Templeton Asset Management Ltd.’s
Mark Mobius said he’s been buying stocks in Brazil, Russia, India and China in the past month and called the slump in emerging-economy shares a “correction” in a bull market.
“Despite the fact that a lot of people think that we are entering into a bear market, we don’t believe so,” Mobius, who oversees about $34 billion in emerging markets as Templeton Asset Management’s Singapore-based executive chairman, said in an interview yesterday in Cairo. “This is a correction in an ongoing bull market.”
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“When the time comes, emerging markets will recover faster and in a big way,” Mobius said. “We’ve been buying because we have had net flows into our funds. And most of the buying has been in the BRIC countries.”
‘Relatively Inexpensive’
Templeton has also been buying equities in other developing economies, including Dubai and Egypt. Mobius favors construction, telecommunications and consumer goods stocks in Egypt, he said. The firm hasn’t reduced holdings in South Korea because the companies it owns were “relatively inexpensive” when it purchased them and may benefit from international sales should South Korea’s economic rebound stall, Mobius said.
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Valuations on Kospi have dropped to 9.7 times estimated earnings, the lowest in Asia after Pakistan, according to data compiled by Bloomberg. Korean equities traded at a multiple of 16.1 a year ago. The gauge advanced 1.6 percent.
South Korea’s economy expanded 1.8 percent in the first quarter on stronger overseas sales and domestic spending and the Bank of Korea forecasts 2010 growth of 5.2 percent.
May 27, 2010 10:12 EDT
Mobius Buys BRIC Stocks, Sees Bull Market Continuing (Update3) - Bloomberg.com