Indian markets to give 15% return in 2011: Mark Mobius

Bullish on Indian stock markets, global investment guru Mark Mobius today said the market would give about 15% return to investors this year as well.

"The Indian stock market will probably perform as good if not better than last year," Mark Mobius, executive chairman of Templeton Emerging Markets Group, said here.

The benchmark indices of the domestic stock markets, Sensex and Nifty, appreciated by about 15% last year.

When it came to big names, Tata Group's Tata Motors turned out to be one of the best performers in 2010, by registering the highest rise of 75% among the 50 stocks that make up the Nifty index.

Mobius said there was a change in perception of risks of investing in emerging markets, as "emerging markets like India are in a bullish phase".

As far as long term investment outlook is concerned, Mobius believes India, because of its large youth population, has an edge over China.

"If you look at investment from a longer term point of view, the prospects in India are better as compared to China," he said.

Moreover, the trend of FII (Foreign Institutional Investor) money into emerging markets like India will continue this fiscal (2011-12), he said.

Foreign fund flows, including debt, into Indian capital market was to the tune of $39.4 billion, while equities alone attracted investment of $29.3 billion during 2010.

During the current year so far, foreign investors have parked $1.6 billion in both equities and debt market.

When asked about the sectors that one should invest in to get good returns from the stock market in India, Mobius said sectors like consumer and commodities were the best bet.

The consumer sector includes industries such as food producers, auto manufacturers, clothing companies, packaging producers and retailers.

On the performance of the greenback against other currencies, Mobius said the US dollar is "not a safe haven" as currencies have gotten strong against the US dollar.

While he was slightly overweight on Indian equities, Mobius said that "the Return on Assets (RoA) could actually get better".

However, he said there was a short term risk attached to investment in Indian market, as "there could be a slowdown in policy initiatives by the government", on various corruption cases (like 2G spectrum) coming to light.