Tuesday, January 5, 2010

Templeton: Emerging Stocks to Lose 20% as Mobius Sees IPO Backfire

Emerging markets are attracting more money from initial public offerings than industrialized nations for the first time ever, a warning sign to Mark Mobius that the record rally in the shares may turn into a 20 percent decline.

Faster economic growth may help China, India and Brazil produce the biggest increases in IPOs and almost double sales to $200 billion worldwide, according to Matthew Johnson, the New York-based head of the global-equities syndicate at Barclays Plc. Poland alone may offer more than $10 billion of state-owned companies, according to estimates by UniCredit SpA.

Mobius is a savvy value investor and recognizes a huge bullish consensus on Emerging Market Equities. Those are voltile markets and a big sell off would be a great opportunity. i believe I am going to place stops below the Dec lows to pull some money off the table for  buying power on a setback.

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