Mobius may invest in Dubai stocks if prices are `reasonable'. He also sees opportunities in the BRIC

FRANKFURT (MarketWatch) -- Mark Mobius, the veteran emerging-markets investor, sees opportunities in several markets in the Middle East, including Dubai, where he may consider investing if prices decline to "reasonable" levels.

Dubai has been in the spotlight recently after state-owned conglomerate Dubai World sought a standstill on its debt, roiling global financial markets.

"Yes, we would consider investing in Dubai and Abu Dhabi if the prices come down to levels which we think are reasonable," said Mobius, executive chairman of Templeton Asset Management.

"The companies in Dubai will continue to operate and could present good earnings opportunities," he told MarketWatch in e-mailed comments. "Dubai''s status as a trading and tourism hub will not vanish."

The stock market in Dubai has tumbled in the past few sessions, as investors spooked by debt worries rushed to sell shares.

The DFM index, the benchmark for the Dubai Financial Market, fell 6.1% on Tuesday after closing down 5.8% in the previous session. Abu Dhabi''s General index dropped 3.4%.

The DFM index has fallen 23% over the last four weeks, according to data from the DFM Web site.

"Yes, we would consider investing in Dubai and Abu Dhabi if the prices come down to levels which we think are reasonable."

Mark Mobius, executive chairman of Templeton Asset Management
"The Dubai problems had some impact on markets globally, particularly in Asia and Europe, because a number of banks are exposed to Dubai debt and several international construction companies have had large contracts in Dubai," Mobius said.

"Most markets, however, rebounded quite quickly after it was ascertained that damage to companies outside of the Gulf region would be very limited," he added.

Mobius said he expects corrections to occur in any bull market. He views them as "quite healthy because to us it means that valuations will come down to more reasonable levels."

Volatility is part of investing in emerging markets, making it very important to have a long-term investment perspective, he said.

"We view these opportunities as a time to continue holding quality investments and to increase our holdings in selected stocks that we believe, over a five-year time frame, will continue to show stable financing and good earnings," Mobius said.

A spokeswoman for Templeton said Mobius cannot comment on what he is actively buying and selling.

But globally, Mobius said he finds the most buying opportunities in Brazil, Russia, India, and China -- the so-called BRIC group -- as well as in a number of frontier markets such as Vietnam and Nigeria.

http://www.marketwatch.com/story/mobius-may-invest-in-dubai-if-prices-fall-enough-2009-12-08