Templeton,Mobius:Thailand is “right at the top of our list”

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Mobius Says Stocks Look Better, Faber Sees S&P 500 Rally
Templeton Asset Management’s Mark Mobius said stocks are “looking better” amid turmoil roiling global markets. Marc Faber, publisher of the Gloom, Boom & Doom report, expects a rally in the U.S. Standard & Poor’s 500 Index of about 40-to-50 points.

The S&P 500 Index (SPX) slumped 60.27 points, or 4.8 percent yesterday, the biggest percentage drop since February 2009, as concern the global economy is weakening prompted a global rout. The MSCI World (MXWO) Index of global stocks entered a so-called correction yesterday, falling more than 10 percent from this year’s high, amid a seven-day sell-off that wiped out more than $4.4 trillion from market values worldwide.

“With real interest rates in negative territory around the world in most cases, we are much better off with equities,” Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said in a Bloomberg Television interview today.

Asian stocks fell today by the most since March, while oil and wheat paced losses among commodities. The MSCI Asia Pacific Index sank 3.8 percent, the biggest drop since March 15, as of 11:50 a.m. in Hong Kong. The MSCI Emerging Markets Index dropped 2.8 percent, set for its biggest four-day decline since November 2008.

Markets are “extremely oversold,” Faber said in a separate Bloomberg Television interview, adding he expects a “snap-back” rally in the S&P 500. He doesn’t expect new highs for equities in 2011.

No Change
Chief strategists at 13 banks from Barclays Plc to UBS AG see the S&P 500 surging 17 percent through Dec. 31, the average estimate in a Bloomberg survey. Their projection that the index will reach 1,401 hasn’t budged in four weeks, while mounting concern U.S. growth is slowing drove the S&P 500 down 11 percent since July 22, including yesterday’s tumble.

The U.S. gauge closed yesterday at 1,200.07, the lowest level since Nov. 30. Futures on the gauge dropped 0.1 percent to 1,197.30 today. About $1.8 trillion has been erased from American equities as reports on manufacturing and consumer spending showed the world’s largest economy is slowing.

Thailand, Vietnam and Indonesia are of “particular interest” to Templeton, Mobius said. Thailand, where Yingluck Shinawatra is expected to become the nation’s first female prime minister after an election victory last month, is “right at the top of our list,” Mobius said.

Thailand’s SET Index gained 3.1 percent in the month to yesterday, the second-best performance among Asian benchmark gauges in that time, according to data compiled by Bloomberg.

“The emerging markets are in much better shape than the developed countries,” Mobius said. “If you look at the gross domestic product levels, foreign exchange reserves, emerging markets are in a very, very sweet spot.”

To contact the reporter on this story: Weiyi Lim in Singapore at [email protected]

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Credit http://www.bloomberg.com/news/2011-08-0 ... rally.html
By Weiyi Lim - Aug 5, 2011 10:52 AM GMT+0700