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Emerging Markets Outlook

Title Speaker Date


Templeton Emerging Markets Overview - June 2015

Jun 30, 2015

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

  • Global markets finished the second quarter little changed, having seen significant strength in April but a substantial selloff in June. Nervousness around the failure of negotiations between Greece and its creditors on a new rescue package as well as significant volatility in China were the main catalysts for the weakness.
  • Economic data flow was broadly positive, while monetary conditions remained accommodative. Commodity prices were mixed, with energy and agricultural products higher but metals weaker, while international bond yields mostly moved higher.
  • Emerging markets marginally outperformed developed markets for the period, largely due to strong performances in China and Brazil.
  • In China, ongoing measures of monetary easing, rumors of corporate activity involving major state-owned enterprises and moves to further boost links between the mainland and Hong Kong markets led to substantial gains in April. Further easing and reform measures followed, but they were outweighed by the impact of restrictions on margin trading, large numbers of initial public offerings that reduced market liquidity, the exclusion of China “A” shares from MSCI indexes and worries about stock valuations that resulted in profit-taking. However, China still finished the quarter solidly ahead.
  • In Brazil, market-friendly reforms at state-owned oil company Petrobras and a substantial program of transport-related infrastructure investment were among a number of measures undertaken by the government. Although economic data remained rather weak, investors welcomed the positive tenor of economic policy to send share prices higher.
  • Other strong markets included Hungary and the United Arab Emirates.
  • In contrast, Indonesia was particularly weak as disappointing corporate results and some concerns about budgetary trends and the direction of government policy led to caution among international investors.
  • In Malaysia, the impact of new taxes and worries about a troubled state investment fund weighed on the market.
  • Other Asian markets, including South Korea and India, also retreated, as did Egypt.

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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 June 30, 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 June 30, 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 franklintempleton.com. Please carefully read the prospectus before you invest or send money.

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