By Christine Murray
MEXICO CITY, Feb 19 (Reuters) – A global sell-off in
emerging economies is nearing bottom, veteran emerging markets
investor Mark Mobius said in Mexico on Wednesday during a tour
to take the pulse of Latin American markets.
Mobius, who oversees around $47.3 billion in countries from
China to Argentina, said that, compared with developed
economies, emerging markets still have higher economic growth,
growing foreign reserves and lower total debt relative to gross
domestic product.
“My thinking is that people are already beginning to realise
that maybe they moved too fast,” the chairman of Templeton
Emerging Markets Fund said at a news conference in Mexico City
on Wednesday.
“We’re nearing the bottom of this exodus.”
Currencies in Turkey, South Africa, Hungary and Russia,
which suffered violent sell-offs over the past month, have
recovered slightly, partly because central banks fought back
with interest rates increases or exchange rate interventions.
Although risks still remain, with investors braced for the
Federal Reserve’s stimulus withdrawal in April, and elections in
five major emerging markets this year.
Mobius also warned that, although public and private debt
together was still lower in emerging markets, he saw rising
consumer debt in South Africa and Mexico.
“Consumer debt has gone up to a level where people are
really pressed to pay,” he said.
Mobius praised the sweeping economic reforms, spanning
energy to telecommunications, that Mexican President Enrique
Pena Nieto pushed through Congress, and said investors were
waiting with baited breath for the new laws to be implemented.
“Everyone we spoke to is excited about Mexico because of the
oil. Any of the oil companies that you talk to want to come
here,” he said.
Mexico is the world’s No. 10 oil producer.
However, Mobius, who specialises in equities, said
opportunities to buy the shares of Mexican companies were not
attractive across the board.
“We do feel that some of the stocks are somewhat expensive,
so it’s very much a stock-pickers market,” he added.
