At this time of year, newsletters have to predict what is coming, however unlikely they are to know. I decided that Africa is the hot market for 2014 mainly by a process of elimination. Latin America apart from Mexico is looking pricey. Asia is troubled by worries about slowing Chinese growth and Thai and Indian politics. Eastern Europe has Ukraine and Putin to scare us away. Of course Africa has Central African Republic, Somali- a and -land and the deathly tribes of South Sudan. Goodwill Jonathan may turn out to be corrupt just like other Nigerian leaders. Still, it was my pick for emerging markets in 2014. But I am not alone!

Scott Letter:

“Nigeria is one of your largest exposure, but oil prices have been dropping in the U.S. where there is an oil
glut. Is that hurting Nigeria?

Dr. Mark Mobius: “Not at all, because the demand from China continues to be strong.”

SL: “What kinds of growth rates do the companies in Africa have?”

Mobius: “The range can be substantial, depending on the sector and stage of a company’s development. We hold a
brewery in Nigeria, for example, that has an estimated 3-5 year earnings per share (“EPS”) growth of 22%.”

SL: “Does that apply to some of the smaller African countries as well?”

Mobius: “Yes. We are just scratching the surface of some of the smaller African countries, as they are just beginning to enter the market economy.”

SL: “With all of the recent craziness that caused the bombings in Nairobi, Kenya, has it disrupted any of your portfolio companies there?”

Mobius: “No, there’s been no impact at all. There are many fast-growing companies throughout Africa. The banks are interesting, and we own interest in Safaricom, a leading telecom operator. A number of the companies that have a 'British rule” background are doing well.”

Mark is currently pitching the open-end Templeton Frontier Markets Fund (TFMAX). We don't cover open-end mutual funds. John Cole Scott and his father George Cole Scott edit The Scott Letter: Closed-end Fund Report on behalf of CEFAdvisors.com, their company.