ZLBT Chats

Wednesday, April 1, 2009

Mark Mobius Speaks

The next “bull-market” rally has begun and there are bargains in every emerging market following a record slump in stocks, Templeton Asset Management Ltd.’s Mark Mobius said.

The MSCI Emerging Markets Index has jumped 23% since reaching a four-year low on Oct 27 2008, outperforming the 2.5% drop in the MSCI World Index and 9.5% decline in the Standard & Poor’s 500 Index.
Emerging markets made up the 10 best-performing benchmark gauges this year (2009), led by the 26% gain for China ’s Shanghai Composite Index.
“You have to be careful not to miss the opportunity,” said Mobius, who helps oversee about US$20 billion of emerging- market assets as executive chairman at San Mateo , California- based Templeton. “With all the negative news, there is a tendency to hold back.”

Emerging markets are in “better shape” than developed economies, Mobius said. The fund is looking for companies that are “cash-rich,” have low debt and higher dividend yields, or those that can invest for future growth yet have cash left to pay shareholders, he said.

“You are going to see a lot of bouncing off the bottom because there’s a tremendous amount of uncertainty in the market,” Mobius said, “But I have a feeling we’re at the bottom and now (March 2009) we’re building a base for the next bull market.”

Mobius correctly predicted in December 2008 that emerging markets will rebound before developed nations.

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