Double-Dip Fear Is a 'Very Good Thing': Mobius
Fears of a double-dip recession are good for markets, as this will pressure global central banks to stay liquid, said Mark Mobius, executive chairman of Templeton Emerging Markets Group.
"They're going to have to print and they're going to have to continue money supply increases, and that's good for the global market because it means there's more money available globally," Mobius said on CNBC Thursday.
The bigger worry on Mobius' mind right now is the rapid rise in IPO activity, as that could eventually put downward pressure on prices.
"Unless investors finally say 'look, enough is enough we want better prices'... I think there's going be a downward pressure on prices of new IPOs."
Over $90 billion has been raised so far this year through initial public offerings in emerging markets, Mobius noted, far exceeding the $89 billion raised in 2009.
Opportunities in Risky Markets
While Wall Street stocks have wiped out their gains for the year, Mobius highlighted that markets in Pakistan, Thailand and Russia have risen compared with other markets.
"These are perceived to be very, very risky but the valuations are good because we see going forward, a positive trend in these markets. We think the year will end up rather than down."
Mobius said H-shares, or Hong Kong-listed Chinese companies, and red chip stocks, which are China firms incorporated outside of China, continue to look attractive as their domestic China-listed counterparts face foreign exchange controls and liquidity problems. However, he warned that the tremendous amout of IPOs taking place there could have a "depressing effect".
He also sounded a note of caution about Chinese property prices, saying he expects them to fall more than 10 percent on the mainland, particularly the coastal areas in the main cities along the coast.
That's one of the reasons why Chinese banks are raising more money because they see a flood of non-performing loans coming down the pipe, Mobius said.
However, the growth rate in China will continue to stay at a high level, he added, thanks to the government's efforts to keep the growth rate at a higher level.
"I still see 8-9 percent growth for China this year."
- Watch Mobius' Interview On His Investment Strategy