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Mobius: Buy Latin America Commodity Producers

By Julie Crawshaw   |   Tuesday, 19 May 2009 09:43 AM

Shares of Latin American commodity producers are "attractive" investments and the region's banks are in "good shape" because they hold few bad loans, says Templeton Asset Management emerging market head Mark Mobius.

"Latin American banks have minimal exposure to the toxic assets that have plagued financial institutions elsewhere," Mobius told Bloomberg.

"They are in a strong position to benefit from a recovery in the global markets."

Mobius says emerging-market commodity companies should remain profitable despite declines in oil and metals prices last year, and that stocks may “break out” into a bull market at the end of the year as falling interest rates and easing inflation make equities more attractive.

BlackRock CIO Bob Doll expects emerging markets will gain an average of 20 percent this year as their economies rebound faster and stronger than those in developed markets.

“There are some that already have,” Doll told reporters in Singapore.

Though Doll still thinks the S&P may retreat from current levels before posting a gain of 11 percent for the year, he says the global economy has probably seen its worst in the past two quarters, with developing nations already starting to emerge from the recession.

“If in fact we have seen a bottom in markets and economies are going to recover, the emerging parts of the world will recover the most and the fastest,” he said.

“After all, their recessions were largely unwanted inventory build-up and not the credit bust in the Western world.”

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