Mobius Buying More Malaysian Stocks; May Sell Indonesian Banks

Investor Mark Mobius said he’s buying more shares of Malaysia’s companies on that nation’s economic growth prospects while possibly cutting his holdings on Indonesian banks and Indian natural-resources stocks on valuations.

He’s purchasing shares of Malaysian palm oil companies, banking, property, health-care and consumer stocks, Mobius, who oversees more than $40 billion at Templeton Emerging Markets Group, said in an interview in Kuala Lumpur today.

“Some of the valuations are rather expensive so you got to be willing to move out of the expensive to the cheaper,” Mobius said, referring to stocks in Indonesia and India. “Malaysia hit a new high but there are still opportunities here. The macroeconomic situation here looks good.”

Indonesia’s Jakarta Finance index traded at 12.3 times trailing earnings last week, the highest since November, according to data compiled by Bloomberg. The BSE India Oil & Gas Index traded at 11.1 times estimated profit, compared to its one-year average of 10.5, the data show.

Indian stocks fell for the first time in five days today, dragging benchmark indexes from a two-year high. The Jakarta Composite Index lost 0.4 percent, snapping a six-day advance.

The benchmark FTSE Bursa Malaysia KLCI Index advanced 10 percent last year, its fourth straight annual gain and longest rising streak since 1989. The gauge climbed 0.1 percent to 1,694.16 to a record close today. Shares in the gauge are trading at 15.1 times estimated earnings, or a 37 percent premium to the MSCI Emerging Markets Index.

Malaysia’s gross domestic product growth may expand by as much as 5.5 percent this year from an estimated 5 percent in 2012, the nation’s finance ministry forecast in a report in September. Growth has been driven by a $444 billion program of private sector-led construction projects announced by Prime Minister Najib Razak in 2010.

“This current administration has been very good for the markets,” Mobius said. “Investors perceive the current government as being business-friendly. That’s been positive generally and will continue to be so.”

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