Mark Mobius: Tsunami Won’t Impact Emerging Markets

By on April 11, 2012

Mark Mobius - Franklin TempletonCNBC’s Becky Quick interviewed Mark Mobius this morning. Mobius is a global investor and emerging markets fund manager, and is considered to be one of the leaders in the industry as he has been involved in these markets for over 40 years (according to Wikipedia).

Quick questioned Mobius on whether this spring season was a tipping point for the markets like it had been in the past couple of years. Mobius responded that he believed we were in pretty good shape for the emerging markets which have outperformed other markets so far this year.

Mobius said China’s growth was so strong that they were finding it difficult to slow it down to a rate of 7.5%. Mobius added that emerging markets would be growing at an average rate of 5% and earnings would be coming through as a result of that.

Mobius said emerging markets growth would be strong because of their foreign reserves, which is much greater than that of the developed countries, and their debt/GDP, which is far lower.

Quick asked Mobius what the impact of quantitative easing’s end would be. Mobius indicated this would not be a problem unless central banks decided to contract, or “take money off the table, reducing the amount of money in circulation.” Mobius was doubtful this would happen.

Mobius said he believed Bernanke still had his “foot on the pedal” and was trying to see that unemployment comes down. This is true about the other countries in the world including the Europeans, the Chinese and the Japanese, who want to see good growth while remaining cautious about inflation, according to Mobius.

Asked by Quick to pick one emerging market where growth would be the fastest, Mobius mentioned Russia which has been beaten down. He added the valuations are very good and the political picture is getting better. After that he would pick China which is talking about boosting the ASEAN market to get money into the small investors in China, which would feed back into the Hong Kong, H share and red chips.

The interview continued with Mobius mentioning Thailand and Indonesia (both doing very well). Mobius commented on Singapore which was attracting money that traditionally has gone to Switzerland. With two huge new casinos, Singapore has been attracting a lot of tourism.

Regarding the recent tsunami warnings, Mobius said he wouldn’t do anything, but knew this was coming a few weeks ago because an expert at Singapore University had said the area on the west coast of Sumatra “was hot” so we can expect more and more of this.

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