D-8 and Mining Sector Still Promising for Investors

Kuala Lumpur, Malaysia | February 09, 2009 by D-8 Secretariat

Mark Mobius, who is currently the Managing Director of Templeton Asset Management

Mark Mobius, the executive chairman of Templeton Asset management, said Turkey, among other countries, still offer one of the best investment opportunities at the time of increased volatility and uncertainty in global markets.

Mobius, who oversees about $26 billion in emerging-market stock, said rising income in China, India and other parts of Asia will spur spending on consumer goods, while commodity prices are now “too low.”

The two nations, Brazil, South Africa and Turkey offer best investment opportunities, he was quoted as saying by Bloomberg News at a briefing in Kuala Lumpur on Saturday.

The investment guru also said he plans to buy more shares of consumer and commodities companies in emerging markets, according to the report on Bloomberg’s Website.

“Valuations are attractive… We feel that this year would be a year of recovery of the stock markets in the emerging markets,” the report quoted Mobius as saying.

“There is an incredible build-up of foreign reserves in the emerging markets, and the increase in money supply is quite dramatic,” the executive chairman said. “We’ve seen a very big increase of money coming into markets.”

The emerging-markets gauge trades at 8.2 times its companies’ reported earnings, 36 percent cheaper than its average valuation last year, according to data compiled by Bloomberg. The developed measure trades for 10.8 times profit.

The MSCI Emerging Markets Index dropped 54 percent in 2008, the worst performance since the measure was created in 1987, as global credit markets froze.

The index has gained 18 percent since reaching a four-year low on Oct. 27 as governments worldwide unveiled spending plans to bolster economies.

ECONOMIES TO REBOUND IN 2010

The U.S. economy and other economies will rebound in 2010, said Mobius, whose biggest holdings are in Asia.

Central banks from the U.S. to Japan to China cut interest rates last year to revive economies and spur lending after financial companies worldwide reported more than $1 trillion of asset write-downs and credit losses.

Mobius said he’s interested in producers of nickel, gold, iron ore, palladium and platinum, the Bloomberg added.

D-8 countries are rich with natural resources. The growing world economic activity and industrial production in the past four decades has resulted in a significant increase in the demand of minerals globally. In recent years, international increased consumption has further boosted world minerals demand and prices. Thus creating incentives and opportunities for D-8 member countries to commercialize their mineral reserves.

At the 6th Summit of the D-8 in July 2008 in Kuala Lumpur, Malaysia, the Heads of State/Government of member countries reiterated their commitment to carry on the ideas of economic cooperation among D-8 countries, in all aspects of economic cooperation, including in energy. The Summit also adopted Roadmap of Developing Eight Countries for Economic and Social Cooperation in the Second Decade of Cooperation (2008-2018) which is meant to be the guidance of D-8 cooperation. Strengthened by the adoption of Kuala Lumpur Declaration at the 6th Summit, D-8 countries has reaffirmed their commitment to urgently address the energy issues through collaborative efforts in various areas.

D-8 has held the first D-8 Working Group on Mining and Minerals Meeting theming “A Resonant Minerals Sector for Sustainable Development”, in Bali, Indonesia, earlier in December 2008.

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