Mark Mobius on why it’s not a good idea to invest in commodity stocks


NEW DELHI: Emerging market investment guru Mark Mobius on Wednesday said it was not a very good idea to be investing in commodity companies now. This is despite the fact that he believes commodity prices will continue to go up in the near future.

Instead, he advised investing in equity and companies with pricing power to tackle inflation.

Commodities have been the highlight sector of the last leg of the recent bull run, as they soared riding on high post pandemic demand. The prices of most commodities reached unprecedented levels.

The prices jumped further as a war broke out in Europe and Western countries followed with sanctions on Russia, which crippled the supply chain of many important commodities and foodgrains.

Mobius said despite heavy buying seen in the last few weeks, we are not at the peak of the bull market yet. “Point of euphoria is not here yet [but we] may get there in some time,” he added in an interview.

He advised one moving variable that investors should track is pace of technology adoption.

He also said the Indian government’s move to privatise public sector companies is excellent.

The government has intensified its efforts to offload stakes in many PSUs, though not much has bore fruit. Recently it managed to sell its stake in Air India, while it may soon bring the public offer of Life Insurance Corporation of India. However, stake sale plans in Bharat Petroleum, Shipping Corporation and Concor have been languishing for years.

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