SHOWS: TOKYO, JAPAN (AUGUST 8, 2013) (REUTERS - ACCESS ALL)

MARK MOBIUS, EXECUTIVE CHAIRMAN, TEMPLETON EMERGING MARKETS GROUP

1. REPORTER OFF CAMERA SAYING:

'Do you find low valuations of emerging markets attractive or would you rather be selective as most of them face structural issues?'

2. MARK MOBIUS SAYING:

'Of course you have to be selective, because there are some companies that are very, very expensive, some that are cheap. Generally speaking, what we are finding is that in the frontier markets, valuations are very, very attractive. There are single-digit PEs, price-to-book values are below one, so forth and so on. In emerging markets generally, it's very patchy. Some markets are relatively expensive, some are not. It's interesting to note that in the BRIC area - you know BRIC countries have been pretty down, very unfavorable notices in terms of earnings and so forth in many cases - and there we're finding some opportunities.'

3. REPORTER OFF CAMERA SAYING:

'Do you expect investors to remain inclined toward developed markets versus emerging markets? What happens to emerging markets in the wake of QE tapering?'

4. MARK MOBIUS SAYING:

'What we've seen is a flow of money going into emerging markets funds during the last five, six years in pretty large amounts, with the exception of the sub-prime crisis. In the first half of this year, there's been a lot of money going into developed markets funds. And emerging markets have been flat in terms of money flows. I think that'll be reversed, because as profits are made in developed markets, as money flow begins to increase because the banks now are going to be flush with cash, so they'll want to get out into the market, you'll see emerging markets come back.'

5. REPORTER OFF CAMERA SAYING:

'Which emerging markets are you overweight and which are you underweight?'

6. MARK MOBIUS SAYING:

'We're now overweight, of course, in frontier-oriented companies and countries. Of course, as a percent of the total it's relatively low, China's been increasingly overweight as we go forward because there're lots of opportunities in China with the negative news that you get there tends to be good pricing opportunities. Thailand is overweight; we're seeing some overweight positions in Latin America, for example Columbia, Chile.'

7. REPORTER OFF CAMERA SAYING:

'There are concerns about China slowdown, such as credit concerns. What are your views on that?'

8. MARK MOBIUS SAYING:

'I think that China is not going to slow down significantly. If you look at the size of the economy now, second largest in the world, seven percent growth is tremendous growth. You're looking at over a trillion dollars of additional GDP in this country. So it's an incredible increase in nominal terms. Real terms of course, you're going to have a slowdown because it's a big economy, you can't be growing at these double-digit levels that we saw in the past.'

9. REPORTER OFF CAMERA SAYING:

'Turning to Japan - Abenomics is boosting the markets. What are you advising investors to do?'

10. MARK MOBIUS SAYING:

'Great for equity investors, obviously, because Abenomics means more money, more liquidity. Not only for Japan, the Japan market has gone up a lot but it will continue to go up. But for emerging markets it's very positive particularly for Asian markets, ASEAN countries: Thailand, Philippines, Malaysia, Singapore, Indonesia; these countries will benefit.'