PARIS: Templeton Asset Management's Mark Mobius is still bullish on China despite data this week showing manufacturing there was losing steam.
The benchmark Shanghai Composite Index has lost 28 per cent this year while Hong Kong's Hang Seng Index is down 9 per cent, falls Mobius said were a good buying opportunity as the correction removed some of the froth in valuation levels.
"In some ways we are very happy with the recent correction because things are getting cheap again ... We are still buying in China," Mobius, a prominent emerging markets fund manager, said on Friday.
Chalco, PetroChina and Denway Motors are among the top holdings of Templeton Emerging Markets which has about $40 billion invested in emerging and frontier equities.
Mobius also said in a news briefing that China's economy was still booming and consumption in the world's third largest economy would continue to rise at a fast pace.
"Our projection for growth in China is about 10 per cent. Sure, it could come down, but 9 per cent is still terrific, and even 8 per cent is still good," Mobius said. The sharp drop in Chinese stocks this year reflected worries over the momentum of the economy, he said, but was also the result of the country's massive IPO pipeline.
"There has been too many new shares coming in the market, too much money being drained out," he said. RUSSIA Mobius was also bullish on Russian stocks, citing the country's growth outlook and stocks' relatively low price-to-earnings ratios. "We saw Russian stocks at very reasonnable levels, and have found good opportunities.
Actually, we have been doing more in Russia than anywhere else lately," he said. "Russian companies have restructured their debt and are in a position to start growing by making capital investments. That will produce results in 2011 and 2012." Templeton Emerging Markets' top holdings in Russia include shares in Gazprom, LUKOIL, Rostneft and Uralkali.
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