(CNBC - TV 18) - "The markets will be very different in 2022." That is the message from market guru Mark Mobius. In an exclusive interaction with CNBC-TV18, the Founder of Mobius Capital Partners said "going back to basics will work in 2022".
Remarks from the veteran investor come as the markets around the globe entered 2022 amid concerns about the Omicron variant of COVID-19, rising interest rates and tightening of pandemic-era stimuli.
"As you know, we now have an incredible boom in these cryptocurrencies, which I believe will be in trouble this year as a result of rising interest rates. You must remember that the boom in cryptocurrencies and the boom in companies that have an idea but not making money will be over as interest rates rise," he said.
Mobius expects "a very interesting phenomenon" to take place where Bitcoin and other cryptocurrencies that saw a lot of the excitement and even non-earning stocks will all be in trouble. "I think we are going to have to be very careful in differentiating," he said.
Mobius said the US economy is performing well despite the COVID situation. "The American economy being the largest in the world, after China, is going to have a big impact on India and other countries around the world. So I think there's a positive view there, that will be very important," he elaborated.
Speaking on interest rates, Mobius said any increases will impact equities. "There is no question about it," he said. "If interest rates go up, a number of companies that are losing money, or are not making any money - as you know there are a lot of tech stocks that are listed are not really making money, are going to suffer I believe. And there's going to have to be concentration on those companies that have a solid balance sheet and have good earnings growth," he said.
Last month, the US central bank announced its decision to end its pandemic-era bond buys in March 2022 and pave the way for three quarter-percentage-point interest rate hikes by the end of the year. The Fed's move came as the US economy neared full employment and the central bank coped with a surge in inflation.
Also in December, the Bank of England became the first central bank among the world’s leading economies in the pandemic era to raise interest rates, in a bid to combat surging consumer prices.
Mobius sees high inflation going forward as the money supply remains strong. "Money printing in presses have been going at a very high rate. Money supply in America went up by 30 percent last year and a pullback on that, of course, will have a big impact," he added.
