(Reuters) - Veteran emerging markets fund manager Mark Mobius expects developing markets to outperform their developed counterparts in 2021 as lockdowns end by early next year and a COVID-19 vaccine becomes available.
Governments in developed countries won’t be able to continue supporting economies as they have in 2020, the founder of Mobius Capital Partners, told the Reuters Global Markets Forum from Dubai.
China is recovering well, Mobius said at the Reuters Global Investment Outlook Summit 2020, adding he also expected India to return quickly to its previous rapid growth.
“India and China are the big ones for us now, but a lot of these other countries like South Korea and Taiwan are very significant; and then if you go to Turkey and South Africa, prospects are very good in a year or two from now.”
Although he did not expect eveyone to get vaccinated immediately, Mobius said just the availability of a vaccine would have “an incredible psychological impact” and he believed 2021 would be very good economically.
“My advice to people is to be diversified,” he said, highlighting sectors such as crusies, travel and airlines that “have been completely bombed out”, but have strong balance sheets and access to finance.
Mobius said sectors, including healthcare and education, that use technology effectively will be among the best performing in 2021.
He also said technology infrustructure companies, such as semiconductors and chipmakers, would remain attractive because of further growth in cloud computing and demand for background instruments necessary for the expansion of the internet.
Mobius said sustainable investing, especially corporate governance, will become even more critical in the context of a post-pandemic recovery.
“When a company is faced with a COVID-19 downturn, the loyalty of (its) employees becomes much more important. Companies want to hang on to these employees even though they cannot pay them as much as previously, or even not at all,” he said.
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(This interview was conducted in the Reuters Global Markets Forum, a chat room hosted on the Refinitiv Messenger platform. Sign up here to join GMF: refini.tv/33uoFoQ)
Reporting by Divya Chowdhury in Mumbai; editing by Barbara Lewis
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