Amwal Al Ghad - 2013-01-03 12:11:56
Middle East and North Africa equities are set to outperform emerging markets as higher dividends and state-funded expansion lure investors hunting for better returns, Franklin Templeton Investment Management Ltd. (BEN) said.
The Bloomberg GCC 200 Index (BGCC200) of the biggest Gulf Cooperation Council stocks rose 3.7 percent in 2012, lagging behind the 15 percent rally in the MSCI Emerging Markets Index. (MXEF) Shares in the Bloomberg GCC 200 Index, which includes the most-traded stocks in the six-nation group, offer a dividend yield of 3.87 percent, versus 2.67 percent on the MSCI Emerging Markets Index, according to data compiled by Bloomberg.
“As international investors search further afield for yield, the MENA equity case will garner more interest,” Bassel Khatoun and Salah Chamma, Dubai-based co-heads of MENA equity at Franklin Templeton Investments (ME) Ltd., said in a Dec. 30 e- mailed response to questions. Stocks trailed emerging-market peers in the past five years and “given the supportive regional fundamentals, there is a strong case for the reversal of that trend,” they said.
MENA stocks underperformed peers as a wave of popular unrest in the so-called Arab Spring and Dubai’s debt crisis deterred foreign investors. Momentum is returning as the GCC invests oil wealth on more than $1 trillion of projects, including schools and roads in Saudi Arabia and stadiums to host the 2022 soccer World Cup in Qatar. Companies benefiting from this spending will lure investors given attractive valuations, said Franklin Templeton, whose MENA fund had $50 million in assets under management at the end of November. More»