Why Chinese companies are a play on frontier markets

on May8

Mark Mobius, executive chairman of Templeton Asset Management's Emerging Markets Group

David Rochkind | Bloomberg | Getty Images

Mark Mobius, executive chairman of Templeton Asset Management’s Emerging Markets Group

“This is their home base. They understand Asia. They’re more willing to go into these countries that may appear to be risky at first, but where they can grow. But I think that’s where the opportunities are,” Mobius said.

Some of the Chinese players’ growth in Asia’s emerging markets might not be entirely organic, he noted.

“Of course there are some home-grown internet companies, shopping bazaars and so forth on the internet that you see in these countries and they of course, will grow on their own,” Mobius said. “But they may also merge with the Chinese companies and we’ve already seen some of that happening.”

Mobius also said he was interested in the Chinese market as well, noting that internet plays such as Tencent and Alibaba were already growing at an “incredible rate.”

He was also interested in players outside the China’s usual suspects.

“There are a number of smaller companies that have great potential in China,” Mobius said. “One of the things that’s exciting for us is as China opens up, as we’re allowed to go into the small and medium sized companies, there are going to be wonderful opportunities.”

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