Mark Mobius, who oversees $53 billion in emerging markets, said the rebound in U.S. stocks signals the world’s largest economy will improve by the end of this year.
“There is a recovery in the U.S. now and it’s pretty substantial already,” Mobius, executive chairman of Templeton Emerging Markets Group, said in a phone interview from Moscow. “That tells you you’re going to see a much better economy. By the end of this year, you’ll see signs of a pick-up.”
Standard & Poor’s 500 Index rose to a record in May and has gained 13 percent this year, outstripping emerging market indexes with Hong Kong’s Hang Seng declining 8 percent and the MSCI Emerging Market Index dropping 11 percent over the same period. U.S. employers added 165,000 workers last month after hiring 175,000 in May, according to a Bloomberg News survey before the Labor Department data on July 5.
“Unemployment at 7 percent is remarkable,” Mobius said on June 28. “Markets are built on a wall of worry but volatility is high and you can have a very rapid change in environment.”
Treasury Secretary Jacob J. Lew said at a conference in Aspen, Colorado last week that while the U.S. economy probably won’t grow as fast as in the 1990s, he’s confident gross domestic product growth can accelerate. A U.S. recovery may spur global growth, Mobius said.
Investments in Africa are increasing, said Mobius, who has about $1 billion in the continent.
“The growth of funds is ongoing,” he said. “We can find lots of opportunities in listed companies.”
Mobius’s Templeton Africa Fund’s largest investments are in Nigeria, South Africa and Egypt, while favored industries include financials, consumer staples and telecommunication services.