Mark Mobius turns bullish on Chinese stocks amid recent rally

“When you’re investing, you don’t want to step in front of a high speed train coming at you. So you step aside and let the train pass, let the market go down fast,” he said. “When it reaches the bottom, then you can begin to look — OK — now is the time to begin to look at the recovery.”

Bloomberg

The rose more than 30% between a low point in January and a top on May 20. The rally, driven by a volley of policies to tackle the country’s property crisis and stimulate consumer demand, has lost steam over the past week amid profit taking. Mobius predicts of 4% to 5% as he expects the weakening yuan to fuel the country’s exports.

India Preferred

Yet, when asked whether the Chinese stock market will outperform India’s, Mobius said, “not this year.” India is his preferred market and he remains “very bullish,” though he warned that those stocks have gone up a lot and there is a chance of a correction. The is up nearly 10% year-to-date.

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Mobius favors in China, including the so-called “” companies that work on the software for chips, and Chinese , some of which he says are “superior to Tesla.” He expects to continue performing well, and remains on .

He finds onshore-listed A shares more attractive than the H shares traded in Hong Kong, given that “the Shanghai market is deeper in terms of exposure to China itself.”

Mobius plans to launch a new emerging-market fund in September, with a minimum investment of $500,000. The fund will consist of 30 stocks globally and target high net-worth individuals.