(Bloomberg) — Mark Mobius, whose name has been synonymous with investing in developing countries for a third of a century, isn’t planning to slow down even as he steps back from the firm that bears his name.
The 87-year-old money manager said he’s busier than ever as he looks to set up a new venture in Dubai.
The firm will be “involved in investment,” he said, declining to provide specifics because he said it’s still in the negotiating stage. “It’ll be something quite exciting in emerging markets,” Mobius said in a Zoom interview from Bengaluru, a technology hub in India, one of the countries he said he’s most bullish on for the future.
Dubai, where Mobius has lived for the past three years, has emerged as a favored destination for investment banks, asset managers and hedge fund traders, who are drawn by its ease of doing business, tax-free status and allure as a global travel hub. It’s also a more friendly time zone for portfolio managers who have global investments spanning North America to Asia.
Mobius, as ever, is trotting the globe in search of listed companies to bet on, as well as opportunities in private equity, he said. London-based Mobius Capital Partners LLP — which he co-founded in 2018 after three decades at Franklin Templeton Investments — is “all set and running well,” and it was time for him to move on, he said.
Starting in 1987 when investing in developing countries was still a relatively novel concept, Mobius helped to grow Franklin Templeton’s emerging-markets group to about $40 billion from $100 million.
Less than four months after leaving the firm, he set up his own asset-management company to invest in emerging and frontier markets. Shares in London-based Mobius Investment Trust, managed by Mobius Capital Partners, have risen about 30% since inception in 2018. That compares with a 55% gain on the US benchmark S&P 500 index, or a 6% loss for the MSCI emerging-market benchmark.
Mideast Bull
Mobius said the biggest risk on his mind, for now, is war, with the conflict in Ukraine and concerns that the fighting between Hamas and Israel could escalate into a regional conflict clouding the global economic outlook.
Despite that, he’s bullish on the Middle East, and has already been buying and selling properties in Dubai, where he expects prices to increase 15% annually over the next few years. He’s holding on to two luxury apartments facing the Burj Khalifa — the world’s tallest building — and says he’s also thinking of investing in financial services firms in the emirate, as well as snatching up shares from family-owned businesses when they become available, as he expects they will.
The region is setting itself up for a future beyond oil and that’s most evident in Dubai, Mobius said.
“Other countries in the Middle East are following soon,” he said. “It’s definitely a big transformation.”
In geopolitics outside of the Middle East, the “big issue” is Taiwan, the self-ruling democracy over which China claims sovereignty and which it has not ruled out seizing by force, he said. But that hasn’t deterred him from naming Taiwan as one of his top picks because it offers “access to the Chinese market,” he said.
“The risk is worth taking because the chance of China wanting to have a military attack on Taiwan is not great — simply because they need the resources that Taiwan has,” Mobius said. But “you must remember that accidents happen, so you have to be ready for them.”
‘Big Disappointment’
The “big disappointment” for him over the years has been witnessing the common “mistake” of rigidly following benchmark gauges, Mobius said. Benchmarking against key developing-nation equities indexes has meant money lost as Chinese stocks fell on economic struggles, property-sector travails and geopolitical tensions.
Chinese firms account for 27% of the widely followed MSCI Emerging Markets Index, compared with less than 4% for Russia before the country was removed following its invasion of Ukraine last year and international sanctions against it.
“The index is not the whole story,” Mobius said. “Do your individual stock and country picks and don’t follow the index because otherwise you’re gonna get caught up in situations like you already had where one country with such a heavy weighting will kill your portfolio.”
Mobius, who won a reputation for sniffing out stocks that are undervalued relative to their growth potential, said diversification is “really the only way you can escape any potential disaster.”
Too Much Debt
Investors will also need to be more selective amid signs that US interest rates may remain elevated, he said. Debt-laden countries will struggle to repay, leaving them “in an incredible crisis for quite a while.” China’s debt load continues to weigh on growth, while Argentina and Nigeria are also vulnerable. In comparison, other Asian economies have “learned their lesson” and have been more cautious, he said.
“Now’s the time when you’re separating the men from the boys,” he said. “You’re going to have to look very carefully at each individual country to see which ones are in heavy debt and which ones are going to be in good shape.”
Mobius is famed for some prescient big calls: correctly predicting the start of a bull market that began in 2009, snapping up bargains during the Asian financial crisis after Thailand floated its currency in 1997, and buying Russian stocks when panic selling took hold there in 1998.
He was also one of the first institutional investors to identify Africa as a promising frontier market, setting up the Templeton Africa Fund in 2012. In 2021, he predicted a “50-year rally” in Indian stocks.
Born to German and Puerto Rican parents in Hempstead, New York, Mobius got his Ph.D. from the Massachusetts Institute of Technology. He said he plans to publish two books soon: one about what central banks are doing to develop their own digital currencies and the other a guide for building wealth.
“I’m going to be as busy as ever,” he said. “It may even be busier.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
