(Bloomberg) -- Mark Mobius said Chinese shares are “looking good” as the recent rebound signals confidence, reversing a call he made in April for investors to avoid them.

The 87-year-old money manager turned bullish on Chinese equities about three to four weeks ago, when he saw a chance for recovery as the government rolled out measures to support the real estate sector. That was “a light at the end of the tunnel,” the co-founder of Mobius Capital Partners LLP said at a media roundtable in Hong Kong Thursday.

“When you’re investing, you don’t want to step in front of a high speed train coming at you. So you step aside and let the train pass, let the market go down fast,” he said. “When it reaches the bottom, then you can begin to look — OK — now is the time to begin to look at the recovery.”

The MSCI China Index rose more than 30% between a low point in January and a top on May 20. The rally, driven by a volley of policies to tackle the country’s property crisis and stimulate consumer demand, has lost steam over the past week amid profit taking. Mobius predicts economic growth of 4% to 5% as he expects the weakening yuan to fuel the country’s exports.

India Preferred

Yet, when asked whether the Chinese stock market will outperform India’s, Mobius said, “not this year.” India is his preferred market and he remains “very bullish,” though he warned that those stocks have gone up a lot and there is a chance of a correction. The MSCI India Index is up nearly 10% year-to-date.

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Mobius favors technology hardware companies in China, including the so-called “fabless” companies that work on the software for chips, and Chinese electric vehicle makers, some of which he says are “superior to Tesla.” He expects Taiwanese equities to continue performing well, and remains bullish on Taiwan Semiconductor Manufacturing Co. 

He finds onshore-listed A shares more attractive than the H shares traded in Hong Kong, given that “the Shanghai market is deeper in terms of exposure to China itself.” 

Mobius plans to launch a new emerging-market fund in September, with a minimum investment of $500,000. The fund will consist of 30 stocks globally and target high net-worth individuals.

--With assistance from Jeanny Yu.

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