Emerging markets hotshot Mark Mobius sees tantalising investment opportunities in SA

EDINBURGH — Mark Mobius is one of the world’s most closely watched investment analysts. He focuses on countries that have been classed as emerging markets, though some – like China – have enjoyed high economic growth for a considerable period. Mobius reckons these markets are going to get worse before they get better, which in turn presents opportunities for bargain-hunters. South Africa is among the countries where Mobius sees opportunities. This is, no doubt, because President Cyril Ramaphosa is shaking rotten apples out of the government tree and is focused on improving the business and investment environment. Other countries that Mobius has identified as fertile hunting grounds for stock-pickers include India, China and Russia. – Jackie Cameron

By Abhishek Vishnoi

(Bloomberg) – Even the normally bullish Mark Mobius says there’s worse to come for emerging markets.

There’s a danger of contagion from the deteriorating situation in Turkey, and Argentina and Brazil aren’t doing well, said the veteran developing-nation investor, who left Franklin Templeton Investments earlier this year and set up Mobius Capital Partners LLP.

Mark Mobius poses for a photograph following a Bloomberg Television interview in London, on October 10, 2016. Photographer: Simon Dawson/Bloomberg

“We still could have some downside in the emerging markets,” Mobius said in a Bloomberg TV interview with Haslinda Amin and David Ingles. “But selectively, you have some good opportunities. Now would be a stock picker’s market.”

The MSCI Emerging Markets Index of shares has fallen around 11 percent from a 10-year high in late January as rising Treasury yields and the dollar sapped demand for riskier assets. Concerns over contagion risks are rising amid political woes that have sent the Turkish lira to a record low, while Argentina deals with its own challenges as the peso slides.

The lira tumbled as much as 5.2 percent against the dollar on Wednesday, a sign the central bank’s apparent refusal to raise rates is giving the market free rein to bet against it. Even Japanese margin traders, who until recently were doubling down on Turkey, have been cutting their losses.

Flag map of India

For Mobius, the declines are throwing up opportunities. Indian financial stocks look attractive as “the government has come in to bail out the banks,” and the nation “has done a terrific job on outsourcing,” making technology companies potential buys, he said. There may be investment opportunities in Chinese technology stocks if the correction deepens, he said, adding that Xiaomi Corp.’s planned initial public offering is “interesting.”

Here are other places Mobius finds opportunities:

South African firms are benefiting from reforms, while sanctions against Russia will lead to some good buys in the nation’s stock market; Malaysia stands to gain if the new government improves the rule of law and South Korea is getting a tailwind from improved relations with North Korea and also progress on corporate governance.

  • Mark Mobius, Ph.D., executive chairman of Templeton Emerging Markets Group: He has spent more than 40 years working in emerging markets all over the world. He joined Franklin Templeton in 1987 as president of the Templeton Emerging Markets Fund, Inc. He is the author of the following books: Trading with China; The Investor’s Guide to Emerging Markets; Mobius on Emerging Markets; Passport to Profits; Equities: An Introduction to the Core Concepts; Mutual Funds: An Introduction to the Core Concepts; Foreign Exchange: An Introduction to the Core Concepts; Bonds: An Introduction to the Core Concepts; The Little Book of Emerging Markets; and the subject of Mark Mobius – An Illustrated Biography. Dr. Mobius was named by Asiamoney magazine in 2006 as one of its “Top 100 Most Powerful and Influential People.”