Mobius Says Emerging-Market Selloff to Deepen on Outflows
The worst isn’t over for emerging markets after the benchmark stock index sank to a five-month low and the nations’ currencies tumbled, said Templeton Emerging Markets Group’s Mark Mobius.
"We are looking but actually not buying at this stage. Prices can come down or take time to stabilise." The outlook from Mobius, a consistent advocate of emerging markets who's been investing in the countries for more than 40 years, contrasts with that of Jim O'Neill , who created the BRIC moniker for the four largest developing economies and said this week that the rout created a buying opportunity.
The MSCI Frontier Markets Index rose 21 per cent in 2013, outpacing the MSCI Emerging Markets Index by 26 percentage points, the widest annual gap since 2005. Corporate earnings in the 26 countries that make up the frontier index have risen to the highest level in five years.
Profits in the MSCI emerging index, which is dominated by the BRIC countries, are still about 11 per cent below their 2011 high. The pace of economic growth in China is among the biggest questions in developing nations and the largest risks for markets, Bill Gross, who oversees the world's biggest bond fund at Pacific Investment Management Co., said Feb. 4.
Riskier assets remain vulnerable, he said. The US-domiciled Templeton Frontier Markets Fund has topped 98 per cent of its peers in the last three years with a 4.6 per cent annualized return, according to data compiled by Bloomberg. The fund, which managed about $1.5 billion of assets at the end of December, had its biggest holdings in Middle East and Africa, according to a fact sheet on the firm's website.
Templeton's $13 billion Asian Growth Fund has outperformed 89 per cent of peers in the past five years. Mobius said in a Januray 29 interview that inflows into developing nations would resume later this year because they have fast economic growth, low debt relative to gross domestic product and high foreign-exchange reserves. "There are opportunities," Mobius said. "But there's no rush to get in."
>>> Nifty - As Updated Last Weekly Review <<<
>>> Happened and Yet to <<<
As wrote last weekly review, Nifty breached 5970 and took support @ 5933. Key resistance 6130 or 6144, break above these levels may change the pattern and above counts are modifiable. Lets See.
>>> Nifty - Hourly Chart - As Updated as on 05th Feb, 2013 <<<
>>> Happened and Yet to <<<
We are long sine 6005 and moved above 6034 and closed @ 6064.
>>> Bank Nifty <<<
Bank nifty if crosses the middle line - expect short covering.
>>> Axis Bank - As Updated on 04th Feb 2014 <<<
>>> Happened and Yet to <<<
We are still Long and yet there is a fresh break out see on friday.
>>>> SBI - As Updated on 04th Feb 2014 <<<
>>> Happened and Yet to <<<
Again a fresh break out see on SBI on friday. Lets see.
