Mark Mobius, the founder of Mobius Capital Partners, said it is a big mistake to ignore China, and he is looking to invest in consumer-focused companies.
For example, he said, there is a rising number of middle-income people who are paying more attention to how they look, which was why he had invested in a beauty treatment firm in Hong Kong.
But companies in Taiwan, South Korea and India are still his biggest holdings, Mobius, dubbed the "Godfather of Emerging Markets," said at a forum in the SAR yesterday.
The price-to-earnings ratio is not his metric to value stocks but the return on equity as it reflects the nature of the business, he said, adding that his investment criteria include an ROE of at least 20 percent, a 50 percent debt-to-equity ratio, and 10 percent earnings growth.
Mobius admitted it is very difficult to find a company qualified for all of them. In fact, only four out of all the stocks listed in Hong Kong met the criteria, he said.
Mobius noted that it would be too expensive for an investor like him who usually holds companies for years before selling to hedge the currency risks.
So he preferred a "natural hedge." He bought a Turkish company earning US dollars while paying in Turkish lira amid an inflation crisis in the county.
Mark Mobuis
