Mobius Buys Brazil as He Says Emerging Markets to Outperform

Mark Mobius is increasing his bet on Brazil as he predicts a turnaround for emerging markets.

“I’ve told our people that we have to be more weighted on Brazil,” Mobius, chairman of the emerging markets group at Franklin Templeton, said during an event in Sao Paulo. Developing markets will start outperforming their counterparts in industrialized countries again as currency depreciation boosts exports, Mobius said.

Brazil, where the real’s tumble and high interest rates are deterring corporate investment, needs to pursue policy changes including tax and labor reforms, he said. The currency has dropped five straight years while the equity benchmark has fallen for three, the longest rout in a decade, as the government struggles to shore up its finances amid political gridlock and efforts to oust President Dilma Rousseff. Interest rates are at the highest level since 2006 to battle double-digit inflation, which persists even as the economy is estimated to be in the midst of its worst contraction in a century. Read More…

Mobius Buys Brazil as He Says Emerging Markets to Outperform