Civil unrest biggest threat to emerging markets

Mobius, who manages the £995.4m Templeton Emerging Markets investment trust, said deteriorating economic conditions could spark global unrest.

"In this kind of global environment, you have to expect civil unrest, and we’re seeing that in many, many countries around the world.

"There will be strikes and demonstrations, even in China. There will be unhappiness because jobs have been lost – we can’t get away from that."

Mobius said there were also risks associated with the public’s misconception of market conditions.

"What we are trying to emphasise to people is that you must differentiate between the stock market and the economy," he said.

"The stock market leads the economy, and the stock market is built on bad news. We must be careful we don’t get confused and think the market is in a bad shape."

However, despite the potential risks in emerging markets, a number of investment opportunities still remain, according to Mobius.

He said Brazil, China and Turkey were very attractive markets in the current environment, as these economies stood to gain from monetary changes.

"In Turkey, exports have been impacted by what’s happened in Europe, but they have quite a vibrant domestic economy and tourism," he explained.

"The key factor is the global decline in inflation and interest rates - Turkey has suffered from high interest rates in the past," he said.

"This decline is very good news for Turkey, which is one of the reasons why we’re pretty bullish."

Mobius said China still offered a compelling argument for investment despite fears it could be impacted by events in the West.

"We’re still looking at 8 per cent growth in GDP for China this year, that’s achievable. They have the wherewithal – the money, the desire and the administrative structure - to bring on good growth, we are not too worried by that."