‘Sensex will double over next five years’

MARK MOBIUS, executive chairman, Templeton Emerging Markets Group

MUMBAI: Mark Mobius, executive chairman of Templeton Emerging Markets Group at Franklin Templeton Investments, expects the Sensex to double over the next five years, on the back of economic growth, ongoing reforms and privatisation.

In his preferred list of emerging market stocks, India ranks second, after China. In an interview, Mobius expressed concerns over the bitcoin frenzy, and said he hasn’t invested in the cryptocurrency. He welcomed the plan to infuse capital into state-owned banks. Edited excerpts:

Where do you see Sensex in the long term? What is going to be the theme of the market over the next one year?

I think it could double over the next five years, driven by economic growth, reforms and privatisation. Economic growth and reforms will be the theme of the market for the next one year. I am very bullish on the consumption theme in India. People now have extra money to spend.

Where do Indian equity markets currently stand in your preference order among emerging markets?

India now is second after China, in terms of weighting, but we are overweight India. If you look at the GDP of India, it is around 20% of China. However, in terms of our weighting in terms of relationship with GDP, our weighting is more in India. One of the problems here is, the selection of stocks is limited to those that are liquid. If you have thousands of listings, but if they are not liquid, it is very difficult to buy.

China is at number one, because of the sheer size.

What do you make of the staterun banks’ recapitalisation programme? Are you looking at Indian staterun banks as an investment option?

Yes, definitely. In some cases, we have added state-owned banks. We are moving towards state-owned banks; as they have received recapitalisation, they are looking better. You have seen the way the market reacted positively too. This is going to be good, as this will improve the lending of these banks.

What are your thoughts on the mindboggling surge in bitcoin prices? Are you bullish on it or bearish?

Bitcoins are giving tulips a bad name. It reminds me of the tulip mania in 1600s.

One bulb was selling for a price of the house. People went nuts, and then there was a crash.

You asked me I am bullish or bearish – I am both. In one way, there is a need for a way to transmit value over the internet anonymously, quickly and efficiently.

Have you invested in bitcoins?

No.

Do you plan to invest?

No, but things can change.