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Mobius: Hungary Will Not Default, Buy Stocks

By    |   Friday, 11 Jun 2010 10:20 AM

Hungary’s stock market plunge represents a buying opportunity since the nation isn’t going to default on its debt, says emerging market investing legend Mark Mobius.

“We’ve seen falls of 20 percent or more (in Hungary), and in that kind of scenario there are great opportunities to buy from a longer-range point of view,” Mobius, chairman of Templeton Asset Management told Bloomberg.

“Their numbers are not as bad as Greece.”

Last year, Greece’s debt totaled 86 percent of its GDP, while Hungary’s ratio was 59 percent.

Hungary’s stocks have dropped to a four-month low after officials in the new government said last week that the country may suffer a crisis just like Greece.

The comments didn’t worry Mobius.

“That was meant for domestic consumption, not for international consumption,” he said.

“They’re getting people ready for the hard times.”

Templeton is looking at Hungarian stocks closely, but Mobius declined to name any specific companies.

He did say that in emerging markets as a whole Templeton is buying commodity and consumer-related stocks, because that’s where the best long-term growth prospects lie.

Mobius also predicted that the global economy will avoid a double-dip recession.

As for Hungary, economists are cautiously optimistic about its new plan to cut the budget deficit.

"Now that we have these measures, they're likely to stabilize matters in the near term,” Neil Shearing of London-based Capital Economics, told The Associated Press.

“But the markets' attention will now turn to implementation."

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Hungary s stock market plunge represents a buying opportunity since the nation isn t going to default on its debt, says emerging market investing legend Mark Mobius. We ve seen falls of 20 percent or more (in Hungary), and in that kind of scenario there are great...
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Friday, 11 Jun 2010 10:20 AM
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