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Emerging Markets Outlook

Title Speaker Date

Templeton Emerging Markets Overview, October 2015

Nov 20, 2015

Featuring:  Mark Mobius, Ph.D., Executive Chairman, Templeton Emerging Markets Group

  • Global markets rebounded from their third-quarter weakness during October, with most individual markets and regions posting solid gains.
  • Economic and policy news from developed markets was somewhat mixed, with the US Federal Reserve making unexpectedly hawkish signals on interest rates in spite of muted jobs data, but the European Central Bank hinting at plans for further quantitative easing even as growth indicators in the eurozone appeared to strengthen.
  • The overriding factor in the market recovery for emerging and developed markets appeared to be an easing of the global growth concerns that had been ignited by poor economic data and stock market weakness in China.
  • Although Chinese industrial production and fixed asset investment data for September remained muted, third-quarter gross domestic product growth was ahead of market forecasts, while equity valuations at levels well below historic norms and further cuts in interest rates and the required reserve ratio by the People’s Bank of China combined to boost both local and global investor sentiment. Both China and Hong Kong recorded strong gains for the month as bargain hunters returned to the market.
  • Asia overall also showed signs of reviving economic growth. Indonesia was the strongest market in the region, reviving from severe third-quarter weakness on increased stimulus measures and hopes for increased US investment following President Widodo’s maiden visit to the United States.
  • South Korea and Taiwan were among a number of technology-heavy markets to see signs of improving manufacturing output and orders as destocking trends within the information technology sector eased.
  • India, however, was the weakest market in the Asian region, posting only a small gain in October, affected by subdued economic data and an indifferent start to the quarterly results season.
  • Among other emerging markets, Central European and Middle Eastern markets saw diverse returns, with notable strength for Turkey (in the run up to elections) and Greece (following the conclusion of bank stress tests), but rather weak returns from Central Europe, where Polish elections saw an administration supportive of the European Union and international businesses replaced by a more nationalist government.
  • In the Middle East, signs in a number of markets that weaker oil prices were feeding into slowing domestic activity prompted investor caution.
  • In Latin America, ongoing political difficulties and continued weak domestic economic data limited gains for Brazil, but Mexico was stronger as a resilient services sector buoyed economic progress. In the frontier market of Argentina, improving economic growth data and an unexpectedly strong performance for the more market-friendly candidate in the first round of presidential elections led to a dramatic market surge.

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Important Legal Information

A note to our readers: Given the rapid changes that can take place in global markets, it is often difficult to provide up-to-date materials that address the most current situations. The following update is valid only as of October 31, 2015.

The significant growth potential offered by emerging markets remains accompanied by heightened risks when compared to developed markets, including risks related to market and currency volatility, adverse social and political developments, and the relatively small size and lesser liquidity of these markets.

The information provided is not a complete analysis of every material fact respecting any country, industry, security or investment. Opinions expressed are those of Dr. Mobius and are subject to change without notice. Statements of fact have been obtained from sources considered reliable. Because market and economic conditions are subject to rapid change, his analyses are valid only as of October 31, 2015. His opinions are intended to provide insight as to how he analyzes securities and are not intended as individual investment advice. Performance information is historical and should not be considered predictive of future results. All securities investments fluctuate and involve risks.

Investors should carefully consider a fund’s investment goals, risks, charges, and expenses before investing. To obtain a summary prospectus and/or prospectus, which contains this and other information, talk to your financial advisor, call us at (800) DIAL BEN®/342-5236, or visit Please carefully read the prospectus before you invest or send money.

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