Global Arab Network | Middle East and North Africa Fund Managers: Now is the Time to Invest

Translate this article to your language:

GANPublications

e-Publications

Add Site to Favorites

Add Page to Favorites

Make Homepage

Share This Page

RSS Feed

--------------------------------------------------------------------------------------------------------------------
| |

Middle East and North Africa Fund Managers: Now is the Time to Invest

Wednesday, 19 January 2011 10:29

Fund managers in the Middle East and North Africa (MENA) region believe the worst is over and now is the time to buy in, Global Arab Network reports according to Standard & Poor’s Fund Services in its latest review of the region.

Fund managers point to the high oil price, a fiscal surplus in most countries in the region and attractive valuations as evidence for this optimistic point of view.

“Most managers have moved on from highlighting the low historic correlation between this region and the rest of the world and have shifted their emphasis to valuations and growth potential at a time when the fundamentals offered by the Western world are far from compelling,” said S&P fund analyst, Roberto Demartini.

Fund managers believe that the rescheduling of the Dubai World debt in September 2010 was the catalyst for future growth. The teams at ING and Vision, for example, are becoming more positive on Dubai although they put it down primarily to bottom-up stock selection.

“Managers agree it is no longer a top-down call and the view surrounding Dubai companies is increasingly driven by fundamentals,” said Demartini. “Even some of the real estate plays, such as Emaar Properties, are coming back into fashion, although for very different reasons from the past, as managers point to the company's potential to pay an attractive dividend yield now that its growth spurt is over.”

“All managers we interviewed for our review like Saudi Arabia, the only country in the region with a sizeable population, strong resources and sufficient choice in terms of companies available to buy,” continued Demartini.

Qatar also continues to feature highly, although most managers have taken some profits this year. “Good fundamentals and strong reserves are enough, in most managers’ eyes, to offset the fact that Qatar is actually a very small country with an extremely limited population and a stockmarket that counts only a handful of liquid companies," said Demartini. Fund managers also pointed out that the upcoming World Cup in Qatar would support infrastructure spending.

Oman is also a fairly small market, but managers highlight how its fundamentals are becoming more favourable, as the country has managed to lower its marginal cost of oil production. This should support further investment.

Elsewhere, expectations on Bahrain remain fairly subdued, and Kuwait remains the subject of debate. “On balance, most fund managers are willing to give it the benefit of the doubt,” said Demartini.

Global Arab Network

< Prev		Next >

Last Updated on Wednesday, 19 January 2011 11:17

Add comment

The opinions of the authors in articles published are theirs alone and do not necessarily reflect the views of Global Arab Network
------------------------------------------------------------------------------
Published comments are the opinions of private individuals and do not reflect the views of Global Arab Network