Mena managers remain positive despite Dubai crisis
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Middle East and North Africa (Mena) fund managers expect markets to rise, according to the latest annual sector review by Standard & Poor’s Fund Services.
After a period of holding large cash reserves, most funds are now fully invested and managers are selectively allocating to the United Arab Emirates.
Dubai’s debt crisis, which hit the headlines in November last year, took many fund managers by surprise. Yet most of them remain positive on the prospects for the region.
Roberto Demartini, the lead analyst, says: “A common view was that with the oil price at $70 a barrel, the economies in the region were poised for stability and growth,” he says in a statement.
The interviews with managers of the 14 S&P Fund Services-rated Mena funds took place took place in November and December after it emerged that Dubai World, a state-owned holding company, was struggling to repay its debt.
Other countries in the Mena region, including Kuwait, Qatar and Saudi Arabia, are considered as areas still reaping the benefit of reasonably high oil prices. (article continues below)
Demartini says the more recent announcements about Dubai have clearly had an impact on volatility and opened some opportunities. “The message from managers for the coming months seems to be one of extreme selectiveness,” he says.
Readers' comments (1)
Anon IFA | 7 Feb 2010 6:27 pm
'Took many fund managers by surprise. Yet most of them remain positive on the prospects for the region'? Give me a break. Build/buy your house on sand and expect the consequences. Not convinced that this immature stockmarket has sufficient diversity for most people. Property and oil and plenty of greed. There seems little appetite in actually building a real economy where you face up to the huge debts that are still owed to many property investors which they cleverly side stepped any responsibiliy (well not so cleverly as it turned out) Steer well clear I say!! unless you like pouring your money into a deep sandy hole, something perhaps better reserved for a nice holiday on Jumeirah beach. Dont lose your job in Dubai however, as there is no welfare state and expect no sympathy and no help with that mortgage you took out and are currently in negative equity with. It is problems like this that will need to be addressed before Dubai can restore confidence in investors.
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