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By Sonia Shenoy | Ekta Batra | Mangalam Maloo Feb 14, 2023 5:33:02 PM IST (Published)
In an interview with CNBC-TV18, Mark Mobius, Founder of Mobius Capital Partners expressed his cautiousness on Indian banking stocks due to the Adani issue and believes that a lot depends on how swiftly Adani can raise equity to pay off debts.
Mobius Capital Partners has been bullish on Indian equity markets and the excitement is increasing. However, the investment management company is cautious on Indian banking stocks.
In an interview with CNBC-TV18, Mark Mobius, Founder of Mobius Capital Partners expressed his cautiousness on Indian banking stocks due to the Adani issue and believes that a lot depends on how swiftly Adani can raise equity to pay off debts.
He said, “It is of a great concern and that is the reason why we have been cautious about banking stocks because we believe that probably a lot of things on their books would create bad numbers for the banks.”
Mobius also commented on the Adani's governance and mentioned that they could have done a better job. He further stated that the Hindenburg reported was already known by the market, and they do not touch companies with high debt.
“It also gives us warning that we have got to look at companies that have too much debt. And in our case, we will not touch a company that has a debt equity of over 50 percent,” he said.
Regarding the US economy, Mobius suggested that the Fed may want to keep the economy on an even keel till the elections are over. He also commented on the performance of gold, which is doing well on the back of buying by Russia and China. He highlighted that emerging markets like India are doing very well, and they are also getting energy cheaply from Russia.
However, Mobius also mentioned that the huge risk in the current scenario is China trying to take over Taiwan. The escalating tension between the two countries could have severe consequences on the global economy.
He said, “The big risk in East Asia, Taiwan, Korea, and those countries, is something happening in Taiwan with China trying to take over Taiwan in a military effort - that is a huge risk. I am not predicting that something will happen tomorrow, but that is a big risk. And in that case India begins to look very safe.”
For more details, watch the accompanying video