Emerging markets still interesting

Some say Brazil is a little frothy though..

Mobius: BRIC Stocks Will Soar 40 Percent
Friday, November 20, 2009 10:09 AM
By: Dan Weil

Emerging market investment legend Mark Mobius predicts stocks in Brazil, Russia, India and China (BRIC) will jump 30 to 40 percent within three to four years.

Strong economic growth and low government debt levels in the BRIC countries will boost corporate earnings, the chairman of Templeton Asset Management told Bloomberg.

Rising earnings, in turn, will boost stocks, he says.

Mobius says he’s buying stocks in all emerging markets, particularly the BRICs.

“BRIC countries are really at the top,” Mobius said. “You can see BRIC countries have been best performing.”

Russia’s RTS Index has rocketed 135 percent this year, the biggest gain among 89 markets followed by Bloomberg.

Brazil, China, and India have gains of more than 75 percent so far this year.

Emerging markets as a whole are likely to register zero change in their GDP this year, Mobius says. While that number isn’t impressive on its face, it compares to a 4 percent contraction in developed economies, Mobius says.

He acknowledges that the BRIC bull markets are subject to sudden, violent corrections, but says that’s the time to buy.

Mobius’ favorite sectors are consumer-related and commodity stocks.

He’s not the only investor who’s bullish on emerging markets.

A new Bank of America survey shows that 42 percent of investors plan to increase their investments in that area.

Fifty-three percent of investors already are over-weighted in emerging markets, according to the report.