March 31, 2015 / 6:44 AM / in 5 years

Templeton's Mobius says Greece to stay in euro, shares are cheap

ATHENS (Reuters) - Veteran investor Mark Mobius of Templeton’s emerging markets Investment Trust told Greek financial daily Naftemporiki on Tuesday that Greece’s stock market was cheap and that the country would remain in the single currency club.

Mark Mobius, executive chairman of Templeton Emerging Markets Group, attends a plenary session of "The Russia Forum 2013", an annual business and investment conference, in Moscow, April 18, 2013. REUTERS/Sergei Karpukhin

“Greece will stay in the euro zone, there is no issue,” Mobius, who is in Athens for company visits, told the paper. “The stock market is cheap and we are buyers.”

Uncertainty over the Greek government’s negotiations with its official creditors to unlock remaining bailout funds has hurt the stock market, with the Athens bourse’s blue-chip index down 14 percent year to date.

Mobius said privatisations are key to attracting foreign investors in Greece and improving the market climate.

Greece’s new leftist-led government, which took power in January on pledges to end painful austerity, has said it would halt a string of state divestments planned by the previous administration.

But in a u-turn last week, the deputy prime minister said Athens would sell its majority stake in Piraeus Port Authority (OLPr.AT), the country’s largest port where China’s port operator Cosco Group is already an investor.

“Give businesses to the Chinese. Give (them) ports, railroads, don’t be afraid of them. They have huge capital and want to build profitable companies,” Mobius was quoted as saying.

The investment guru told the newspaper that continuing the “punishing” austerity imposed by the country’s official lenders - its euro zone partners and the International Monetary Fund - would not help it recover and that more investment was needed.

“The emphasis the new government is placing on renegotiating the austere terms that have been imposed on the country is positive, it will boost optimism,” Mobius said.

“However, Greece’s ability to renegotiate its debt and repayment terms will prove a very big challenge.”

Reporting by George Georgiopoulos; editing by Mark Potter and Jason Neely

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