Sensex At 1,00,000 In Next 5 Years! Fund Manager Mark Mobius Gives Compelling Reasons

Sensex, the 30-scrip main benchmark of the stock exchange, BSE has made a long journey from trading near 400 levels in mid-1986 to almost touching 68,000 levels in September 2023. As the saying goes, equity markets are jewels when it comes to grabbing long-term growth. Time after time, floating through momentary periods of shocks and twists, Sensex has touched spell-bounding milestones. It makes us wonder, what's the next best level for Sensex? In Mark Mobius' words, it would be an astonishing 1,00,000 mark in the next 5 years!

How and why? That's the main question, and the American-born German emerging markets fund manager explains the reason why Sensex would touch the 1 lakh milestone in the next five years. He said this in a conference organised by Morningstar in Mumbai on Tuesday.

According to Mobius, India, with its burgeoning potential, is the beacon of promise in the financial landscape.

In the conference, the founder of Mobius Capital Partners LLP, said, "The Sensex, currently standing at around 70,000, is poised to soar to new heights, with a target of 100,000 within the next five years." He added, "While market corrections and downturns are inevitable, they are not a source of concern but rather an opportunity. As the market fluctuates, it provides us with a chance to seize undervalued assets and conserve cash for strategic investments."

Sensex is currently at below the 64,000 mark. But that has not stopped the benchmark from being on the gaining side so far in 2023. Year-to-date, despite the market rout of 140 billion dollars in Adani shares, inflationary pressures, challenging macro conditions, multi-year high-interest rates and the latest elephant in the room geopolitical risks, Sensex has still recorded an upside of 2,465.02 points or 4.03%. At the start of January 2023, the Sensex was near 61,160 levels. Overall, in a year, Sensex jumped by 2,511.46 points or 4.11%, compared to 61,120 levels on November 1, 2022.

But the growth in 5 years of Sensex is overwhelming by a massive 28,621.16 points or 81.75%. Sensex was simply near 35,000 levels on November 1, 2018.

If we look into the current situation, Sensex has touched an intraday high of 63,896.05 on November 1, 2023. And if add the gains of 28,621 in 5 years (2018 to 2023), then Sensex is seen crossing 92,500 levels in the next 5 years. This is just an example, the potential rise in Sensex could be much higher.

For instance, Sensex touched a historic high of 67,927.23 on September 15, 2023, and this was higher by 29,836.59 points from the 38,090.64 level on September 14, 2018.

So, Sensex has the potential to reach the 1 lakh mark in the next 5 years since India is a well-poised and best-performing market compared to its counterparts in Emerging markets.

Mobius highlighted that India's dynamic and diverse economy is a testament to its strengths. Its linguistic and cultural diversity, which some may perceive as a weakness, is a formidable asset. The nation's creativity, driven by a tech-savvy, young population, is a force to be reckoned with.

He added, "As we look ahead, India's future is exceptionally promising. It is a land of opportunities and innovation, with the potential to play a pivotal role in the global financial arena."

In a world where technological expertise is the driver of growth, Mobius said, "India's vast population, with an average age of 27, positions it as a key player. This demographic dividend, combined with the country's enterprising spirit, makes India not only an exciting market but a beacon of hope in the ever-evolving financial landscape."

Today, he added, "companies thrive by harnessing technological expertise, regardless of their sector. The key to growth lies in their ability to leverage technology and demonstrate its transformative power. In this rapidly evolving landscape, a significant paradigm shift has occurred in mid-market investment, marking a stark contrast to the practices of thirty to forty years ago. This transformation is primarily attributed to the astounding impact of technology. The speed at which information flows and trades are executed has dramatically increased, and the accessibility to diverse markets has expanded exponentially."

Notably, as of October 31st, 2023 in FY24, the market cap of BSE-listed companies stood at over Rs 311.45 lakh crore, which is higher by Rs 53.25 lakh crore from a market cap of over Rs 258.19 lakh crore in the overall financial year FY23. The market cap is up by Rs 160.36 lakh crore from Rs 151.09 lakh crore by the end of 2018-19. Not just that, the m-cap of these BSE-listed firms has skyrocketed by an eye-bulging Rs 216.70 lakh crore from the m-cap of Rs 94.75 lakh crore seen in the financial year 2016-17.

In the realm of investment, Mobius finally said, "The acronym ESG, we have adjusted it to ESG+C; Environmental, Social, Governance, and Culture. It's a novel way of evaluating companies and mitigating risk. We've shifted our focus to partnering with firms that meet these ESGC criteria. These metrics offer a holistic view of a company's sustainability and its impact on society and culture. The integration of these considerations into our investment strategy reflects the evolving and forward-thinking nature of the financial industry in the digital age."

Sensex's all-time gains is an enormous 63,086.66 points or 11,245.19%. The benchmark was between 400 to 600 levels in 1986.

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