Tags: Mobius | Russia | Iraq | invest

Templeton's Mark Mobius: Seek Opportunities in Russia, Iraq

By    |   Monday, 23 June 2014 12:31 PM

Where some may see danger and turmoil, emerging markets investor Mark Mobius sees opportunity.

Specifically, Russia and Iraq offer some good investment opportunities, the executive chairman of Templeton Emerging Markets Group tells CNBC.

Investors are still able to make money in Russian even though the ruble and Russian MICEX stock index have rebounded somewhat since plunging during the Ukraine crisis in March.

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"The Russian ruble is down against the U.S. dollar, so U.S. dollar investors have a good opportunity," he notes. "And the market has not done that well. There has been a little bit of a spurt, but there's lots of opportunities there."

Mobius cites increasing demand for Russian exports of nickel and palladium. In fact, Chinese demand for palladium "is going through the roof," he argues. "So there's lots of things there that we can look at."

Although casual observers may see turmoil in Iraq and shun investing there, Mobius points to oil drilling in the country's Kurdish region.

"It's true that Iraq has a problem, but if you look at the Kurdistan areas you'll see a lot of good things happening there, and drilling for oil is one of the most important things they're doing, and pumping that oil to Turkey and others parts of the world.

"You have to look again, even within a country like Iraq, at specific areas where there might be very good things happening."

Mobius is bullish on emerging markets in general. "We've had a very chequered history in the last three years, now things are looking better," he states. Reforms in China portend continued strong growth, and anti-government demonstrations in Brazil may lead to more business-friendly policies.

However, investors must look beyond the traditionally accepted emerging markets to frontier markets, Mobius adds. "Frontier markets have outperformed even emerging markets, generally. So the scope of our work has widened considerably over the past few years."

David Reid, co-manager of the BlackRock Emerging Europe investment trust, agrees with Mobius' assessment of Russian stocks. Their valuations "incredibly cheap," he tells The Telegraph.

However, instead of investing in oil and gas giants, Reid likes Russian technology firms like social network Mail.ru and Yandex, a search engine.

"One of the things the communists did get right was the good education system, particularly on the technical side," he says.

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Where some may see danger and turmoil, emerging markets investor Mark Mobius sees opportunity.
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Monday, 23 June 2014 12:31 PM
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