ANCHOR (OFF-CAMERA) ENGLISH SAYING:

Well we saw the major European indices doubled its gains in 2013. What are your major concerns going into 2014?

KATRINA DUDLEY, MGR., FRANKLIN TEMPLETON MUTUAL EUROPEAN FUND, (ENGLISH) SAYING:

Looking into 2014, we've very optimistic actually. We think that the market is under-appreciating the growth opportunities that exist in European companies. From the valuation point of view, you've really seen the multiples, you know, compress up to the US levels. But we don't think that people recognize that European companies will actually grow in 2014.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

Even though we got that hiccup with France, the GDP turned negative for the third quarter.

KATRINA DUDLEY, MGR., FRANKLIN TEMPLETON MUTUAL EUROPEAN FUND, (ENGLISH) SAYING:

We're going to have a bumpy road going from, you know, the negative growth that we've seen in 2013. In 2014 though we expect to see positive growth, so a couple of bumps along the road don't worry us.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

But valuations, what sectors do you see value?

KATRINA DUDLEY, MGR., FRANKLIN TEMPLETON MUTUAL EUROPEAN FUND, (ENGLISH) SAYING:

We're stock pickers so we look to shop anywhere that we can find value. We like names in various different sectors. We like A.P. Moller-Maersk. That's a name we have liked for a long time. It's had a good rally as you mentioned during 2013, but we still see significant opportunity. It's a real stock-specific story here though because this is a company that's now focusing on, you know, its return on capital employed. It's really highlighting those sectors that are underperforming and it's going to fix those. So we continue to see it as a restructuring opportunity. Despite the good performance, we still think there's a lot of upside.

ANCHOR (OFF-CAMERA) ENGLISH SAYING:

And looking at that stock, it rose 34% since the end of June. So why is it still a buy?

KATRINA DUDLEY, MGR., FRANKLIN TEMPLETON MUTUAL EUROPEAN FUND, (ENGLISH) SAYING:

It's really this idea that they're going to be improving their returns on capital employed and that we think that the market is under-appreciating that. So the rally that we've really seen is pretty much that valuation, easy money made argument. And we think we're going into a little more of a hard slog as they improve those returns, but we think that that's going to offer the incremental upside.