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Market Eye
| Emerging markets will surpass previous highs: Mark Mobius | 09/10/2009 11:18:32 | MANILA: Investor Mark Mobius said he expects emerging markets to surpass previous Top five picks
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records, predicting a continued rally with “corrections along the way.”
“If the money supply keeps on growing, we will continue to see a bull market,” Mobius, who oversees about $25 billion as Templeton Asset Management’s Singapore-based executive chairman, said in an interview in Manila. “We are just halfway from where we were before and we will surpass previous highs.”
Emerging-market stocks rose to a 13-month high on Wednesday as investors sought higher-yielding assets on expectations of a global economic recovery. The MSCI Emerging Markets Index added 0.8% as of 11.52 am in London on Thursday.
“We will see a pretty fast pickup in earnings and that’s what markets are anticipating,” said Mobius, who spoke in an investors conference in Manila. He said he prefers consumer and commodities industries in emerging markets.
Apart from Brazil, Russia, India, and China, Pakistan and Turkey are “quite interesting now and we are adding to some of our holdings on a slight basis,” Mobius said. He said he is “bullish” on oil, driven by rising crude demand in China and India. He declined to name companies. The “secular bull market” that pushed emerging-nation equities to the highest level relative to developed world stocks in 15 years has further to run, Jonathan Garner, Morgan Stanley’s chief Asian and emerging-market strategist, said this week.
“Drivers of the emerging-market secular bull market that are intact are superior economic growth and superior profitability over the cycle,” Garner said.
Mobius said he remains “bullish” on Thailand even as he expects stocks in the Southeast Asian nation to “correct” because of valuations. Thailand, Taiwan and the Philippines are among countries in Asia that may benefit from the “ongoing recovery” in the global economy, he said.
Last month, Mobius said he was still buying Russian stocks including OAO Gazprom because the market, the best performer among major economies this year, remains relatively cheap. He also said then that he is adding to holdings in Hungary, the Czech Republic and Poland.
The investor said in August that markets are very bullish on expectations that governments will continue to pour funds into their economies. A cut in money supply and increase in initial share sales by companies will “temper” the rally in emerging-market stocks, he said on Thursday. | Market
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