Templeton Asset Management's Mark Mobius said last Friday he sees big bargain-hunting opportunities in Viet Nam and Romania due to good growth prospects, with a large potential in their equity markets.
Mobius, a prominent emerging markets fund manager who oversees about US$40 billion in assets, said he does not see an asset bubble appearing in Asian shares, but investors should watch out for volatility and instability in emerging economies.
The fund manager oversees the Romanian government's compensation fund – Fondul Proprietatea – with a size of 4 billion euro ($5.13 billion) in assets, or about 20 per cent of the market capitalisation of Romania's stock market.
"We'll be investing probably most heavily in raw materials, oil, gas as well as electric power, because of big demand for electric power in the country," Mobius, executive chairman of Templeton Emerging Markets Group, told a news conference.
The Romanian fund is diversified, with the largest holdings in oil companies. The fund also invests in gas and gas transmission companies and property firms, he said.
Templeton is also looking to invest steadily in Viet Nam, Mobius said.
"Viet Nam's stock market is now down from the peak in '07 and there is a good opportunity now because of low prices," he said.
Increasing
Mobius said Viet Nam's population is increasing by 1 per cent a year and the country's stock market is growing at a good pace.
Viet Nam has a weighting of 7 per cent in the Templeton Frontier Markets Fund, with total assets under management of $442.45 million as of July 31.
The fund sharply outperformed the benchmark over the past year, producing a return of 21.8 per cent against the benchmark of 4.8 per cent.
"We've been investing in a pretty wide variety of companies (in Viet Nam). Liquidity is very difficult and small, so it takes patience," Mobius said.
He said he has been looking at property and harbour firms.
The fund manger was in Viet Nam last week to also look at furniture companies.
Templeton does not see an asset bubble occurring in Asian shares, but sees it as hard to avoid volatility in emerging markets.
Investors must be ready for volatility and must be patient, Mobius said.
"We try to encourage people to buy when things look bad when markets are down, because as you can see the recoveries in these bear markets can be very rapid," he said.