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Viet Nam among best ‘frontier' markets
Viet Nam, Nigeria and Kazakhstan are amongst "frontier" markets that Franklin Templeton expects to place its biggest bets on in 2011 as it seeks opportunities in countries shunned by most money managers, its emerging markets head Mark Mobius said on Dec. 16.
Investors have shown increasing interest in so-called frontier markets over the past year, hoping their early entry will translate into bumper returns if these countries become as popular as China, India and Brazil.
Templeton, who manages a small Frontier Markets equity fund as well as private equity vehicles that invest in emerging markets, ranked Nigeria as its No 1 pick among frontier economies, Mobius said.
Regarding Viet Nam, Mobius said the country's stocks were the cheapest in the world when measured by price-to-earnings and price-to-book ratios although Templeton had been buying in small quantities only due to a lack of market liquidity.
"The perception of many people is that Nigeria is one place that they don't want to go. We found it different... There's lots of reform taking place in Nigeria, particularly and surprisingly in the banking sector," he said.
Nigeria, Africa's most populous country with over 150 million people, suffered a near-collapse in its banking system last year, forcing the government to rescue and recapitalise nine lenders.
As for Kazakhstan, Mobius said the country was rich in oil and copper, and he was bullish on energy and commodity prices because of continued strong demand from China and India.
"The companies we have interests in are invested by the government or the people in power so to that extent we protected," he said when asked about expropriation risks.
Private equity
Mobius said prospects in Viet Nam were better for private equity and the firm currently had a team of people in the country assessing various opportunities.
A pioneer in emerging markets, Mobius is one of the most successful investors in developing Asia. His flagship US$14 billion Templeton Asian Growth has gained 24 per cent since the start of the year, and is the best-performing Asia excluding Japan fund over the past 10 years, according to data from Lipper, a unit of Thomson Reuters.
VIETNAMNEWS, REUTERS
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