners, told the Reuters Global Markets Forum (GMF) on Tuesday.

Mobius said his firm was “heavily concentrated in India”, with nearly a 20% allocation, adding that he was bullish on sectors ranging from medical testing to industrial equipment. It’s a pretty wide scope that we have in India. Lots of opportunities.

Mobius earlier made his name as an emerging markets guru with U.S. money manager Franklin Templeton, where he managed more than $50 billion in EM portfolios.

The effects of China’s crackdown will be temporary, and over the long-term, curb monopolistic trends enabling small- and medium-sized enterprises (SME) to thrive, said Mobius, whose firm manages more than $414 million in assets.

The unpredictability of China’s regulatory measures make the country unappealing to foreign investors in the short term but could make it attractive in the long run, global fund managers told GMF last week.

In China, Mobius was upbeat on medical equipment makers, healthcare, higher-level education companies that haven’t been impacted by the recent crackdowns, consumer products and fast food.

We feel that it’s good where we are, he said, adding that he would consider buying some stocks, especially in the SME segment, given the recent price corrections.

There are opportunities now in China as a result of this panic following the government intervention, Mobius said.

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