Mark Mobius is piling into commodity stocks, saying that a rebound in raw-material markets is only getting started after prices sank too far and that gains may be extreme.
Templeton Emerging Markets Group will add more raw-material stocks from Asia’s top economy, according to Mobius, executive chairman of the group, who’s been investing in emerging markets for more than four decades.
Many of them will be good holdings for the long term, he told Bloomberg in an interview, without identifying particular companies.
China’s commodity producers, which were the worst mainland equity investments over almost a decade, have led this year’s rebound as China boosted stimulus and local investors swarmed into the nation’s futures markets, with bets on everything from steel bars to cotton.
The Bloomberg Commodity Index rallied for a second month in April, and assessments are stacking up that the worst of the rout is now over, including from industry veteran Tom Albanese, a former head of Rio Tinto Group.
If Mobius is right it means that perhaps its time to start nibbling on some Nigerian commodity stocks like Seplat which is down 12.8 % in the past year.