Mumbai: The world’s equity markets may be in the midst of a bull market by 2010, as the recent rally is the building block for the next bull market, Mark Mobius, managing director, Templeton Asset Management Ltd, said in an interview. Edited excerpts:
Getting ready: Templeton’s Mark Mobius says the stock market is at the cusp of a new bull run, at least for emerging markets. Scott Eells / Bloomberg
Are we still in a bear market, or do you think we have turned the corner?
I think what we are doing now is building a base for the next big bull market. You notice that the pricing is moving up and down in a relatively large channel, and that channel has an upward slope.
So if you look at the valuations, flows of funds, the amount of money being printed by not only the US, but by governments around the world…if you look at money supply going up as soon as the velocity of that money increases, then you will have a bull market in a big way.
Do you think the worst of the bear market is over from a pricing point of view? Or, do you fear that in this consolidation phase, lows hit in October or March could be retested or even violated?
I don’t think they will be violated; I think they might be tested. But it would be part of this base-building process that I mentioned. I think the worst is over.
How would you describe the rally that we have seen from the bottom hit on 9 March?
I wouldn’t say it’s a bear market rally. I would say that we are now at the cusp of a new bull run, for emerging markets at least. I can’t speak for the developed countries.
Are you then saying—just to read between the lines—that 2010 could actually be a bull market year for equities?
I think it could very well be, with the amount of money that’s floating around in cash. Definitely, it could be another bull market run. You could find a bull market upon us very very soon.