Mark Mobius, Executive Chairman of Templeton Asset Management, is a fan of the consumer and commodities sectors in the BRIC countries of Brazil, Russia, India, and China.
“Companies that are strong in production of commodities such as oil, iron ore, nickel, platinum and other such products are favored. In the consumer area, we are interested consumer banking, retail and consumer disposable product companies,” he wrote in a Q&A on Templeton’s Web site.
India faces a good outlook since its “macroeconomic fundamentals have significantly improved,” said Mobius, who manages $34 billion in developing-nation assets for Templeton.
“The government has done a good job in managing the economy through the recent crisis and unlike companies in the U.S. and Europe," he wrote.
"Most Indian companies have healthy balance sheets and strong cash flows. The Indian stock market was a good performer in 2009 and we expect it to continue to outpace other emerging markets this year.”
Stocks in India could strengthen by another 20 percent, said Sachin Shah, manager of the Alchemy India Long Term Fund said on Bloomberg Television.
“Valuations are at this point of time quite normal. I don’t think there’s much to fear from the domestic point of view,” Shah said.
Mobius did not pinpoint a BRIC country to invest for this year.
“Our largest holdings are in Brazil, China and India but we are continuing to hold and purchase Russian stocks due to their attractive valuations and long-term potential. All four markets present opportunities at the moment and it is difficult to pick any one over the others.”
Investors must be willing to hold onto their investments in those countries for four to five years because of their volatility, he said.
“We believe that BRIC markets will continue to do well over the long run but over the short run, we must remember that these markets are volatile,” Mobius said.
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