The violent pullback in Chinese equities has nearly run its course, according to emerging markets investment guru Mark Mobius, who is on the lookout for value in the market.
“I think we are probably getting close to a capitulation point in China,” Mobius, executive chairman at Templeton Emerging Markets Group, wrote in a blog post on July 9. The term “capitulation” refers to the point when sentiment has gone so far in one direction that a turn in the opposite direction, be it higher or lower, is a certainty.
“We should see at least a short-term bounce soon, and many investors who didn’t get out before may use that move to do so. Then, we would expect to likely see sideways action until the market can hopefully recover, provided valuations are good,” he said.