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Stock prices looking attractive

By Paul McBeth

Monday 17th November 2008

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The stock-market rout is making prices look “increasingly attractive,” prompting the fund manager to increase holdings in Hong Kong, India, Taiwan and Indonesia, according to Mark Mobius, Executive Chairman of Templeton Emerging Markets Investment Trust.

The volatility in global financial markets and the collapse of several major American corporate firms has prompted a worldwide exodus from equity markets, Mobius said in TEMIT’s latest quarterly report, released to the NZX.

“While no one can predict the absolute bottom of a market, we could be near the point of maximum pessimism, with market valuations looking increasingly attractive,” said Mobius. “History has shown us that the best time to buy is when everyone is despondently selling.”

TEMIT, a subsidiary company of US investment vehicle Franklin Resources, announced a fall in net asset value of 16.3% for the three months to September. TEMIT’s share price has fallen 45% this year on the NZX, and is currently trading at $6.75.

Recent purchases saw it gain footholds in technology companies Tata Consultancy, Mediatech, and VTech Holdings as it continued to search for undervalued stocks, according to the report.

It sold holding in Souza Cruz, Brazil’s leading cigarette company, as it looks to reduce its exposure in that country. Almost 25% of its total assets are in Brazilian financial and energy companies.

“Emerging markets have escaped relatively unscathed due to their low exposure to subprime mortgages,” said Mobius. “That is not to say that emerging markets have not and will not be hit by the developments taking place in the US”.

The trust invests in emerging markets, and warns investors that they carry a higher degree of risk and should be considered as long-term options.

www.businesswire.co.nz"

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