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By David Chance
LONDON, April 14 (Reuters) - Emerging markets guru Mark Mobius said on
Friday that he would probably lighten up on holdings of
telecommunications companies and he expected global market volatility to
increase as a result of the sharp declines on the Nasdaq market.
Speaking to Reuters in a telephone interview from India, Mobius, who
manages some $12 billion of emerging markets money, told Reuters that
telecommunications stocks "have gotten a little expensive". "I think
(portfolio) change will probably be telcos and that will probably come
down," Mobius said, adding however that telcos would remain the largest
single sector.
The sharp drop in the value of the tech-heavy U.S. market has hit some
emerging market stocks hard and the benchmark International Finance Corp
Composite Index is now down one percent on the year. Mobius said that he
did not see any signs that the dramatic losses among U.S. dotcom stocks
would end and that global market volatility would increase this year.
"Once you get this going, it is like on the upside, it is
self-perpetuating," he said of dotcoms. "Globally, volatility is going
to increase," he said.
Among individual countries, Mobius has been lightening up on South
African stocks, where he had a large overweight and remains bullish on
Mexico and Brazil. Mobius stressed however that he had not turned into a
bear on South Africa and said the changes mainly reflected portfolio
rotation. He said he still saw value in companies such as Sappi Ltd
<SAPJ.J, South African Breweries Plc <SAB.L and Anglo American Corp of
South Africa Ltd <AACJ.J. Mobius also said that he still believes that
emerging markets will be
strong performers this year.
Elsewhere, Mobius said Templeton's analysts were telling him that the
Polish technology sector still had some way to rally. Contrary to some
of the views among fund managers Mobius believes that the Taiwanese
technology sector does not necessarly offer good value relative to
industrial sectors in Taiwan. "If you look at the smokestack/technology
valuations, the difference is pretty large," Mobius said.
He also had some harsh words for fellow fund managers, who he said have
slavishly followed stock market indices. "At least 50 percent of my
colleagues are following the index and I regret the lemming-like
behaviour of us in the industry and the lemming-like behaviour of
clients," he said.
Stock exchange regulators also came in for criticism for failing to
allow markets to function. India, for example, has a daily limit of an
eight percent price move, which Mobius said could exacerbate panic by
allowing orders to pile up. "The regulators are behind the ball here,"
he said. ((David Chance,
London Capital Markets +44 171 542 6784 email
david.chance@xxxxxxxxxxx))
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