More by the Same Author
2013-05-16 Investors Living in Emerging Markets are a Bullish Bunch! by Mark Mobius of Franklin Templeton Investments
Part of my job involves putting myself out on a limb at times, and I have taken the risk of being subject to contrary (sometimes enthusiastically so) viewpoints. I’ve even been accused of being too optimistic about emerging markets, perhaps partly because my views often represent a stark contrast to dramatic news headlines. So when I took a look at the findings of Franklin Templeton Investments’ 2013 Global Investor Sentiment Survey (GISS),1 I was pleased to discover my longstanding optimism about emerging markets seems to be spreading among investors.
2013-05-09 China's Building, but Will They Come? Ghost Cities by Mark Mobius of Franklin Templeton Investments
Some of you may have heard or read about the current state of the real estate market in China, often covered in a sensationalistic way, with talk of “ghost cities” and “bubbles” ready to burst and so forth. These types of reports can cause quite a jolt in the market, which is what we saw happen, probably not coincidentally, after a popular US television newsmagazine aired a somewhat negative report in March. But as I’ve said many times before, there’s often more to a story; important parts can end up on the cutting room floor.
2013-04-24 Growth From the Ground up in Iskandar by Mark Mobius of Franklin Templeton Investments
Our emerging markets team isn’t too keen on following crowds. Part and parcel of Templeton’s contrarian approach is traveling to places others aren’t, and thinking about the long-term potential in specific industries and companies that may not be on others’ radar screens. One place we’ve had our eye on for several years now is Iskandar, Malaysia, which has recently been attracting more investor attention. I think it could be viewed as an example of the potential we see in Southeast Asia.
2013-04-05 Dodging Soccer Balls and Sharks in Recife, Brazil by Mark Mobius of Franklin Templeton Investments
Recife, in Brazil’s northeast Pernambuco state, is known to many as the “Venice of Brazil” given its many waterways and bridges. A welcome winter stop for our emerging markets team, the city is blessed with a tropical climate that’s as warm and sunny as its people. While the residents in this area of Brazil are often regarded as being extremely laid back given the balmy weather, we found them to be very hard workers. We found this seaside and shipping hub was not only a hotbed of tourist activity, but of potential investment opportunities as well.
2013-04-01 The Discipline of Buy and Sell Decisions by Mark Mobius of Franklin Templeton Investments
The thought of giving up a once-treasured possession can be an emotional exercise for anyone, even if the object of affection has outlived its use. As investors, we can find it difficult to sell a once-favored holding even more difficult than the decision to purchase it. But sometimes, you just have to let go.
2013-02-15 Thailand: Land of the Smiles by Mark Mobius of Franklin Templeton Investments
China and India may be Asia's largest economies, but they aren't the only countries with growth potential on the continent. Southeast Asian countries can also offer compelling investment opportunities. Thailand, known as the land of the smiles because of the expression its natural beauty and friendly people inspire, is a country where we believe the economic prospects could give investors reasons to smile too.
2013-02-07 Commodities: Correlating Trends with Opportunities by Mark Mobius of Franklin Templeton Investments
Commodity price inflation is both a social and an economic issue. In emerging markets in particular, food and energy costs take a deeper slice out of consumers' income, which can lead to the type of unrest that causes governments to topple. In addition to the potential impact of extreme weather on food supplies, central banks around the world are printing a flood of money, which could lead to inflated prices for other goods and services.
2013-01-31 China's Market Ups and Downs by Mark Mobius of Franklin Templeton Investments
China's stock market was a roller coaster in 2012, and those investors with a weak stomach for unpredictability probably found the ride unpleasant. Its true that by many measures last year's weak market performance in China's A share market was disappointing, but in a market of this size the story isn't all good or all bad, so unlike the market masses, I remain confident about China's prospects and continue to search for long-term investment opportunities in China.
2013-01-17 Investing in Africa: Misconceptions and Realities by Mark Mobius of Franklin Templeton Investments
It's easy to fall prey to misconceptions and generalizations about places we've never been: to assume everyone in the United States drives big cars, all the French love croissants and all Canadians play hockey. There are many misconceptions about investing in developing markets, and Africa certainly has its fair share, but it's dangerous to make sweeping generalizations.
2013-01-11 On the Road in India by Mark Mobius of Franklin Templeton Investments
India appears to be on its way to becoming a major market for motor vehicles. Annual car and truck sales currently in India are roughly one third of the 15 million units produced in the U.S., but the pace of growth has been high. The total population of registered motor vehicles in India numbered more than 100 million in 2008- 2009, with consumer vehicles (passenger cars, motorcycles and scooters) accounting for about 4/5 of the total.
2013-01-04 Ring in the New by Mark Mobius of Franklin Templeton Investments
The "year of the dragon" in 2012 certainly didnt disappoint, as the global markets battled one financial dragon after another. From the Eurozone's sovereign debt crisis to persistently high unemployment in the U.S. and a mayday call from many who worried that China's growth rate was headed for a "hard landing," 2012 certainly was interesting. As we turn the calendar page to 2013, the Eurozone seems to be in less-critical condition and China's economic growth still appears to be flying but as of this writing, the U.S. debt problems still haven't been solved.
2012-12-21 Egypt's Arab Winter by Mark Mobius of Franklin Templeton Investments
It's been almost two years since the "Arab Spring" swept North Africa and the Middle East, and with it, grand hopes for change. Sometimes, change doesn't happen as quickly as the people would like, and oftentimes it can be a messy process. That is certainly true in Egypt right now, a country that is still in the throes of shaping its future. The ousting of Hosni Mubarak in 2011 didn't instantly transform the nation into a model of democracy, and the country is currently deliberating the best way forward via public debates, protests and the election process.
2012-12-13 Will China's New Leaders Rise to Reform? by Mark Mobius of Franklin Templeton Investments
While the uncertainty wrought by the election process in democratic countries may be largely absent in China, the country's gradual transition to new leadership and the likely new course for the country over the next decade still raises questions. In March 2013, the National People's Congress, China's parliament and highest state body, intends to formally usher in China's leadership, and some members of the "old guard" are retiring. Will China's new leaders continue to reform the economy, moving it toward a domestic consumption model, and still be able to maintain enviable growth rates?
2012-11-26 Fiscal Cliff: An Emerging Markets' View by Mark Mobius of Franklin Templeton Investments
Now that the U.S. presidential election is over and President Barack Obama has been re-elected to serve a second four-year term, we're able to do what we always do after a major election or regime change, and that's examine the potential implications of policy changes on our investments. As our team sees it, there are two main factors for global investors to consider: the U.S. economy's future health, and President Obama's foreign policy stance toward key countries, particularly China.
2012-11-15 Russia and China's Neighborly Interests by Mark Mobius of Franklin Templeton Investments
Whether our neighbors are as close as the airplane seat next to us or across a national border, most would probably agree that while we may not see eye to eye, peaceful cooperation makes more sense than tense relations. China and Russia share some 4,000 miles of common border, and their neighborly relationship has certainly had some ups and downs. But it's clear to me that the opportunities for cooperation between these two nations have enormous potential mutual benefits, particularly in the trade of natural resources.
2012-11-02 World's Economies Come of Age by Mark Mobius of Franklin Templeton Investments
As we grow and age, our needs and habits often change. The same is true of economies, which grow and change along with their people. Short-term statistics that impact a country's economic growth rate, such as consumer spending, exports and the like are certainly important, but there are also long-term shifts that can have significant economic implications for the future. Changing demographics is one of them. As a long-term investor, I have to look not only at today's opportunities, but also plan for tomorrow's developments.
2012-10-26 Will South Africa's Struggles Overshadow its Potential? by Mark Mobius of Franklin Templeton Investments
Africa is a continent many investors bypass, but from my perspective as a long-term investor, I think that's a mistake. South Africa has faced some struggles recently, but I think they can be overcome, and a brighter future could be ahead there for its people. South Africa is the largest economy in Africa, and is the only country on the continent where I think the "frontier" market label doesn't apply. Some have added an "S" to the end of the "BRIC" acronym to include South Africa in the grouping of emerging market economies of Brazil, Russia, India and China.
2012-10-25 Renminbi on the International Stage by Mark Mobius of Franklin Templeton Investments
For more than a decade, China's currency, the Renminbi (RMB), had been on a path of appreciation, but some weakness this year generated renewed talk about whether the currency is fairly valued against global currencies. As global equity investors, we are constantly faced with currency changes. This is an important factor when considering our investments, because currency movements impact companies' earnings and operations.
2012-10-16 The ABCs of China's Share Markets by Mark Mobius of Franklin Templeton Investments
A shares, B shares, H shares. Chinese equity listings can be confusing to global investors. I'm often asked what I think about a particular share market in China, why one is outperforming others, and which to invest in. I can't tell you what to invest in, but I can give you some information which I hope will help you discern what choices make sense for you.
2012-10-10 Will South Africas Struggles Overshadow its Potential? by Mark Mobius of Franklin Templeton Investments
Africa is a continent many investors bypass, but from my perspective as a long-term investor, I think that's a mistake. South Africa has faced some struggles recently, but I think they can be overcome, and a brighter future could be ahead there for its people. South Africa is the largest economy in Africa, and is the only country on the continent where I think the "frontier" market label doesn't apply. Some have added an "S" to the end of the "BRIC" acronym to include South Africa in the grouping of emerging market economies of Brazil, Russia, India and China.
2012-10-04 Priming the Liquidity Pump by Mark Mobius of Franklin Templeton Investments
The global economy is often like a line of dominos. One piece tumbles, causing others to fall too. This year, weak economic growth and heavy debt burdens in many developed markets had a domino effect on emerging economies, and many investors lost confidence in both. In response, central banks have taken actions to boost economic growth and prime the liquidity pump.
2012-09-26 Are BRICs Hitting a Growth Wall? by Mark Mobius of Franklin Templeton Investments
A global pattern of easing economic growth in the first half of 2012 has impacted the "BRIC" nations Brazil, Russia, India and China. However, I don't think the BRIC economies have hit a brick wall. While some market participants have been waiting impatiently for governments to undertake further stimulus measures, others have wondered whether something more fundamentaland less within governmental controlmight be at work.
2012-09-19 Power Struggles and Progress in Romania by Mark Mobius of Franklin Templeton Investments
Bordering the Black Sea in Southeastern Europe, Romania offers visitors a variety of beautiful and dramatic landscapes concentrated in a relatively small land area, including modern cities and medieval villages, sweeping mountain vistas, broad plains and sandy beaches. Romania may also be one of the more attractive investment destinations in emerging Europe today, but its political environment has been characterized by some power struggles as dramatic as its scenic views.
2012-08-29 The Russian Evolution by Mark Mobius of Franklin Templeton
It might be tempting to say "everything old is new again" in Russia, given the return of Vladimir Putin to the presidency after a four-year hiatus, an interesting development in the country's political evolution. I think Russia has also evolved a great deal as an investment destination in the past two decades and holds great potential, although there is still more work to be done to open the markets and instill investor confidence.
2012-08-23 The Emerging Story in Europe by Mark Mobius of Franklin Templeton
There's a unique and often overlooked story coming out of some of Europe's emerging markets that interests me more. While much of developed Europe is still struggling to get its fiscal house in order, much of emerging Europe already has. Some of the emerging markets in Europe deserve to be a greater part of the European story, and in my view, can offer compelling investment opportunities at attractive valuations.
2012-08-09 Viva Reforma en Mxico by Mark Mobius of Franklin Templeton
Elections come and go, but the real test of a candidate might be whether the promises made on the campaign trail are actually put into place. Enrique Pea Nieto and his Institutional Revolutionary Party (PRI) emerged victorious in Mexico's July 1 presidential election on the promise of reform and the end to old, "undemocratic" ways.
2012-08-01 China's Growing Pains by Mark Mobius of Franklin Templeton Investments
Many feel that China is the engine for the world economy and that if it slows down, we may be doomed to a recession or even a depression. Yes, China's growth is decelerating from the double-digits of recent years; various forecasters are predicting a possible GDP growth range of 7-8% this year. However, I think it's important to emphasize that would still represent an impressive pace, and remember that China isn't the world economy's only locomotive.
2012-07-25 An Attractive Destination for Holidays, and IPOs by Mark Mobius of Franklin Templeton
Many Western investors would likely have little trouble naming this years biggest initial public offering in the U.S., but they probably dont know that two of the top three global IPOs so far this year have been in an island nation probably better known as a holiday destination than an investment one. That country is Malaysia, where an interesting story has been unfolding in the IPO market.
2012-07-18 Readers Questions Answered by Mark Mobius of Franklin Templeton Investments
People who follow me know that one of my favorite things to do to really get to know a city is to walk or cycle the streets and interact with the locals. The great questions you readers submit are kind of like a digital version of that experience, providing me with invaluable perspectives and ideas from around the world. Thank you! Please read on for my answers to a few of your recent questions.
2012-07-11 China Fueling Auto Sales by Mark Mobius of Franklin Templeton
The picture postcard image many western travelers may have of Chinas city streets is one besieged with bicycles and empty of cars, but China is no longer pedaling its way into the futureits firmly in the drivers seat as autos rapidly replace human-powered transit. Motor vehicle sales have been booming in China, a reflection of the growing middle class. In 2009, car sales in China exceeded those in the United States, and in 2011, China led world auto production at 18.4 million units.
2012-07-03 The Next Frontier by Mark Mobius of Franklin Templeton
In a recent interview, I was asked whether I was becoming a frontiersman in my quest for the next big investment opportunity. Its true that many of my recent investment adventures have taken place in frontier markets the smaller, less-developed cousins of the emerging markets.
2012-06-27 Long-Term Investing in a Short-Term World by Mark Mobius of Franklin Templeton
In this electronic age, news and rumors can spread like wildfire across the globe, heightening market volatility as markets react in real time. It can be difficult for investors to see the forest for the trees as they try to dodge the downdrafts immediately in front of them, sometimes making hasty missteps.
2012-06-22 Abandon the Panic, Not the Eurozone by Mark Mobius of Franklin Templeton
I truly believe it pays to be an optimist in life. As a long-term investor, its practically part of the job description. You can fearfully view a crisis as a time of loss and peril, or you can choose to view it as a time of opportunity with potential for positive change. The Eurozone crisis has triggered a ripple effect across global markets, and many investors are expressing pessimism about the economic health and sustainability of the region. Me? Im an optimist.
2012-06-19 The R Word in Emerging Markets by Mark Mobius of Franklin Templeton
No matter what decision we face in our lives, there is always some type of risk involved. But when you take a few risks, the experience can often be quite rewarding. When it comes to investing, some risks are present no matter what market youre in. Its also true that there are risks that are especially important to consider when it comes to the emerging markets.
2012-06-14 The Pitfalls of Protectionism by Mark Mobius of Franklin Templeton
Free, fair and open trade is essential to fostering a thriving global economy. In the past, when economic conditions have deteriorated, weve seen governments in developed and emerging economies alike engage in protectionist policies. With growth in many countries slowing this year (tied in part to the crisis in the Eurozone), Im concerned that protectionism could be on rise. In the end, I believe these policies dont really protect anyone.
2012-06-07 Real Challenges in Brazil by Mark Mobius of Franklin Templeton
Brazil, the B in the emerging markets entities known as the BRIC countries (Brazil, Russia, India, China), has entered what I think can fairly be described as a rough patch of sluggish growth. Since my last update on Brazil, the country has experienced heightened economic challenges that threaten its competitive position to slip. In 2011, Brazils growth eased to 2.7% after having reached 7.5% in 2010.1 The Eurozone crisis and the impact of a stronger Real on the competitiveness of Brazilian industry are partially to blame for this growth slowdown.
2012-05-31 The Sense and Sensibility of Global Investors by Mark Mobius of Franklin Templeton
The worlds financial markets are like a spiders web; inter-linked and highly connected, strong and flexible, but sometimes fragile, too. The global financial markets have gone through rapid change in the last ten years. Large, emerging economies such as China and India have increased their contribution to global GDP and become true global powers1, causing individuals perceptions of the global economy to shift, as well. Perception has the tendency to impact market reality, which is why I was intrigued to see the results of our 2012 Global Investor Sentiment Survey.
2012-05-24 Reform in India: A Work in Progress by Mark Mobius of Franklin Templeton
The global investment community has been up in arms (and rightly so) about the Indian governments attempt to address possible past tax evasion through retroactive tax measures. Many investors started to express their disapproval by withdrawing their dollars, and amid the pressure, the Indian Finance Ministry decided to hold off on enacting the general anti-avoidance rule (GAAR) for a year. I believe this is a step in a positive direction, although the debate has simply been delayed and not completely resolved. And, retroactive capital gains taxes are still on the table.
2012-05-16 Africa: Investing in the Cradle of Civilization, Part 3: Ghanas Golden Opportunties by Mark Mobius of Franklin Templeton
This year could prove an interesting one for Africas west coastal country, Ghana. Presidential and parliamentary elections are slated to be held by year-end, the results of which are almost sure to impact the shape of the countrys future. President John Atta Mills has stated in the press that he will take all necessary constitutional steps to ensure the conduct of free, fair and transparent elections. Im encouraged by the economys 14% growth in 2011 (thats faster than China!), and would be pleased to see evidence of more positive momentum.
2012-05-05 Africa: Investing in the Cradle of Civilization: Part 1 by Mark Mobius of Franklin Templeton
Africa is widely regarded as the cradle of civilization. Building on its storied history as the bedrock for humankind, Africa is also a continent of ample investment opportunity, provided you have the resolve to be in it for the long haul. My team and I look at Africa as two parts: (1) sub-Saharan Africa where South Africa and Nigeria dominate and (2) the North African markets, where Egypt is the largest. Of course the South African market is much larger and more developed than the other markets in sub-Saharan Africa.
2012-05-02 Chinas Landing Pattern by Mark Mobius of Franklin Templeton
Our main investment themes in general have been focused on consumers and commodities. It is our belief that Chinese consumers are likely to continue gaining clout, and Chinese macroeconomic policy has increasingly been moving from an export-based model to one fueled by domestic demand. We also expect that demand for hard and soft commodities should remain strong as China and many other emerging markets industrialize, gain wealth and increase spending on infrastructure, which tends to tilt the balance between supply and demand in favor of producers.
2012-04-26 Myanmar: Opening the Door to Democracy by Mark Mobius of Franklin Templeton
As I have always maintained that with opportunities come risks. Myanmar is no exception. At this moment there is a lot of euphoria and excitement about the possibilities, but investors should try to avoid getting caught up in emotion. Its important to realize that the development of capital markets (bonds and stocks) takes time. One should be cautious about potential over-speculation, which tends to run high in the early stages of development. Investors often try to rush in early and can potentially push the price of stocks too high, which can in turn make valuations expensive.
2012-04-25 Readers Questions Answered Part IX by Mark Mobius of Franklin Templeton
I agree with your outlook on the emerging economies. My concern is the Eurozone, where there is political and currency instability. There is talk that one or more countries may leave the Eurozone. This could be a shock to the financial world, affecting currencies, and banks with exposure may tumble. How would you assess this risk? I believe the Europeans are on the right track and are addressing the fiscal issues facing not only Greece, but other countries in the Eurozone. Ultimately, these are issues impacting all developed countries, includng the U.S. and Japan.
2012-04-18 Emerging Market Brands: From Backstage to Center Stage by Mark Mobius of Franklin Templeton
If the growth of the emerging market consumer class persists, it should translate into more clout for local consumer brands. The global emerging markets middle class is anticipated to grow from 430 million in 2000 to 1.2 billion by 2030.3 By some estimates, China and India are expected to account for two-thirds of the expansion in emerging markets.2 Its not a given, but such a large group of people with diverse tastes in consumer goods could be a boon to emerging brands over the long term.
2012-04-11 A Balancing Act by Mark Mobius of Franklin Templeton
The balancing act between inflation and growth that economies often face is perhaps even more pronounced in the emerging markets world: stimulate growth too much, and inflation could flare, but stamp out inflation too hard, and growth could freeze. The fire of inflation seems to have moderated and some central banks have taken actions to stimulate growth. I believe the fundamentals in many emerging markets look supportive of these actionsas long as it doesnt tip out of balance. Inflation is a big challenge, and I believe it will probably be a very important consideration going forward.
2012-03-30 Singapore Gateway to Southeast Asia by Mark Mobius of Franklin Templeton
Viewing the region from the now 20-year old seat of our Singapore office, what we see in Southeast Asia is a generally favorable combination of rising per-capita incomes and a relatively young population, a recipe with the potential to fuel the appetite for a wide variety of consumer goods. The challenges Southeast Asian markets face must not be easily dismissed, but overall I am optimistic about the regions long-term growth potential.
2012-03-19 Readers Questions Answered Part IX by Mark Mobius of Franklin Templeton
It doesnt make sense for any of the countries in the Eurozone to leave the Euro. Moving into another currency does not solve any problems. Thats why Im baffled when people say a particular country should leave the Eurozone. As I see it, the choice to exit a currency is not made by the government, its a choice made by the people. The good news is that the Europeans, in addition to providing more liquidity, are striving to get to the core of the problem by trying to impose fiscal discipline. For this reason, I think the outcome should be positive in the long term.
2012-03-08 Putting Colombia on the Global Investment Map by Mark Mobius of Franklin Templeton
Colombias real GDP is projected to grow by between 5% and 6% by end 2011, and inflation to end 2011 at less than 4%. The primary caveat: lack of infrastructure remains one of the main challenges for the country; past guerrilla conflicts made large parts of the country inaccessible, a hurdle the country has not quite yet overcome. However, as security has improved, the central government has gained more access to the countryside, enabling it to make some progress on infrastructure improvements.
2012-02-29 Capitalizing on Cambodia by Mark Mobius of Franklin Templeton
Cambodia has been making strides into the capital market arena. The government has been encouraging foreign and local investment. Eventually, the local capital market should follow suit. The Cambodia Securities Exchange opened last year, making it one of the last Southeast Asian nations to open a stock exchange. Neighboring Laos opened its bourse in January 2011 and Vietnams exchange has been operating since 2000. 3 Though the Cambodian exchange has no stocks listed as I write this, the plan is to have state-owned companies in utilities, telecoms and portsto be listed.
2012-02-07 Order and Progress on the Rise in Brazil by Mark Mobius of Franklin Templeton
My worldwide pursuit of good investing bargains takes me to some magnificent countries. In my view, Brazil is certainly among the most beautiful and economically vibrant in the western hemisphere. Its Portuguese-speaking multiracial population of almost 200 million1 represents a growing and upwardly mobile consumer market. Brazil is the fifth most populated country in the world and is chock-full of natural resources and rich farmland. Appropriately, the countrys name comes from the wood that grows along the coast, which was greatly valued by the European textile industry.
2012-01-25 Rise of the Dragon by Mark Mobius of Franklin Templeton
With the debt situation in Europe continuing to further unravel and dim economic prospects in the U.S., many have come to believe that the star of the dragon descendants has the potential to rise even further in the coming years. Chinas GDP growth is expected to moderate to around 8.2% in 2012, which is high compared to developed economies. In this highly connected world, China is unlikely to be immune to the global slowdown, but I believe the Chinese government will utilize their substantial reserves and banking system to stimulate the domestic economy, as they did in 2009.
2012-01-13 The Year that Was and The Year to Come by Mark Mobius of Franklin Templeton
From a long-term perspective, we continue to have a positive outlook on emerging economies. In our opinion, balancing growth, inflation and global competitiveness will be the task ahead for many emerging countries in the months to come. We believe that emerging stock markets could be much larger than they are today, and over the long term, their combined value could potentially exceed the combined value of the U.S., Japanese and European equity markets.
2012-01-06 Pioneering Frontier Markets by Mark Mobius of Franklin Templeton
While emerging markets were considered a niche or exotic investment when I started investing in the late 1980s, many investors are now familiar with them and Im seeing more and more investors turning to emerging markets as a way to diversify their portfolios. Yet, emerging markets themselves are not a homogeneous zone. Within the emerging markets universe, we believe frontier markets as a whole have begun to take an impressive lead in terms of growth.
2011-12-22 Update on Korean Peninsula by Mark Mobius of Franklin Templeton
The death of North Korean leader Kim Jong-il, escalated the uncertainty surrounding the regime change in Korea, which was preparing for a leadership transition in 2012. Little is known about Kim Jong-un, the young man who is taking on the role of dynastic head. Some analysts feel that the death of Kim Jong-il increases the risks and uncertainties from the secretive Pyongyang regime, which has consequences for security on the Korean peninsula and beyond. South Korea and Japan are most immediately threatened, but China and the U.S. are also deeply involved with stakes in North Koreas future.
2011-12-19 Emerging Markets: Yesterday, Today and Tomorrow by Mark Mobius of Franklin Templeton
Almost every market move these days seems to be tied to the latest headline coming from Europe. And the U.S. political deadlock on deficit reduction, high unemployment and fear of a recession hiding under the bed are certainly not helping investor morale. But dont throw in the towel just yet. While the ongoing turbulence in the markets has investors feeling more than a little edgy, the story of robust and resilient growth in emerging markets seems cause for optimism.
2011-12-01 Betting on Macau by Mark Mobius of Franklin Templeton
Macaus lifeblood is the casinos. Its quite astounding to consider that Macaus 2010 gaming revenue was four times that of Las Vegas, making it the worlds top casino market. Macau casinos are expecting 2011 gaming revenues of $34 billion whereas Las Vegas anticipating revenues of $6 billion. The potential for Macau looks good to us, however, casinos in Singaporeare providing stiff competition, now represent the worlds second-largest gaming market. In addition, Singapore casinos enjoy a lower tax on gaming revenues. However, we still think Macauis a solid prospect for good investment.
2011-11-22 Readers Questions Answered Part VIII by Mark Mobius of Franklin Templeton
Its been a while since I answered some readers questions. Thank you, readers, for all your responses to the blogthey have been highly encouraging. 1. Do you think there will be a recession globally or in emerging markets from a mid- to
long-term perspective? 2. What is the impact if one or more countries withdrew from the euro? 3.What is your view on Ukraine? Ukraine is one of the more interesting markets since it has a number of viable industries with growth potential.
2011-11-22 Readers Questions Answered Part VIII by Mark Mobius of Franklin Templeton
Its been a while since I answered some readers questions. Thank you, readers, for all your responses to the blogthey have been highly encouraging. 1. Do you think there will be a recession globally or in emerging markets from a mid- to
long-term perspective? 2. What is the impact if one or more countries withdrew from the euro? 3.What is your view on Ukraine? Ukraine is one of the more interesting markets since it has a number of viable industries with growth potential.
2011-11-03 Flooding in Thailand by Mark Mobius of Franklin Templeton
While the consequences of the flood damage will negatively impact Thai corporate earnings, we believe the long term outlook for Thailand remains strong. In addition to the corporate tax cuts and various stimulus packages that have already been announced, the Thai government plans to spend US$13 billion on investments in dams, irrigation and water management to restore the country. We believe Thailand should also remain an attractive place for foreign direct investment due to location advantages, a supportive business environment and highly competitive workforce.
2011-10-17 Addressing Market Volatility by Mark Mobius of Franklin Templeton
With ongoing global uncertainty, I believe there are still a lot of questions surrounding the impact of market volatility in both developed and emerging markets. I recently recorded an interview discussing my views on some of these questions and want to share it with you through a video blog. I hope you like it.
2011-09-30 Commodities and Conservation in the Caspian by Mark Mobius of Franklin Templeton
What country is the worlds largest producer of petroleum? No, its not Saudi Arabia but Russia. Oil and gas are important to Russias economy, as are a whole host of natural resources such as nickel, palladium, diamonds, etc. Because of what have been higher commodity prices, Russias economy is growing at a fast pace, projected by IMF to grow 4.3% this year, interest rates have come down from their peak in 2008, unemployment is lower, foreign reserves have risen to over US$500 billion as at July 2011, and Russian equity markets have generally done well since 2008, even considering declines.
2011-09-07 More Readers Questions Answered by Mark Mobius of Franklin Templeton
We have begun to see signs that the overheated Chinese economy may moderate in the not-too-distant future. We believe that inflation in China could reach a peak in the near future as a result of the Chinese governments decision in July to increase pork supply by releasing a portion of their strategic pork reserves. By releasing more pork supply into the market, the government hopes to combat rising pork prices. That move, combined with an easing growth rate, could subsequently lead to the end of the central banks current tightening monetary policy cycle in the near term.
2011-08-17 Readers Questions Answered Part VII by Mark Mobius of Franklin Templeton
Many of you may be particularly concerned about the developments related to debt in the eurozone and theU.S.over the last few weeks. Id like to take this opportunity to share my thoughts on these events and respond to a couple of reader questions. To me, the European debt situation does not seem as serious as the U.S. debt crisis, both in terms of scale and the possible impact on the global economy. As such, I believe the worlds focus should really be on the U.S. debt crisis. We also have to remember that the tolerance for debt is generally affected by investor confidence levels.
2011-08-09 The U.S. Debt and Emerging Market Opportunities by Mark Mobius of Franklin Templeton
The initial market reaction will likely be a high degree of uncertainty and volatility, since investors will likely not know where to turn for assets with lower short-term volatility. During the subprime crisis, investors largely sought such assets in U.S. Dollars and Treasuries. While during the subprime crisis the USD index was high, now it is low reflecting a changed perception of markets that may be considered less volatile in the short-term. In particular, we believe currencies and stocks of emerging countries may look relatively attractive.
2011-08-05 Urbanization: Driving Commodity Demand by Mark Mobius of Franklin Templeton
Increasing economic activity in emerging markets has continued to push up the demand and prices for key resources such as metals and oil. Infrastructure spending is a key factor driving this rising demand, as more of the working population in emerging markets move from rural areas to the cities, increasing consumption and putting upward pressure on both hard and soft commodities. Long-term commodity prices are likely to be driven by rising global demand as well as increasing costs to obtain these commodities.
2011-07-19 Urbanization: Building a New World by Mark Mobius of Franklin Templeton
Over the next few decades, I believe we are likely to see an increase in several types of infrastructure investments due to rapid urbanization, which drives the increasing global demand for resources, mainly from emerging markets. Rapid urbanization in emerging markets, driven by rural populations migrating to cities in search of work and better opportunities, has put pressure on resources and prompted governments to pump money into a range of urban infrastructure-related sectors such as housing, transportation, sanitation, water, electricity and telecommunications.
2011-07-08 Argentina by Mark Mobius of Franklin Templeton
Argentina has been experiencing steady growth throughout the years despite the country’s economic problems, from double-digit inflation to a shrinking trade surplus. We saw one good example of the improvements in the country when we arrived at the Ministro Pistarini International Airport, which is in much better shape than it was in the past. Besides the bright and airy new wing, the customs and immigration process was quick and efficient. We then checked into a modern hotel in the Puerto Madero area in Buenos Aires, which is another good example of Argentina’s transformation.
2011-06-21 Turkey: A Rising Power Bridging Europe and Asia by Mark Mobius of Franklin Templeton
Turkey is the land where the European and Asian continents meet. I asked Carlos von Hardenberg, who is based in Istanbul and oversees our frontier market strategies, to share his views from the center of Eurasia: Since the implementation of the customs union agreement with the European Union (EU) in 1996, Turkey’s trade with EU countries has grown substantially in certain areas. In particular, the Turkish automobile sector has been growing at a fast pace and has become highly competitive. Between 1999 and 2008, auto production in Turkey grew by 285% to 1.15 million vehicles per year.
2011-06-15 The Problem with the Misuse of Derivatives by Mark Mobius of Franklin Templeton
Market volatility is a reality of today and goes in two directions, up and down. One of the reasons we have (and are likely to continue to see) this level of volatility is because of the occasional misuse of derivatives. Of course, not all derivatives are bad. If understood and used appropriately they can be used by funds as tools to hedge or mitigate risk. For example, currency forwards or interest rate swaps are typically used to hedge out a fund’s risk related to a specific currency or interest rate exposure.
2011-05-27 Abu Dhabi by Mark Mobius of Franklin Templeton
Abu Dhabi is the capital of the United Arab Emirates (UAE), the federation of seven emirates including Dubai. The UAE’s combined economy is large compared to its relatively small size—it has a population of around five million, of which 1.6 million live in Abu Dhabi. Per capita GDP in the UAE is more than US$40,000, and that number is significantly higher for Abu Dhabi, mostly because of the incredible earnings from oil and gas. Each day, Abu Dhabi produces more than 2 million barrels of oil, and its oil reserves are now estimated at nearly 98 billion barrels, the sixth largest in the world.
2011-05-18 Oman by Mark Mobius of Franklin Templeton
I recently visited Muscat, the capital of Oman. Oman has a very strategic position in the Middle East, controlling the tip of the Musandam peninsula even though the peninsula is separated from the rest of Omanby land belonging to the United Arab Emirates (UAE). That tip points right into the Straits of Hormuz, which is the choke point for oil leaving Saudi Arabia, Qatar, Iran, Kuwait, Iraq and the UAE from the Persian Gulf to the Arabian Sea, leading to the Indian Ocean. On a clear day, you can see Iran from the tip of the peninsula. Oman’s military, therefore, has to protect that waterway.
2011-05-06 Opportunities in Southeast Asia (video) by Mark Mobius of Franklin Templeton
Asia presents a wealth of investment opportunities. Economic giants like China and India, with their increasing demand for commodities and natural resources, play a pivotal role for growth in the region, including emerging markets in Southeast Asia. I think the outlook for Southeast Asia remains very positive. Countries like Thailand and Indonesia have seen very rapid growth in the last decade, and frontier markets like Vietnam and Laos, with their strong growth potential, are also very interesting to us.
2011-04-26 Africa: Challenges and Outlook by Mark Mobius of Franklin Templeton
In this post, I will discuss what I think are Africa’s key challenges. Corruption is a major problem in Africa. However, accusations of corruption against African governments could also be lodged against entities in the developed world that seek to buy the influence of these governments. One important development has been the Cardin-Lugar amendment to the Dodd-Frank finance reform bill in the U.S., requiring that oil, natural gas and mining companies registered on the New York Stock Exchange disclose any payment made to a foreign government for the purpose of the commercial development.
2011-04-21 Africa: Opportunities in Nigeria, Ghana and Kenya by Mark Mobius of Franklin Templeton
Those who are optimistic about Africa say that after many years of colonialism, it is beginning to demonstrate its potential. The continent does have its detractors, who say that while it may have been free of colonial rule for 60 years, the continent continues to battle poverty, corruption, AIDS and armed conflict. However, while Africa does have challenges, I am encouraged by another side of Africa that is gradually emerging with the development of capital markets, consumerism and technology.
2011-04-13 Mexico: Conquering its Challenges by Mark Mobius of Franklin Templeton
Mexico has a wonderful combination of a dynamic economy with an active cultural scene. Just like other markets, Mexico’s stock market suffered a crash at the end of 2008 and the beginning of 2009, moving from the 2007 high of almost 32,473 points to an October 2008 low of 16,979 points, a huge decline. Since then it has climbed steadily, more than doubling to reach 38,600 points at the beginning of this year. The Mexican economy has mirrored the stock market. After a disastrous 6% contraction of the economy in 2009, Mexico grew by more than 5% last year and is expected to grow by 4% in 2011.
2011-04-07 China Part II — Looking Beyond Its Shores by Mark Mobius of Franklin Templeton
China’s latest 5 Year Plan is focusing on growing the domestic economy with a focus on harmony. A lot of the foreign investments and the large capital inflows into the Chinese market have all been focused on tapping into one of the world’s largest consumer markets. However, what many are missing is that China is the world’s fifth largest investor in terms of outbound direct investment at about US$56.5 billion in 2009. Last December, China announced US$16 billion in deals in India and this year, Chinese officials pledged to purchase as much as 6 billion Euro worth of Spanish gov bonds.
2011-03-28 China Part I – Planning for its Future by Mark Mobius of Franklin Templeton
As a result of some labor shortages and rising wages in the low-end labor intensive manufacturing sector, some managers are moving parts of their production out of China to lower-cost countries such as Vietnam. This raises the question of unemployment in the export-oriented area which, combined with inflation, could result in social turmoil and labor unrest, if it’s not well-managed. One positive aspect is that the Chinese government recognizes the issues and addresses many of them in their new Five-Year Plan.
2011-03-11 The Middle East: A Youthful Reawakening by Mark Mobius of Franklin Templeton
The upheavals in the Middle East and N.Africa can be attributed to rising food prices, unemployment, corruption and political stagnation. Unemployment has stayed high and waves of new young job seekers entering the labor market have not been absorbed. As in many emerging markets, the populations in MENA countries are young. Most politically explosive is that an increasing number of the unemployed are high school and university graduates. It is important to note that the recent protests have come not from the lowest income levels but from middle-class and educated Arabs seeking fair treatment.
2011-03-09 Readers’ Questions Answered Part VI by Mark Mobius of Franklin Templeton
It’s been a while since I answered some readers’ questions. Questions addressed: What are your main criteria when picking a sector and the company in a particular sector? Most of the small companies in India are family-owned. Does this create a problem? What are your thoughts on Africa? What is your view on the Baltic States? Which sectors do you think are the most interesting? What is your view on the Brazilian and the Mexican equity markets for 2011?
2011-03-03 Emerging Markets Vision 2020 by Mark Mobius of Franklin Templeton
There will always be unforeseen factors and circumstances that might become catalysts for greater changes in the global landscape, as we have seen from the current unrests in the Middle East.. No one knows what will happen in the future, but below is some of what I envision for the emerging markets landscape in the next decade.
2011-02-15 India: Kingdom of Dreams by Mark Mobius of Franklin Templeton
Throughout my travels, I have visited some countries that never cease to amaze me every time I go back, and India is definitely one of them. The country is changing and growing at an incredible pace. In 2010, India’s economy grew by 9.7%, and for 2011 the IMF projects GDP growth to be 8.4%. From 2005 to 2010, India’s economy grew around 6% to 8% each year, an impressive feat for such a large economy. Looking ahead, from 2011 to 2030, EIU forecasts GDP growth to average 6.5% a year, which would make India the fastest-growing large economy in the world during that period.
2011-02-03 Egypt by Mark Mobius of Franklin Templeton
Stock markets in Egypt have been closed since January 30 and those in the Middle East/North Africa (MENA) region declined substantially between January 25 and February 1 as sentiment among some investors turned negative amid the political uncertainty. Other investors have been seeking an opportunity to buy stocks at low prices. The geopolitical ramifications of this unrest are many, not only for Egypt but also potentially for the rest of the world, and for the most part will probably be positive since political reform has been long overdue in the region.
2011-02-01 A Unique Offering in Bucharest, Romania by Mark Mobius of Franklin Templeton
One of the clearest symbols of a market economy is the stock exchange. The Bucharest Stock Exchange (BVB) was inaugurated in 1882, but it was closed when the communist regime took power after WWII. In 1995, the exchange reopened, listing only six companies and holding just one weekly trading session. Less than 10 years later, by the end of 2004, things had changed quite a bit—with more than 70 listed companies and regular daily trading, the market’s capitalization stood at about 17% of Romania’s GDP. Unfortunately, this impressive start was not followed by additional growth.
2011-01-20 Addressing Concerns about a Two-Track World by Mark Mobius of Franklin Templeton
I recently had a conference call with our investors around the world. Depending on where they were from, some of them were concerned about inflation while others were worried about sovereign debt problems. Here are a few topics that we discussed.
2011-01-12 Digging for Hidden Gems Among Small Caps by Mark Mobius of Franklin Templeton
Small-cap companies in emerging markets are generally under-researched and not as established as their large-cap counterparts. Some have very short track records, not much background and little publicly accessible information, therefore presenting a higher level of perceived risk and deterring many investors. But for these very reasons, share prices of small–cap companies are less likely to reflect their true value with fewer analysts covering them, thus creating attractive investment opportunities.
2011-01-06 Descending a Mine Shaft in the Kazhakstan Steppes by Mark Mobius of Franklin Templeton
Kazakhstan is becoming increasingly important to us as an investment destination. It has vast natural resources such as oil, gas, copper, uranium and a host of other minerals. As a result of the billions of dollars pouring into the country to develop those resources, we believe Kazakhstan has become the economic engine for Central Asia. We have been investing in both the petroleum and mining sectors in Kazakhstan, and the purpose of this visit was to take a closer look at the mining sector.
2010-12-28 Emerging Markets in 2011 – Strong Economies, Rising Prices by Mark Mobius of Franklin Templeton
I believe emerging markets are now in a secular bull market, and as discussed below, I expect this trend to continue into 2011. Even more money is likely to be directed into these markets as investors around the world realize that emerging economies on average are growing three times faster than developed economies, and generally have more foreign reserves and lower debt-to-GDP ratios than their developed counterparts.
2010-12-14 A Notable Year of Emerging Market Growth by Mark Mobius of Franklin Templeton
I view 2010 as a year of economic resurgence. Many emerging markets recorded strong GDP growth as they continued to recover from the impact of the 2008 financial crisis. In several cases, robust domestic consumption, government expenditure and intra-regional trade offset weak external demand from developed markets. This led many countries in Asia and Latin America to return to pre-crisis growth levels much faster than expected. China and India were among the world’s fastest-growing major economies during the year, with China overtaking Japan as the world’s second-biggest economy.
2010-12-04 Rebalancing the World by Mark Mobius of Franklin Templeton
We are currently witnessing a largely one-way flow of capital, as money moves from countries of disinflation or deflation to countries with inflation, possibly perpetuating the situation for both. We need to see a rebalancing of the world economy. In recent history, financial authorities in the developed world have encouraged a period of easy credit and loose monetary policy, driving a debt-fuelled rise in consumption. There needs to be more ‘balance’ in the world economy, so high-savings countries should spend more and develop their own vibrant domestic market as we see in the U.S.
2010-11-29 Update on Korea by Mark Mobius of Franklin Templeton
Our investment philosophy has always been to focus on the long-term opportunities and prospects, looking beyond the short-term market distortions or ‘noise’. We remain positive on the outlook for South Korea as the country has continued its growth despite the geopolitical concerns.
2010-11-17 A Tale of Two Countries by Mark Mobius of Franklin Templeton
Argentina’s economy has been growing at a steady pace since the 2001-2002 economic crisis, typical of a recovery following a period of depression. The country has also benefited from a global environment that has allowed it to enjoy the best terms of trade in more than a century. While the external environment remains favorable, adjustments are needed to sustain Argentina’s economy in the long run.
2010-11-11 Leadership Changes in Latin America by Mark Mobius of Franklin Templeton
In Latin America, we are seeing a large and young population moving up rapidly to the new “consumer” middle class, but at the same time having one of the lowest loan penetrations in the world. The rise of this consumer middle class and growth in per capital GDP is resulting in an increase in domestic spending, which drives the domestic economy. Secondly, the region has vast resources available at low cost.
2010-10-27 Reflections: Venturing into a New Frontier by Mark Mobius of Franklin Templeton
Frontier markets are the next emerging markets. These economies are more domestic-oriented, with a limited number of publicly listed companies; hence, frontier market investments tend to be primarily limited to private equity. Quality of company management is a frequent concern. Frontier market investing therefore often requires additional time and due diligence to assess the quality of corporate management teams, including more frequent on site visits to evaluate businesses effectively.
2010-10-21 Readers' Questions Answered Part IV by Mark Mobius of Franklin Templeton
Mark Mobius responds to reader questions on initial public offerings, non-listed entities, China's 20-year prospects, and markets in Thailand, Indonesia and Sri Lanka.
2010-10-16 Malaysia: Respecting History, Embracing the Future by Mark Mobius of Franklin Templeton
As an emerging market, Malaysia presents itself as a very attractive investment destination today. The Malaysian consumer and commodity stocks are attractive and interesting. I am expecting a domestic GDP growth of 6% this year.
2010-10-08 Privatization in Romania by Mark Mobius of Franklin Templeton
Privatization would help the Romania market become more liquid, efficient and productive. Greater transparency, higher reporting standards and more opportunities to invest could attract both local and foreign investors to the Bucharest stock exchange. The market is currently dominated by Romanian residents, who made approximately 70-80 percent of the exchange's trade volume in 2009, but foreign investors play an important part as well. Although they accounted for only 20-30 percent of trades that year, they are often seen as trendsetters.
2010-10-01 China: A World-Class Act by Mark Mobius of Franklin Templeton
Investors in China continue to be concerned about overheating in select sectors, greater inflationary pressures and a widening wealth gap in the country. The Chinese property market, however, is deep and varied, average household leverage is substantially lower than that in the U.S., and the Chinese government has been quick to act to prevent bubbles. While consumer price inflation continues to rise, producer price inflation has begun to subside. Finally, the recent move to increase the flexibility of the renminbi will allow for a slight appreciation.
2010-09-29 What are Essential Factors for Japan to Return to its Status as the Rising Sun? (Part 2) by Mark Mobius of Franklin Templeton
Japan's immigration policy needs to loosen up to help lower labor costs. In addition, the government needs to reduce spending and taxation so that local small and medium-sized enterprises can grow by expanding into the rest of Asia and to business in places such as China, India and Indonesia. That's because small and medium-sized enterprises are a crucial part of the economy that help to create new business and enterprises. In order for those to flourish, the Japanese government must reduce its role in the economy.
2010-09-23 Can Japan Make a Comeback? by Mark Mobius of Franklin Templeton
It seems that everyone is back to moaning and groaning about the Japanese economy. Modest 3 percent GDP growth is expected in Japan this year, compared to a disastrous 5 percent shrinkage of the economy in 2009. Japanese exporters say they are hurting from a strong yen, while the importers are having a field day. While it's true that the Nikkei 225 Index has fallen from a high of 25,000 in 1991 to a low now of less than 10,000, bargain hunters would say that this is beginning to make the Japanese stock market look reasonably cheap.
2010-09-02 Learning From Past Crises by Mark Mobius of Franklin Templeton
Although it is unrealistic to assume that the structural changes implemented in some emerging markets can completely shield them from the effects of future global crises, they seem to have borne the most recent global financial crisis reasonably well. While risks have not disappeared, things look a lot better today than they did 20 years ago. The growing use of derivatives contracts is just one of the many reasons to remain cautious, but some emerging markets' strong fiscal health is cause for hope and optimism.
2010-08-20 Private and Public Sectors – Motivating and Regulating Markets by Mark Mobius of Franklin Templeton
Even though the government and the private sector have different roles in society, Mobius believes both must depend on a capitalist philosophy in order to be successful. When capital is raised, be it from taxes or from the savings of individuals for investment, it must be put to productive use. A free market model with an ineffective umpire, inadequate regulation and an uneven playing field is likely no better than a government-led model with no real capitalist system of incentives to maximize productivity.
2010-08-13 Russia: Insights from Templeton’s Emerging Markets Analyst Conference by Mark Mobius of Franklin Templeton
Russia was one of the hardest-hit countries during the recent global economic crisis, largely due to its huge dependence on commodity prices. The worst, however, is over. We already saw a sharp recovery for Russia's GDP growth recently when commodity prices stabilized. The Russian oil supply experienced significant growth in 2009, taking most forecasters by surprise. The International Monetary Fund is even more optimistic about Russia's growth, expecting the country's economy to grow by 4.3 percent in 2010 due to rising oil prices and an improving fiscal outlook.
2010-08-04 The Emerging Markets IPO Frenzy by Mark Mobius of Franklin Templeton
In recent years, we have seen a rise in initial public offerings in emerging markets as EM companies begin to recognize the advantages of going to the market to raise capital in order to expand and grow. Investors should proceed with caution, however, before chasing IPOs and short-term gains. Not all listings are created equal. There is generally a lot of promotion surrounding all new listings. It is therefore important to conduct your due diligence and evaluate the stock based on its fundamentals with a long-term investment perspective.
2010-07-21 Readers’ Questions Answered Part IV by Mark Mobius of Franklin Templeton
Mark Mobius responds to a new batch of reader questions. Topics include Brazil's long-term economic outlook, investing in India and the qualities of a successful investment manager.
2010-07-09 The Pride of Slovenia by Mark Mobius of Franklin Templeton
The country of Slovenia, although hard-hit by the financial crisis, is home to a number of companies that are promising investment candidates.
2010-07-02 Focus on China: the Renminbi, Commodities and Real Estate by Mark Mobius of Franklin Templeton
The Remimbi's rise is likely to be gentle and controlled. This move does not dramatically change our overall outlook on Chinese stocks, which we think should perform well in the medium term. While the real estate market may have taken on bubble-like characteristics in some specific areas, the government has been quick to react, to control and prevent bubbles, such as introducing measures to restrict bank lending on second and third home purchases. But overall, I don’t think the Chinese real estate market is in dangerous territory in terms of a bubble.
2010-06-25 World Cup Fever in Africa by Mark Mobius of Franklin Templeton
The outlook for Africa is positive. It has stirred the interest of countries like China, India and other fast-growing emerging markets, which require increasing resources for their growing economies, as well as countries like Russia and Brazil, who look to expand their enterprises into global operations. South Africa, acting as a representative for the continent through the World Cup, has shown that it can host an international event to international standards, and this bodes well for the region's future investment prospects.
2010-06-18 Insights on Hungary by Mark Mobius of Franklin Templeton
The Hungarian market was one of the top performers in Eastern Europe in 2009 with the MSCI Hungary Index returning 78 percent in US dollar terms. The Hungarian market significantly outperformed its regional peers - Poland and the Czech Republic. In the first five months of 2010, however, the market was down 12 percent in U.S. dollar terms, mainly due to a 23 percent decline in May alone on concerns that Hungary could face similar financial problems as Greece.
2010-06-10 Addressing Investor Concerns after Heightened Volatility by Mark Mobius of Franklin Templeton
Mark Mobius shares responses to investor questions on emerging markets. Emerging markets continue to be fundamentally strong, with high growth levels, a lower debt-to-GDP ratio compared to developed markets, higher foreign reserves and declining risk. Credit default swaps in many emerging market countries now trade at lower spreads than those of some European countries. On average, however, investors still have a weighting of just 3-8 percent toward emerging markets in their portfolios, while emerging markets now represent about 30 percent of the global market capitalization.
2010-06-03 Spotlight on Southeast Asia by Mark Mobius of Franklin Templeton
The GDP of Southeast Asia is about the same size as India, and within two decades, the region is expected to have a larger and younger population than Europe. It is also a major exporter of soft commodities like palm oil, rice, tapioca, coconut oil, and rubber. Vietnam is one of the key frontier markets in Southeast Asia, and valuations there are among the cheapest in the world. Indonesia's extensive resources and large population put it in a favorable position to attract investments and establish a strong domestic economy.
2010-05-27 Finding a Niche in South Korea by Mark Mobius of Franklin Templeton
Mark Mobius reflects on a recent trip to South Korea. Allegations that North Korea torpedoed and sank one of South Korea’s naval ships have elevated political tensions on the Korean Peninsula, and caused jitters in regional markets. North Korea has been in a continuous crisis, and tensions have been high since the end of the Korean War. Despite all the geopolitical concerns, however, South Korea has continued to grow its economy. South Korean manufacturers are capitalizing on their strengths to specialize in niche markets.
2010-05-21 Comments on Thailand by Mark Mobius of Franklin Templeton
Local and international investors have become accustomed to political turmoil in Thailand, and therefore have not rushed to sell at times like these. Although the recent disturbances have impacted central Bangkok, most of the rest of the country has not been affected, and it is business as usual. In fact, a few weeks ago the Bank of Thailand raised its forecast range for GDP growth this year to between 4.3 percent and 5.8 percent from the original 3.3 percent to 5.3 percent due to strengthening global demand for the country’s exports.
2010-05-13 Reader' Questions Answered by Mark Mobius of Franklin Templeton
Mark Mobius responds to reader questions on emerging markets. Mobius notes that global markets tend to react to headlines in the short-term. At the end of the day, however, each country and each company has its own set of dynamics and fundamentals. Research is about identifying the differences among them. Key differentiating factors are often the basis for success in the long run. He also comments on the Greek debt crisis, political stability in Poland, reforms in Colombia and the recent death of Nigeria's president.
2010-05-07 Keeping an Eye on Currencies by Mark Mobius of Franklin Templeton
Even though it is not clear if, when, and how China will make an upward revision in the value of its currency, one trend is clear: moves involving the renminbi by Chinese authorities will be closely watched around the world as China steps up to play a bigger role in world trade.
2010-04-30 A Green Brazil by Mark Mobius of Franklin Templeton
Brazil’s export and domestic markets are booming, and economic growth could be as high as 5.5% this year. Brazilians have become more sensitive to environmental issues, particularly since the nation’s extensive natural resources in iron ore, oil, steel, coffee, oil, soybeans, sugar and beef have historically been a source of both export and domestic consumption on a major scale.
2010-04-22 Demystifying Romania by Mark Mobius of Franklin Templeton
Franklin Templeton sees tremendous opportunities for growth and investments in Romania, and will soon expand operations there. Romania and other Eastern European countries are transforming their economies from state-dominated socialist economic models to systems driven by market forces and private enterprise. Romania joined the European Union in 2007 and is undergoing substantial reforms that should strengthen capital markets in the country. Like other countries in Eastern Europe, however, Romania was hit hard by the recent financial crisis and needed a rescue package.
2010-04-16 Update on Thailand by Mark Mobius of Franklin Templeton
While the current political crisis in Thailand poses big headline risks to stocks over the short term, it is not new or unexpected for the country. Since absolute monarchy was abolished in Thailand in 1932, there have been about 20 successful and failed coups, numerous unrests, and several changes in the constitution. The series of political issues from the Asian crisis in 1997 to recent fears of the Thai King’s waning health late last year, however, have not impacted the long-term growth outlook for Thailand.
2010-04-01 Knowing Your Shareholder Rights by Mark Mobius of Franklin Templeton
This week, I talk about an issue that I think is important for investors, especially for long-term investors. It is not enough just to identify the next “big opportunity”, but, having identified it and invested in it, you need persistence and determination to ensure that your investment stays on the right track.
2010-03-18 Bear Stearns: The Bear That Started It all by Mark Mobius of Franklin Templeton
It is now two years since the Bear Stearns bailout, which set the stage for the global financial crisis triggered by the collapse of Lehman Brothers, another established name in the business. Some of the key issues that led to the global financial crisis, however, remain unresolved, and could give rise to future problems. While perhaps not popular, it is necessary for governments to insist upon the separation of investment banking and regular banking, and to ensure complete transparency and liquidity of all derivatives.
2010-03-11 Jordan: Optimism in the Heart of the Middle East by Mark Mobius of Franklin Templeton
Mark Mobius recounts a recent trip to Jordan in search of investments. Jordan is a modern democratic constitutional monarchy with the king as head of state. It has a highly educated population of about 6.1 million and a growing middle class. Government policies focus on economic reform and growth. The country's 20 percent of GDP annual spending on education makes it one of the highest education spenders in the region. Jordan's health care system plays a key role in the national economy, and professional women are able to attain high status.
2010-02-18 Personal Qualities that are the Building Blocks for Good Investing by Mark Mobius of Franklin Templeton
Finance industry professionals need four things to succeed in the investment world: Motivation, humility, hard work and discipline. If investors can develop these personal qualities and maintain a healthy sense of optimism, they can succeed in emerging markets.
2010-02-05 Greece: Opportunities despite the Challenges by Mark Mobius of Franklin Templeton
Mobius recently traveled to Greece and discusses its fiscal problems and the likely path of tax increases and reduced government spending.
2010-01-28 Insights from EM Analyst Conference by Mark Mobius of Franklin Templeton
Mobius’ posting has comments from analyst Dennis Lim about the role of commodities and consumer spending in the BRIC economies, notably in China.
2010-01-21 Unlocking Potential Through Corporate Governance by Mark Mobius of Franklin Templeton
I cannot stress enough my belief of the strength of the correlation between good governance and good corporate performance. As a result of this connection, we often see stock prices rise as a result o
