Global investor Mark Mobius expects Chinese stocks to rebound, aided by Russia invading Ukraine

Published Mon, Mar 7 20224:25 PM ESTUpdated Mon, Mar 7 20224:28 PM EST

Emerging markets investor Mark Mobius told CNBC on Monday he thinks Chinese stocks may ultimately benefit from Russia's invasion of Ukraine. "My guess is that as a result of what's happening in Europe, China will be a winner, because Russia will have to trade more with China. They'll have to depend on China more and more," he said on " The Exchange ." Chinese equities have been "very bad" over the past year, Mobius acknowledged, citing property companies' debt as one overhang on markets in the world's second-largest economy. The Chinese government last year also tightened its regulatory approach, causing some investors to ratchet up their concerns about investing in the country's stocks. But the founding partner of Mobius Capital Partners said he expects the Chinese market to rebound as the government lowers interest rates, funnels cash into infrastructure and fulfills its plans to achieve 5 or 6% economic growth. "I think this bear market we've seen in China won't last. There'll be opportunities in China, as well," he said. The global markets have been volatile as investors remain worried about Russia's invasion of Ukraine and the ripple effects on the global economy. Oil prices rose in Asia after U.S. Secretary of State Antony Blinken said Sunday the U.S. and its allies are considering stopping Russian oil and natural gas imports. China has said it will not participate in financial sanctions against Russia. Russia's stock market has been closed since Feb. 28, with the country's central bank expected to give an update next Wednesday. In the U.S., the New York Stock Exchange has since halted trading in several Russian ETFs while the S & P Dow Jones Indices said it is removing all stocks listed and/or domiciled in Russia from its indices. Mobius cautioned investors from purchasing Russian stocks for a while, once the market there reopens. "Even if you want to buy Russian stocks, who's going to hold it for you? None of the banks are going to be holding those stocks for you as a custodian. And how are you going to get the money out?" He said. "You just got to forget about Russia for, at least, maybe a year. It depends on what happens in Ukraine, but it doesn't look good. It's not a good idea to get into Russia now," he added. Mobius' other tips include investing in companies with little to no debt since many global central banks are expected to raise interest rates this year. Having a diversified portfolio is also key, he added. "What's happening now in Europe teaches a big lesson towards diversification. So those people who had money in Brazil, in South Africa, in parts of Asia, are doing fine and not being hurt so much," he said.

Mark Mobius, co-founder of Mobius Capital Partners.

Anjali Sundara | CNBC

Emerging markets investor Mark Mobius told CNBC on Monday he thinks Chinese stocks may ultimately benefit from Russia's invasion of Ukraine.

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Global investor Mark Mobius expects Chinese stocks to rebound, aided by Russia invading Ukraine

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