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Bullish on Europe, Looking at Austria, Romania: Mobius

Investors are waking up to the reality that the European Union and the euro will survive, Mark Mobius, the executive chairman of Templeton Emerging Markets Group told CNBC on Friday. He added that he was looking to invest in the region, particularly in Eastern Europe.

Mark Mobius, chairman of Templeton Asset Management Ltd., speaks during a news conference in Kuala Lumpur, Malaysia, on Tuesday, Oct. 12, 2010. Malaysia's stocks are not as cheap as other emerging markets and dividend yields are lower, Mobius said. Photographer: Goh Seng Chong/Bloomberg via Getty Images
Bloomberg
Mark Mobius, chairman of Templeton Asset Management Ltd., speaks during a news conference in Kuala Lumpur, Malaysia, on Tuesday, Oct. 12, 2010. Malaysia's stocks are not as cheap as other emerging markets and dividend yields are lower, Mobius said. Photographer: Goh Seng Chong/Bloomberg via Getty Images

"Reforms are taking place now in Europe, the effects will kick in next year, and then you're going to see a much stronger regional community," Mobius said in Singapore.

According to him, the takeover of companies in Europe by Chinese and Middle East investors was another factor that would drive a recovery in the region.

Mobius said he recently returned from Austria and Romania, where a recovery was already under way. In Austria, he said, he was looking at banks that have all their holdings in Eastern Europe.

Mobius added that he liked the Russian market given strong commodity prices and growing consumer demand. Templeton has investments in the country's oil, gas and mining sectors via their open-ended mutual funds, but the big opportunity for the future, according to Mobius, was in consumer products.

"On our private equity side we've made very good money in companies involved in retail, trade, in automobile tires, in fruit drinks and that sort of things."

Emerging Markets to Outperform

Mobius also said the increased confidence over Europe and greater liquidity would help emerging market stocks post a strong recovery in 2012.

He blamed the flood of initial public offerings (IPOs) in emerging markets during 2009 and 2010, which he said took $540 billion out of the secondary markets as the primary reason emerging market stocks suffered recently. He said a reduction in IPO activity would help these stocks rally.

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