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Mobius: Greek banks look ‘particularly’ attractive

Mark Mobius, executive chairman of Templeton Asset Management's Emerging Markets Group.
David Rochkind | Bloomberg | Getty Images

Veteran emerging markets investor, Mark Mobius has offered words of support to Greece's controversial plans to restructure its debt, adding that the long-term investment outlook for the country is good -- particularly in its banking sector.

The fund manager, widely known for his $3.3 billion emerging markets investment trust, said the current events have not resulted in any changes to his investment strategy.

Mobius, the executive chairman of Templeton Emerging Markets Group, backed the new Greek government's attempts to have its debt mountain written down by its European creditors, saying it was the "correct path", and predicted the impact on global markets as a result of discussions would be minimal.

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"What is needed, in our view, is more investment and a path toward recovery. To achieve that, we believe the new government's emphasis on easing the pain to the ordinary Greek citizen is the correct path," he said.

"Also, we think its emphasis on renegotiation of the stringent terms imposed on the country would be positive in terms of injecting more optimism," he added.

Mobius' comments come as Greek finance minister Yanis Varoufakis met German Finance Minister Wolfgang Schaeuble in Berlin on Thursday.

Germany is seen as the strongest opponent among the euro zone countries to any reduction of Greece's 323 billion euro ($369 billion) debt – a key part of the left-wing, anti-austerity Syriza's winning campaign in the general election last month.

The European Central Bank (ECB) also toughened its stance with Greece by restricting financing to the country's banks late Wednesday, sending shares in Greek lenders sharply lower Thursday.

"At this time, we don't plan any changes to our investment strategy as a result of the vote, but we will be watching developments closely. As always, we'll be looking for potential values that may surface in emerging Europe," Mobius said in an investment update Thursday.

"We believe the long-term investment outlook for Greece is good. Greek stocks are generally not overvalued at this time based on our research, although there are significant differences in valuations. Greek banks look particularly attractive to us, if we assume a long-term recovery of the Greek economy," he added.

In a statement on Wednesday, the ECB said it would no longer accept Greek government bonds as collateral for lending money to commercial banks. The move makes access to cash more expensive for Greece's banks.

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Mobius said Greece's ability to renegotiate both the debt arrangements and conditions with the troika of the European Commission, the ECB and the International Monetary Fund will "likely prove extremely challenging."

"February 28 will mark a key milestone; it's the day Greece's financial bailout is due to expire. It remains to be seen if Greece can negotiate an extension or some other measure to avoid default and allow Greek banks to continue to access ECB liquidity," he added.

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