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Mark Mobius ‘looking to buy’ in Egypt
Emerging markets investor Mark Mobius is poised to buy Egyptian shares should the stock market continue falling on the back of political instability in the region.
Markets
Emerging markets investor Mark Mobius is poised to buy Egyptian shares should the stock market continue falling on the back of political instability in the region.
Today marks the seventh day of protests, with tens of thousands demonstrators gathering in Cairo while president Hosni Mubarak clings on to power. Yesterday leading Egyptian opposition figure Mohamed ElBaradei told protestors that ‘Change is coming’, according to the BBC.
Regime change could provide a ‘tremendous boost not only to Egypt but to the Middle East’, said Franklin Templeton fund manager Mobius, who is known for spotting investment opportunities when political risk means that others take flight.
‘We’re looking to buy in at the right price’, said Mobius in an interview with Citywire. The stock market would need to drop another 10-15%, said Mobius. Egypt's stock market was closed on Sunday and Monday after the benchmark EGX 30 stock index plunged nearly 11% on Thursday.
He pointed to the potential of Egypt’s young well-educated population, which are leading the uprising. ‘Let these guys loose and the place could go wild. I’m optimistic,’ Mobius said.
Mobius already has investments in banks, telecoms and construction companies in Egypt; ‘these are the ones we like’ he said.
The uncertainty surrounding Egypt weighed on stock markets around the world on Monday. Ratings agency Moody's said it had downgraded Egypt's investment grade rating to Ba2 from Ba1 and changed the outlook to negative from stable.
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7 comments so far. Why not have your say?
Myron Martin
Jan 31, 2011 at 14:58
I like the way Mark Mobius thinks, he is one of the most successful emerging market analysts and seems to recognize that the way to make profits in the market is to BUY (intelligently) when others are fearful and stocks become BARGAINS by historic standards. TIMING is one of the most critical factors and to use a famous analogy from the hockey world, Wayne Gretzky said that the reason for his success was "skating to where the puck was going to be" in other words ANTICIPATION and the analogy applies to stock picking.
The most successful investor is the one who ANTICIPATES a sector or company move and positions himself to benefit, (whether up or down) as opposed to the investor who merely reacts to what has already happened.
report thisanil kumar
Jan 31, 2011 at 15:28
I wonder if there is an uncompilicated ,liquid ETF for EGYPT/Middle East ?
report thisMyron Martin
Jan 31, 2011 at 16:48
Both I Shares and Market Vectors have an Egyptian focussed fund, just Google Egypt ETF for details. Would not be in a big hurry, but when things settle down a bit, picking up some shares at a low could pay off handsomely.
report thisIvor Nestegg
Feb 01, 2011 at 11:14
Perhaps, I am just too cautious (or perhaps not sufficiently well informed!) but how can one possibly predict the outcome of this situation at the moment and make such a statement?
report thisChris Marsden
Feb 05, 2011 at 23:29
It is a bit early to say what is going to happen, by the time it is clearer the prices MAY not be so low! But the market so often over reacts. Although some would say it didn't at first with BP.
Is there any connection with the Returns on the likes of First State India being down 12% in the last month or so? Are there fears for the stability of other countries after Tunis and Egypt to consider reducing holdings?
report thisJohn Stephen
Feb 06, 2011 at 10:13
I've been as a tourist on three occasions and the latest was the last!
The working people who rely on tourism were treating/cheating us dreadfully.
Perhaps the were desperate, I don't know, but never again and I am well
travelled. The present situation is in its infancy.
report thisHotrod
Feb 06, 2011 at 10:39
Moody's have good reasons to downgrade Egypt's rating.
Mobious is just taking a blind gamble. What does it matter to him anyway, any losses he makes can be dissipated through the rest of his holdings, and at the end of the day; it's just someone else's money.
Personally I prefer to rely on the advice given, regarding falling markets, by the eminent Jim Slater in his book "The Zulu Principle"
"If someone threw a safe full of money out of a mult-story office widow would you try and catch it ?"
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