24th March, 2009

Stock market investors have lost the shirt on their back in the global meltdown in the equity markets. There seems no end to the flow of the bad news on all finanacial fronts. Mark Mobius, who had correctly predicted in December 2008 that emerging markets will rebound before developed markets, has made another prediction.

According to Mobius, who runs Templeton Asset Management, the next “bull-market” rally has already begun and there are cheap bargains in every emerging market following a record slump in stocks.

The MSCI Emerging Markets Index has jumped 23 per cent since reaching a four-year low on October 27, outperforming the 2.5 per cent drop in the MSCI World Index and 9.5 per cent decline in the Standard & Poor’s 500 Index. Emerging markets made up the 10 best-performing benchmark gauges this year, led by the 26 per cent gain for China’s Shanghai Composite Index.

“You have to be careful not to miss the opportunity,” said Mobius, who helps oversee about $20 billion of emerging-market assets as executive chairman at San Mateo, California- based Templeton. “With all the negative news, there is a tendency to hold back.”

Emerging markets are in “better shape” than developed economies, Mobius said. The fund is looking for companies that are “cash-rich”, have low debt and higher dividend yields, or those that can invest for future growth yet have cash left to pay shareholders, he said.

A company’s participation in derivatives is warning against some stock selections, Mobius, 72, said in a television interview from Hong Kong.

You are going to see a lot of bouncing off the bottom because there’s a tremendous amount of uncertainty in the market,” Mobius said, “But I have a feeling we’re at the bottom and now we’re building a base for the next bull market.”

Mark Mobius was voted among the Top Ten money managers of the 20th century in 2006, he was also included in the Top 100 Most Powerful and Influential People by  Asianmoney Magazine. Mark Mobius is name which commands respect in finanacial markets and every stock market analyst pays attention to what he has to say. So if you have suffered due to the bear run in the stock markets, maybe it is time to muster some courage and start stock picking once again.