Mark Mobius, managing director of Templeton Asset Management Ltd, spoke about emerging market equities in general, and the Indian market in particular, in an interview. Edited excerpts:
Looking ahead: Templeton Asset Management chairman Mark Mobius says the world will continue to see interest in India going forward. Munshi Ahmed / Bloomberg
Emerging market equities saw an 8-10% correction in February. Do you think a bigger correction is likely or are things okay?
Big corrections can be expected along the line in what is still a bull market. So thankfully, we haven’t seen a very big correction, but I think we have to be ready for that. Valuations are not that high, we are more or less in the middle of the range for all of the history of emerging markets. So that doesn’t concern us so much. So we think yes, correction is on the way, but it is still a bull market atmosphere.
Are emerging market funds attracting more money?
We have seen a lot of money coming in on a continuous basis in our Bric (Brazil, Russia, India and China) funds, which of course impact India a lot.
Does that mean India is becoming a preferred market? Or are risk levels generally going down, so money is being spread out wide?
India is looking very good and we have seen more and more interest in India, but the biggest push is Bric countries and whenever you mention Bric, India of course is very large. So we are going to continue to see interest in India going forward. If we see faster action on part of the government in India on infrastructure and other investments, then we will see a lot of very good interest. But as I say, even without anyone taking any action in any direction, the interest in India is very high.
The Templeton Strategic Emerging Market Fund has recently picked up a sizeable stake in an oil exploration company in India called Shiv-Vani Oil and Gas Exploration Services. Are you also interested in the oil and gas exploration space?
Yes, and we are very interested in the oil and gas service industry. In fact, here in Singapore, we have made an investment in a company called Halcyon (Offshore Pte Ltd) that does offshore oil and gas equipment insulation and service. That is why Shiv-Vani Oil and Gas Exploration Services is a very nice fit into that and of course, we are putting these people together. In fact we also have investments in Brazil in the same area. So we hope to be able to help these companies grow.