Veteran emerging-markets investor Mark Mobius said Turkey’s efforts to prop up stocks as they reopen following an earthquake-fueled rout could have the “opposite” impact.
(Bloomberg) — Veteran emerging-markets investor Mark Mobius said Turkey’s efforts to prop up stocks as they reopen following an earthquake-fueled rout could have the “opposite” impact.
“We can understand the government’s desire to limit the impact of the disaster on the market as a whole,” Mobius said by email in response to Bloomberg’s questions on Wednesday. “However, such interventions often have an impact opposite from what is intended.” He still has a longterm positive outlook on the country’s stocks.
Turkish stocks soared 9.9% on Wednesday, outperforming all other major world indexes in their biggest gain since 2008, after returning from a week-long suspension as the state threw its weight behind the market to avoid a repeat of last week’s selloff. The earthquake-hit country channeled billions of liras from state institutions, including the sovereign wealth fund, to boost markets.
READ: Turkish Support for Stocks Sparks $1 Billion Buyback Scramble
“Brokers, of course, want market activity and thus may exaggerate news reports to create market turnover. We are long-term holders and don’t react to such short term news and market activity but take a long terms view,” said Mobius. “So our outlook is positive. The Turks have survived many disasters over their history and have shown a incredible resilience and creativity.”
Mobius Capital Partners LLP’s emerging markets fund and investment trust have $250 million in assets under management.
–With assistance from Thyagaraju Adinarayan.
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