Investment guru likes Turkish, Russian, Polish stocks

“Turkey would be at the top, then Russia and Poland as the most attractive equity emerging markets in the region,” Mobius, executive chairman of Templeton Asset Management handling some $40 billion in emerging assets, told Reuters in an interview. Mobius said soon-to-be-privatized power company Enea and oil company PKN Orlen were among “must have” stocks in Poland, adding another local refiner Lotos could be added to that list if it merged with bigger peer PKN.

Templeton, which holds $400 million in Polish stocks, owns less than 5% of PKN as well as stakes in satellite navigation company Techmex and ING Bank Slaski, a unit of ING Group, he said. Mobius added Polish banks were unattractive at the moment because of their heavy mortgage lending and said Templeton Asset Management, an arm of Franklin Resources Inc, prefers their Thai and Brazilian peers. “Anything related to oil and commodities is of interest to us,” he added.

Mobius said the slump in Polish stocks this year should not discourage the Warsaw government from floating shares in state-owned companies after privatizations stalled under its predecessors. “Privatizations may not be timed well enough but this might be a good time to go for privatizations,” Mobius said. “In the future (the government) might get a better price but it’s not clear that’s the last we’ve seen of declines.”

 
POSTPONED SELLOFFS

Poland’s centre-right cabinet had aimed to float stakes in state companies to kick-start the privatization program, hoping to raise as much as 5 billion zlotys ($2.41 billion) this year. But it has already postponed the $1.4 billion sale of power company Enea, this year’s biggest planned initial public offering in Warsaw, and Bank BGZ as major indices shed almost a third of their value this year.

Mobius said state-controlled PKN Orlen should play a more regional role among oil companies, adding that political meddling was still a big problem for the refiner. Last month, a deputy treasury minister told Reuters PKN should base its strategy on expanding its upstream business and investing in the chemical sector. “It’s no time to be buying oil fields as it’s too expensive,” said Mobius. “Maybe PKN should look into coal gasification as an alternative.”

Mobius said he had second thoughts about a possible merger between Austrian oil and gas company OMV and Hungary’s MOL after he initially gave support for the bid. “We are ‘neutral’ on the possible tie-up,” he said. “I thought it made sense but it all depends on what kind of assets MOL will have to sell ... for the merger to happen.” (Reuters)