Valuations attractive, further dips likely: Templeton AM

Mark Mobius, MD, Templeton Asset Management, said there is severe pain in US markets, especially financials. He feels investors have to be ready for further downturn in markets. "We are not overly pessimistic about emerging markets as the economies are still fine. Indian valuations are attractive. We are looking at picking stocks."

Excerpts from CNBC-TV18's exclusive interview with Mark Mobius:

Q: What is the outlook on what is happening in the US? Are you expecting some kind of implosion of any financial institution? Are you expecting further pain from that economy or stock market? What may be the ramifications for emerging markets? Are you seeing severe pain in emerging markets as well?

A: There is severe pain in the US. When you have regional banks going bankrupt and not being able to meet their obligations, then that is a very serious matter. That situation impacts globally, because the US is exposed so much to the globally economy. We are already seeing the impact on emerging markets. They are having problems.

Everyone in the past was asking me about relationships between the US and other markets. The reality is that there is tremendous amount of interplay between these markets. So, we have to be ready for further downturns in these various markets.

One must keep in mind that emerging markets are continuing to grow at a very good pace. Economic growth in these markets, including India, is good. So, we should not be overly pessimistic. Stock prices are one thing and the reality on the ground is another. The ground reality is that many of these countries are doing very well. The economies are humming along.

The impact of what is happening in the US is to the greatest extent very psychological and not real. So, the economies of these countries will be impacted.

Q: Would you be picking up for instance in a country like India? Are you buying at current levels?

A: We are looking very carefully because Indian stocks are now getting very attractive in valuation terms. The problem is that other markets are becoming very attractive. Prices are coming down everywhere as in Poland. So, we have to make comparisons all over and then make a decision on what we want to do.

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