Opening Up the Foreign Exchange Market

Mark Mobius

           Mark Mobius, a seasoned investor and founder of Mobius Capital Partners LLP, emphasizes the need for India to liberalize its foreign exchange market to attract more overseas funds. According to Mobius, allowing a free float of the rupee, similar to the system in the United States, would stimulate a significant influx of capital into the country. He argues that India, being a large and robust economy, can withstand such flows and should avoid stringent controls like China. Mobius believes that opening the market freely would not only attract institutional investors but also individual investors, including non-resident Indians (NRIs).

Mark Mobius​

India's Appeal for Long-Term Growth

Mark Mobius​ asserts that India, based on return on capital and earnings growth metrics, offers attractive valuations. He considers India to be a prime destination for long-term growth, supporting his conviction with a 20% allocation to India in his emerging markets fund. The combination of a young population and technological advancements positions India as a powerful force in terms of productivity enhancement. Mobius highlights the importance of embracing the psychology of open markets to encourage a robust inflow of investments.

Caution Regarding the Banking Sector

Expressing caution, Mark Mobius notes the opacity of the banking sector and the challenges in assessing the quality of banks. He points out the necessity of understanding lending practices and recipient companies to gauge the safety of investments. Due to this lack of transparency, Mobius personally steers clear of investments in banks.

Positive Outlook on Corporate Governance

Contrary to concerns about the banking sector, Mark Mobius​commends India for its corporate governance practices. He attributes this to the openness inherent in a democratic society. According to Mobius, Indian companies are transparent and forthcoming during visits, reflecting good corporate governance practices comparable to those in other parts of the world.

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