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Middle East managers bullish on equities
27 February 2014
Some local managers look to shift allocations to less frothy markets, according to new Reuters survey
Middle Eastern fund managers continue to favour the majority of regional stock markets but some are looking to shift money to less richly valued markets, according to Reuters’ monthly survey of 17 regional investment managers.
The results show that 53%, a four-month high, expected to increase equity allocations to the Middle East in the next three months, while none expected a decrease, predominantly due to the strong performance of stock markets.
Respondents were also optimistic about the regional fixed income market, albeit with a hint of caution over the prospect of a decrease in US monetary stimulus. Some 20% expected to raise allocations to regional fixed income in the next three months while 13% expected a reduction.
There was a discrepancy in opinions on UAE equity markets, where 33% of managers expected a hike in allocations but 20% expected a cut in exposure. Money is being shifted from UAE to Qatar and 47% of managers said they would raise allocations while only 7% stated they would expect a decrease.
For Saudi Arabia, 60% expected to increase allocations, while there was a similar bullish tone to investing in Egypt, where the stock market has risen by more than 60% since July’s ousting of President Morsi. Some fund mangers were optimistic about upcoming elections which they hoped would stabilise the political situation and lead to an economic recovery, with 53% of fund managers expecting to raise allocations to Egypt and only 7% expecting a decrease. Many fund managers remain bearish on Turkey due to political turmoil and currency volatility, with only 7% expecting to raise allocations and 33% expecting to cut exposure.
The survey was conducted by Trading Middle East and the following institutions took part: Abu Dhabi Fund for Development; Ahli Bank Oman; Al Rayan Investment; Al Mal Capital; Arqaam Capital; Emirates NBD; Global Investment House; Mashreq Bank; Naeem Financial Investments; National Bank of Abu Dhabi; Rasmala Investment Bank; Mohammed Alsubeaei & Sons Investment Co (MASIC); Schroders Middle East; Securities and Investment Co of Bahrain; Amwal Qatar.