Templeton's Mobius still buying Egypt stocks

LONDON Tue Dec 11, 2012 2:09pm GMT

Chairman of Franklin Templeton's Emerging Markets Group Mark Mobius speaks during a news conference in Mumbai March 28, 2011. REUTERS/Danish Siddiqui

Chairman of Franklin Templeton's Emerging Markets Group Mark Mobius speaks during a news conference in Mumbai March 28, 2011.

Credit: Reuters/Danish Siddiqui

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LONDON (Reuters) - Protests in Egypt have failed to deter veteran emerging market investor Mark Mobius, who said on Tuesday he is holding onto his Egyptian stock position and is looking to add more even as the latest crisis unfolds.

Mobius, executive chairman of Franklin Templeton's emerging markets group, told Reuters in a telephone interview that while there was an international focus on the protests over Egyptian President Mohamed Mursi's plans to vote on a new constitution, business continued as usual in many parts of the country.

"Tahrir Square is not Egypt. Life goes on outside Cairo," Mobius said, following a recent visit to Cairo which included going to the square during protests there.

Mobius said that the latest wave of protests was "relatively peaceful".

Egyptian stocks .EGX30 have dropped 12 percent in the past few weeks but remain 38 percent higher on the year, having posted one of the best stock market performances of 2012.

Egypt had a weighting of 4.6 percent in the Templeton Frontier Markets Fund at end-Sept, according to Lipper data, and holdings in the $1.1 billion fund include companies such as Orascom Telecom ORTE.CA and Egyptian International Pharmaceuticals (PHAR.CA).

"Possibilities in construction are going to be interesting - we have not done anything there yet," Mobius said.

Mobius, speaking from Nairobi, said he was optimistic on the Middle East and North Africa region since the Arab Spring uprisings last year.

He said Tunisia and Libya were countries to watch.

Rwanda was another possible investment destination in Africa, Mobius said, with Africa already having a 23 percent weighting in the frontier markets fund.

"The population is so young and the growth rates are high, we see the changes taking place here have been very dramatic. With the growth, you are going to get equities that are very attractive."

VENEZUELA

Mobius said he had not invested in Venezuela since Hugo Chavez came to power in 1999.

Chavez this week named a successor as he battles with cancer, and markets have soared on speculation that a more market-friendly government will win power in the Latin American oil-producing country.

"If there is a change in government, there could be a change in attitude towards capital markets, the change will probably come gradually," Mobius said.

Emerging stocks will outperform the developed world next year, after underperformance in 2011 and the first part of 2012, Mobius said.

"The BRICs story is not over, BRICs will again hold their own," he said, adding that price appeal meant Brazil and Russia had higher weightings in Templeton's emerging markets fund than India and China, while Indonesia also held a strong weighting.

(Reporting by Carolyn Cohn and Mike Dolan; Editing by Louise Heavens)

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