Tags: Mobius | emerging | markets | IMF

Templeton's Mobius: 'Attractive Valuations' Still Exist in Emerging Markets

By    |   Wednesday, 29 October 2014 02:21 PM

The International Monetary Fund (IMF)'s reduction of its forecast for world economic growth earlier this month wasn't enough to make Mark Mobius, executive chairman of Templeton Emerging Markets Group, turn against emerging markets.

The IMF lowered its estimate of 2014 global growth to 3.3 percent from a 3.7 percent forecast in April.

"It's important to remember that this is just one forecast, and it's also important to remember that not all emerging markets are the same," Mobius said in a commentary obtained by CNBC. "The IMF actually increased growth projections in some cases."

Among emerging markets, Brazil suffered the biggest cut in the IMF's growth outlook. It now expects the country's economy to expand only 0.3 percent this year, down from a forecast of 1.3 percent in July.

Mobius said he will be watching developments on the Ebola front.

"People are concerned about the spread of the Ebola virus impacting growth in some affected African nations going forward, which is something we will be watching," Mobius, who also manages an African equity fund, admitted.

But, "we continue to identify individual emerging market companies that we believe trade at relatively attractive valuations," he said. "Those are the fundamental facts we search for, while understanding that fears will always play a role in the market."

Emerging market stocks are rallying this week amid speculation the Federal Reserve won't raise interest rates for a long time.

"If the Fed is going to keep interest rates low, this tends to be helpful for emerging markets," David Kelly, chief global strategist at JPMorgan Funds, told Bloomberg.

"Chinese stocks in general are very cheap by historic standards. When stocks are as cheap, any good news will tend to cause a market rally, and that's what we are probably seeing."

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The International Monetary Fund (IMF)'s reduction of its forecast for world economic growth earlier this month wasn't enough to make Mark Mobius, executive chairman of Templeton Emerging Markets Group, turn against emerging markets.
Mobius, emerging, markets, IMF
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2014-21-29
Wednesday, 29 October 2014 02:21 PM
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