Mark Mobius, who oversees $50 billion at Templeton Emerging Markets Group, says potential sanctions that would prevent the transfer of money to and from Russia would be a “game changer” for investors.
Mobius, executive chairman at Templeton Emerging Markets, said he sees “excellent bargains” in the Russian equity market, especially in the oil and mining industry.
“The fear is there,” Mobius said in an interview in Bucharest today. “If the U.S. imposes sanctions for transfers toward Russia then that changes the whole picture, then you’re trapped in, similar to what happened in Malaysia during the Asian crisis.”
The Obama administration imposed sanctions today on seven Russian officials and 17 companies linked to Russian President Vladimir Putin’s inner circle involved in banking, energy and infrastructure. The list includes Igor Sechin, OAO Rosneft chief executive officer, and banks such as InvestCapitalBank and SMP Bank. Russian stocks rallied from a six-week low, while bonds and the ruble rose as the nation’s largest banks avoided U.S. sanctions.
U.S. companies are prohibited from doing business with the individuals and entities on the list, and all assets of those designated that are within the American jurisdiction must be frozen, according to the nation’s Treasury.
Mobius said an exit is not planned from Ukraine equity holdings because the companies are still profitable. “Some of these companies benefit from the devaluation of the hryvnia,” he said.
The hryvnia depreciated 2.2 percent to 11.75 per dollar by 5:17 p.m. in Kiev, extending its drop this year to 30 percent, the most among more than 100 currencies tracked by Bloomberg.