Offshore Capitalist

Mark Mobius: Dubai crisis could send emerging markets down 20%

The Dubai debt crisis could spark a 20% sell off in world markets, according to Templeton Asset Management chairman Mark Mobius.

The emerging markets guru warns that the current recovery was already being put under pressure by the glut of IPOs coming to market in the developing world and the risk aversion prompted by the problems in the gulf is only likely to heighten negative sentiment.

In an interview with Bloomberg TV, he said: ‘[The events in…] the emirates have put a bit of a scare into investors and we are also seeing a huge avalanche of IPOs on emerging markets, which is going to put downward pressure on markets,’ he said.

‘We have felt that there would be a significant correction in what has been an ongoing bull market. It is all coming together now and this may well be the trigger to allow for the market to pull back and a 20% correction is quite possible and we should be ready for that.’

via Mark Mobius: Dubai crisis could send emerging markets down 20% | Fund Selector | Citywire.

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