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Templeton Emerging Markets Fund - News
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Sector Changed
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Thursday, 20 June 2019
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Official Announcement
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The fund changed sectors from Global--Equity--General to Global--Equity--Emerging Markets on 20 Jun 2019
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Templeton Emerging Markets comment - Jul 06
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Monday, 28 August 2006
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Fund Manager Comment
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In July, Templeton Emerging Markets Fund slightly outperformed its benchmark, returning a net +2.12% (in U.S. dollars) versus +1.50% for the S&P/IFCI Composite Index.
Stock markets in emerging market countries were rocked by growing violence in the Middle East, high oil prices, tightening measures in China and concerns over North Korea's nuclear missile program. However, comments from U.S. Federal Reserve Chairman Ben Bernanke that hinted an end to interest rate rises in the near future provided emerging markets with some relief. Eastern European markets were the top performers during the month. The Polish market recorded double-digit returns as political instability subsided. Latin American markets also ended the period in positive territory, while Asia recorded mixed results as concerns over slowing global growth impacted market sentiment. Turkey's market rebounded in July as government and central bank efforts to stabilize the country's financial markets bore fruit.
A search for oversold stocks led the fund to increase its investments in selected markets in Europe, Asia and Africa, where recent market corrections made valuations more attractive. In Europe, significant purchases were undertaken in Turkey, Hungary and Finland. These purchases subsequently increased the fund's exposure to the wireless telecommunication services, household appliances and tires and rubber sectors. In Asia, the fund added China "H" and "red-chip" shares, while some purchases were also undertaken in South Africa. The fund reduced its investments in Mexico, South Korea and Taiwan as selective stocks in those markets reached their sell targets. This reduced the fund's holdings in diversified banks, brewers and computer hardware companies.
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Templeton Emerging Markets comment - Sep 05
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Friday, 18 November 2005
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Fund Manager Comment
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For the three-month period ending September 30, 2005, the Templeton Emerging Markets Fund returned a net 12.7% (in US dollars) under-performing its primary benchmark, the S&P/IFCI Composite Index, which returned 17.8%.
A favorable macroeconomic outlook, and continued investor interest resulted in a strong quarter for emerging markets performance. Eastern European markets continued to outperform their peers as greater integration with Western Europe, subdued inflation, and falling interest rates resulted in a favorable investment environment. South Africa and Turkey also ended the three-month period with substantial returns. Latin American markets returned strong gains as the region's risk profile continued to improve. While Asia recorded positive returns, the region as a whole under-performed its emerging markets peers due to concerns about high global oil prices, and their impact on foreign reserves. Most Asian countries are net-oil importers.
During the quarter, the Fund increased its exposure to most countries in the portfolio. The Fund's largest investments were made in Asia, and more specifically, Taiwan, Thailand, China "H" shares, South Korea and Singapore. This resulted in an increase in the Fund's exposure to diversified banks, wireless telecommunications services, and integrated oil and gas companies. Substantial purchases were also undertaken in South Africa, Brazil, and Turkey, as selective stocks triggered buy targets. Alternatively, the Fund sold some stocks in Austria, Poland, and the Philippines, as sale limits were reached.
Outlook
As of end-September, one of the Fund's top 10 holdings included Banco Bradesco. From its humble beginnings as a small bank serving the agricultural community in Sao Paulo, Bradesco is now one of Brazil's largest financial conglomerates. The bank provides a wide range of banking and financial services. These include asset management, insurance, wholesale banking, full retail operations, credit card, general corporate and personal lending.
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Templeton Emerging Markets comment - Jul 05
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Wednesday, 14 September 2005
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Fund Manager Comment
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Emerging markets posted strong gains in July, with the S&P/IFCI Composite index returning 6.9% (in US dollars). Eastern Europe recorded the strongest performance, with Hungary and Russia registering double-digit returns. Asia also performed strongly, with the MSCI Asia (ex Japan) index up 6.5%. This strong performance was not, however, uniform across the region. South Korea outperformed as Standard & Poor's unexpectedly raised the country's debt ratings, while China benefited from continued strong economic growth. Conversely, political turmoil took a toll on the Philippines while high oil prices and slowing economic growth hindered Thailand's performance. The release of positive economic data in the U.S. supported financial markets in Latin America, while South Africa and Turkey outperformed their emerging markets counterparts during the month.
During July, the Fund increased its holdings in Asia, Europe and Latin America. In Asia, the largest purchases were made in Taiwan, Malaysia, Thailand and South Korea, all countries where the Fund continued to find value stocks trading at attractive valuations. In Latin America, the Fund increased its exposure to Brazilian equities as the country continues to benefit from greater investor attention. In Europe, investments were made in Hungary, Portugal and Sweden. The Fund's exposure to Britain also grew due to investment in one of the largest banking and financial services organizations in the world. The Fund's largest sales were completed in India and South Africa as the Fund reduced its exposure to oil & gas stocks. Selective sales were also made in Turkey and Singapore as sell targets were reached. At end- July, the Fund's top three sector allocations were banks, semiconductors and wireless telecommunications services.
Benefiting from China's growing demand for energy, Petrochina is China's largest oil and Gas Company in terms of reserves. The company has also been diversifying into marketing and downstream activities. Petrochina was state owned before it was restructured in late 1999 and listed in Hong Kong and NYSE (ADRs) in 2000. Although its oil reserves in the northern regions are relatively mature, Petrochina is rapidly expanding its gas output and improving its gas pipeline infrastructure. The company is also steadily expanding its service stations and downstream activities. The company possesses over 70% of China's oil and gas reserves, but just about 20% of downstream activities.
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Templeton Emerging Markets comment - Jun 05
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Tuesday, 16 August 2005
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Fund Manager Comment
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After a minor correction in April, emerging markets put in a positive performance again in May and June. The S&P/IFCI Composite index ended the quarter up 4.84% in U.S. dollar terms. Latin American markets continued to perform strongly. The S&P/IFCI Latin American index gained 9.0% in U.S. dollars terms during the quarter. Part of the out-performance was due to a weaker US dollar against major Latin American currencies. The reverse was true for Eastern Europe and South Africa, as currency movements reduced U.S. dollar gains in the region. Continuing investor interest in Asia also resulted in that region ending the quarter higher. In Turkey, expectations for reforms and additional funding from the International Monetary Fund (IMF) and World Bank resulted in the MSCI Turkey index gaining 7.4% in U.S. dollar terms.
During the period, the Fund made investments in Russia's metals and wireless telecommunications sectors. In Latin America, additional investments were made in Mexico. We expect to see better earnings growth in Mexico in the coming years as economic conditions in the country continue to improve. The Fund also increased its exposure to Thailand, Taiwan and Malaysia. In South Africa, some switching was undertaken, which led to an increase of our holdings in the banking industry and sales in the brewery sector. The largest sales were seen in Europe - more specifically, Hungary, Poland, Greece, the Czech Republic and Belgium. This resulted in a reduction to the Fund's exposure to brewers and the oil & gas sector. Some stocks in Brazil, South Korea and China "Red-chip" shares were also sold as sale targets were reached.
An interesting stock in the portfolio is China Mobile. Established in September 1997 as part of the restructuring of the cellular businesses of the Ministry of Post & Telecom in China, China Mobile is the leading mobile services provider in the country. Operating in potentially, the world's largest telecommunications market, the company's growth prospects are enormous. China Mobile has 220 million subscribers, with an overall market share of approximately 65% in all the cities and provinces in which it has operations. Competition is also limited, with only one other key player in the market. Moreover, the company's strong position allows it to enjoy certain economies of scale and bargaining power in equipment purchasing.
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Templeton Emerging Markets comment - Mar 05
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Friday, 29 April 2005
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Fund Manager Comment
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A weak March resulted in many markets giving back some of the strong gains recorded in February. The MSCI Emerging Markets index ended the quarter up 1.9% as opposed to the 9.1% gain for the first two months of the year. For the three-month period, the strongest performances were seen in Eastern Europe. Latin American and Asian markets saw mixed performances, while a weakening Rand in March led the South African market to record negative returns in US$ terms.
On March 28, another powerful earthquake hit the northwestern coast of Sumatra, Indonesia. This aftershock of the December 26, 2004 earthquake measured 8.7 on the Richter scale. Its epicenter was close to that of the original quake but it did not produce the same devastating tsunamis that killed over 200,000 victims in December. The current death toll is about 400 but could be as high as 2,000 as relief workers reach more of the affected areas. Much of the region affected is extremely remote and highly inaccessible. The economic impact on Indonesia and the rest of the region is very limited.
During the quarter, the Fund increased its holdings in Asia with major investments undertaken in South Korea, Taiwan and Thailand. In Europe, the largest purchases were seen in Russia and Poland, while Latin American additions included Brazilian and Mexican companies. These purchases resulted in a greater exposure to the banking, multi-sector holdings and semiconductors sectors. The diversified metals & mining, wireless telecommunications services and precious metals & minerals sectors also saw additions during the period.
The Fund's sales were just as widespread as its purchases reflecting Templeton's ground-up focus on individual stocks as opposed to a top-down country or sector allocation. The largest sales were observed in South Africa, Belgium, Greece and Argentina. As a result, the Fund's exposure to brewers and construction materials decreased during the three-month period. As of end-March, the top three sectors were diversified banks, semiconductors and brewers.
Well positioned to benefit from the continuing high commodity prices, Anglo American Corp. is one of the Fund's top three holdings. An international natural resources group, Anglo American has operations in sixty-four countries (mainly emerging markets) covering eight principal product groupings, gold, platinum, diamonds, coal, base metals, industrial minerals, paper & packaging and ferrous metals. The group also has a 45% stake in De Beers. Anglo is the global leader in diamonds, gold and platinum and is amongst the top in most of its other business operations. AnglogoldAshanti, 51% owned by Anglo American, is one of the world's largest gold companies. It operates throughout Africa, in Australia and North and South America. Anglo Platinum, 76% owned by Anglo American, is the world's largest producer of platinum as well as substantial quantities of rhodium and palladium. DeBeers is the world's leading producer and marketer of diamonds. The company has interests throughout Africa, Europe and North America. Anglo Coal, 100% owned by Anglo American, is the fifth largest private sector producer of coal in the world and a major exporter. Anglo Industrial Minerals is the largest producer of aggregates and asphalt and the second largest ready-mix concrete producer in the UK.
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Templeton Emerging Markets comment - Feb 05
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Wednesday, 23 March 2005
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Fund Manager Comment
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Emerging markets had a good month with the MSCI Emerging Market index returning 8.8% in US$ terms. Latin American and Eastern European markets outperformed the other areas, returning double-digit gains as both regions continued to attract new investments. Asian markets saw mixed performances with stronger returns in South Korea and Thailand while Indonesia and Singapore lagged the region. Supported by currency gains, the Turkish market returned 8.3% in US$ terms, while the South African market bounced back after a pause last month.
In February, the Fund continued to invest across the globe, using Templeton's ground-up investment philosophy focusing on individual stocks rather than a top-down country or sector strategy. The largest purchases were made in South Korea, Taiwan, Russia and Mexico. This resulted in an increase in the Fund's exposure to the banking, metals & mining, multi-sector holdings and semiconductors sectors. The Fund's largest sales were brewers in Brazil and South Africa as well as telecom companies in the Czech Republic and Thailand as sell limits were achieved. As of end-February, the top three sectors were banks, semiconductors and brewers.
Well positioned to benefit from regional expansion/consolidation, MOL is a market leader in Hungary. A monopolist in the country's wholesale gas industry, MOL is a leading integrated oil and gas group in Central and Eastern Europe. MOL is the only importer of gas into Hungary and is responsible for sales to industry and retail gas distributors. The oil sector within Hungary is completely deregulated and MOL operates in a competitive environment. The company is fully integrated and has its own production fields within Hungary. MOL has one of the highest quality refineries within all of Eastern Europe. Its retail network has an approximate 40% market share within Hungary and continues to expand internationally (above to 800 filling stations). MOL also fully controls Slovnaft (a Slovak refinery and petrochemical complex) and TVK, the largest petrochemical company in Hungary. In 2003, MOL acquired a 25% stake in INA, the only refinery in Croatia. The potential for further acquisitions in the region also exists.
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Templeton Emerging Markets comment - Oct 04
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Thursday, 18 November 2004
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Fund Manager Comment
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The majority of emerging markets showed positive returns during the month and the MSCI Emerging Markets Index returning 2.2% in US dollar terms. An interest rate hike in China, its first in nine years, impacted markets in the region on concerns of a possible effect on demand from China for imports from neighboring economies. In Indonesia, a peaceful transition of power from Megawati Sukarnoputri to Susilo Bambang Yudhoyono allowed the market to outperform making it the strongest performer during October as well as year-to-date. Latin American markets recorded positive results with Mexico outperforming regional markets. Six months after EU accession, Eastern European markets continue to benefit from greater investor interest. While the South African market fell in local currency terms, a strengthening rand greatly enhanced the market's US dollar returns. Market expectations for EU accession talks to begin with Turkey led the market to rise during October. The fund undertook selective purchases in Brazil, Thailand and Turkey as the fund continued to invest in value stocks at attractive prices. Conversely, the fund undertook selective sales in Spain and Taiwan as sale targets were reached.
Asia
For the first time in nine years, China raised interest rates by 0.27% in October as government efforts to cool the economy continued after GDP grew 9.1% in the first nine months of 2004. Premier Wen Jiabao visited Vietnam during the month where he signed eight accords, relating to transport infrastructure, bio-fertilizer production, technology and health inspection, with his Vietnamese counterpart. The accords will improve bilateral trade and economic relations between the two countries. There were also visits by Russian President Vladimir Putin and French President Jacques Chirac to China to seal a number of agreements, signaling greater cooperation between the nations.
Aimed at developing trade relations, South Korean President Roh Moo Hyun visited India where both nations announced plans to study the possibility of a free trade agreement. In a setback for Roh, the Constitutional Court blocked his controversial plan to relocate the country's capital to the Yeongi-Gongju area from Seoul. Trade numbers continued to support the economy with September exports increasing 23.5% y-o-y to USD21.0bn, while imports rose 25.2% to USD18.2bn, resulting in a trade surplus of USD2.8bn.
Africa
Fitch upgraded its outlook on South Africa's sovereign ratings to positive from stable due to an improvement in the country's credit fundamentals, higher growth expectations and strong macroeconomic policy. Central Bank Governor Toto Mboweni said that inflation was under control and that an increase in interest rates would be dependent on whether higher oil prices lead to acceleration in costs. A high-profile corruption case involving the financial advisor to President Mbeki's deputy and most likely successor, Jacob Zuma, may raise questions about the Zuma's integrity.
Latin America
Mexican President Vincente Fox undertook a three-day visit to Canada where the two countries initiated the Canada-Mexico partnership under which government and business leaders will work towards expanding trade relations. Mexico's trade sector continues to remain robust with September exports up 13.3% y-o-y to USD16.2bn due to strong demand from the US. Imports grew 14.4%, leading to a trade deficit of USD574m, an improvement from the USD640m deficit registered in August.
Brazil's ruling party, Partidos dos Trabalhadores (PT), won six state capitals in the first round of the country's municipal elections and will compete for another nine in the second round. However, a run-off election in Sao Paulo overshadowed the party's victory. Solidifying Brazil's growing importance in the global economy, the US strongly supported the country's bid for a permanent seat in the United Nations Security Council. However, a recent World Economic Forum survey indicated that Brazil made little progress in key issues such as corruption, taxes and infrastructure.
Europe
As expected, Hungary's parliament approved the appointment of Fedor Gyurcsany as Prime Minister. His cabinet included 17 ministers with Finance Minister Tibor Draskovics continuing as Finance Minister. Standard & Poor's upgraded its outlook on Poland's foreign currency rating to stable from negative due to an improvement in the country's external position. The Polish government survived a confidence vote signaling its independence from any political party in parliament. Moody's raised Turkey's local currency debt rating to B2 from B3 due to an improvement in the country's public sector debt situation. While the European Commission recommended the commencement of EU accession talks for Turkey, it is now up to the Council of the Presidents, the highest body in the EU, which is to meet on December 17, to decide whether talks should commence.
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Templeton Emerging Markets comment - Aug 04
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Tuesday, 21 September 2004
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Fund Manager Comment
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Emerging markets rebounded in August as oil prices retreated from their peak, allowing the benchmark MSCI Emerging Markets Free Index to have a positive US$ return of 3.9%. Asian markets recorded mixed results. In South Korea, an unexpected 25 basis points interest rate cut revived market hopes for a domestic consumption recovery boosting the stock market. The return of bargain hunters in Taiwan allowed the MSCI index to end the month up 6.6%. Hong Kong's return to inflation after 68 months of deflation and strong second quarter economic growth led to greater investor confidence, so that the market outperformed regional markets. Eastern European and Latin American markets also recorded positive gains, while a weakening rand considerably lessened South Africa's US dollar return.
Emerging markets continue to attract investors for the simple reason that stocks are trading at very attractive valuations. While some short-term volatility is inevitable as concerns about high oil prices and rising interest rates adversely impact market sentiment, we believe that strong economic growth; political stability and the implementation of key reforms will allow emerging markets to continue their long-term recovery path. As such we will continue to use any downturns to build positions in stocks we deem to be oversold.
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Templeton Emerging Markets comment - Jun 04
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Friday, 13 August 2004
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Fund Manager Comment
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Concerns about escalating oil prices, rising interest rates in the US, and an overheating Chinese economy took center-stage in the first half of the month, and caused the MSCI Emerging Markets Free Index to fall 10.3%. As prices retreated sharply, buyers emerged towards the end of the month. The end result was a loss of 2.3% for the MSCI EMF index for the month of May. South Africa was one of the strongest performers in US dollar terms during April as the rand continued to appreciate, while uncertainty in the Middle East continued to take a toll on the Turkish market. The surprise election results in India and continuing concerns about a hard landing in China had some negative impact on Asian markets. Latin America and Eastern Europe performed in line with emerging markets in general.
While emerging markets have experienced some volatility in the last few months, we do not believe that this is strong enough to derail long-term market growth. Most economies continue to recover, recording strong growth rates, bolstering the markets' underlying fundamentals. This coupled with the implementation of structural, financial and economic reforms, we expect benefits to flow into the nations' stocks markets over the longer-term. As such we will continue to use any downturns to build positions in stocks we deem to be oversold.
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Templeton Emerging Markets comment - Sep 03
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Thursday, 20 November 2003
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Fund Manager Comment
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After recording strong performances in August, emerging markets took a breather during September, with the S&P/IFCI Composite index returning just 1.1% (in US dollars). Despite a loss of momentum in the region, South East Asian markets such as Indonesia and Thailand recorded good performances. Argentina and Venezuela led Latin American performances, while Russia and Hungary outperformed their counterparts elsewhere in Eastern Europe. Continued optimism allowed Turkish markets to outperform, with the MSCI Turkey index gaining 15.9% (in US dollars).
Year-to-date, emerging markets, have recorded positive performances due to an improvement in investor confidence. The fund manager's expect this trend to continue. The fund manager's find that many companies are exhibiting sound fundamentals but low market prices when compared to their historical highs. Overall, the fund manager's believe that the discipline imposed by the funds bottom-up value orientation has guided the fund manager's well and they expect this strategy to bring long-term benefits to the funds investors.
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Templeton Emerging Markets comment - Apr 03
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Thursday, 22 May 2003
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Fund Manager Comment
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Most emerging markets bounced back in April as allied forces emerged victorious in Iraq. As a result, the S&P/IFCI index gained 10.21% (in dollars). In Asia, the fund manager's increased the funds exposure to Singapore, Hong Kong and Taiwan, but reduced exposure to India and Indonesia. In Latin America, the fund manager's increased the funds holdings in Mexico via purchases in Telmex and Kimberly Clark. A purchase of Anglo American Corp stock also increased exposure to South Africa. Asian markets continued to be pre-occupied with the severe acute respiratory syndrome (SARS) virus. By contrast, Eastern European and Latin American markets returned double-digit gains during the month, while a strengthening rand allowed South Africa to end April in positive territory. The top gainer was Turkey, with the MSCI Turkey index jumping 32.5% (in dollars) as concerns in the Middle East subsided and the country continued efforts to improve its relations with the US.
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Templeton Emerging Markets comment - Dec 02
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Thursday, 13 February 2003
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Fund Manager Comment
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During December, concerns over US-led war with Iraq resurfaced. This caused emerging markets to gave back some of the gains recorded during the quarter, with the benchmark S&P/IFCI Composite index falling 3.78% in US dollar terms and the MSCI AC Asia Free ex Japan (the worst hit region) losing 6.2%. The fund did better than its benchmark during the month. Marking a landmark decision, the European Union formally agreed upon enlargement of the bloc to include ten additional states in May 2004. Latin America, as a region, continues to recover, while Turkey suffered greatly due to concerns in the Middle East.
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Templeton Emerging Markets invests in SA
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Monday, 1 July 2002
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Media Comment
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Mark Mobius, the emerging markets guru at Templeton Emerging Market Fund, invested the biggest percentage of his $8-billion portfolio in South Africa. Mobius said "SA's stocks are cheap and we would be crazy to ignore them in favour of scrambling to get our money offshore".
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