Franklin Templeton believes Middle East and North Africa (Mena) equities are set to outperform emerging markets as higher dividends and state-funded expansion lure investors.
The Bloomberg GCC 200 Index of the biggest GCC stocks rose 3.7 per cent in 2012, lagging behind the 15 per cent rally in the MSCI Emerging Markets Index. Shares in the Bloomberg GCC 200 Index, which includes the most-traded stocks in the six-nation group, offer a dividend yield of 3.91 per cent, versus 2.69 per cent on the MSCI Emerging Markets Index.
"As international investors search further afield for yield, the Mena equity case will garner more interest," said Bassel Khatoun and Salah Chamma, the Dubai-based co-heads of Mena equity at Franklin Templeton Investments (ME). 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 popular unrest in the Arab Spring and Dubai's debt crisis deterred foreign investors.
Momentum is returning as the GCC invests oil wealth on more than US$1 trillion of projects, including schools and roads in Saudi Arabia and stadiums to host the 2022 Fifa World Cup in Qatar. Companies benefiting from this spending will lure investors given attractive valuations, Franklin Templeton said.
Arabian Gulf equities trade at 1.55 times book value, or assets minus liabilities, while those on Egypt's index trade at 1.35 times - versus a multiple of 1.78 for developed markets in the MSCI World Index. The Bloomberg GCC 200 Index gained in early Dubai trading after after legislators in the United States passed a bill to avert spending cuts and tax gains threatening the economy.
Mena economies will grow 3.6 per cent in 2013, according to IMF forecasts - three times faster than average growth for developed nations, Bloomberg data shows.
* Bloomberg News
War
Director: Siddharth Anand
Cast: Hrithik Roshan, Tiger Shroff, Ashutosh Rana, Vaani Kapoor
Rating: Two out of five stars
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%3Cp%3ENon-oil%20trade%20between%20the%20UAE%20and%20Japan%20grew%20by%2034%20per%20cent%20over%20the%20past%20two%20years%2C%20according%20to%20data%20from%20the%20Federal%20Competitiveness%20and%20Statistics%20Centre.%C2%A0%3C%2Fp%3E%0A%3Cp%3EIn%2010%20years%2C%20it%20has%20reached%20a%20total%20of%20Dh524.4%20billion.%C2%A0%3C%2Fp%3E%0A%3Cp%3ECars%20topped%20the%20list%20of%20the%20top%20five%20commodities%20re-exported%20to%20Japan%20in%202022%2C%20with%20a%20value%20of%20Dh1.3%20billion.%C2%A0%3C%2Fp%3E%0A%3Cp%3EJewellery%20and%20ornaments%20amounted%20to%20Dh150%20million%20while%20precious%20metal%20scraps%20amounted%20to%20Dh105%20million.%C2%A0%3C%2Fp%3E%0A%3Cp%3ERaw%20aluminium%20was%20ranked%20first%20among%20the%20top%20five%20commodities%20exported%20to%20Japan.%C2%A0%3C%2Fp%3E%0A%3Cp%3ETop%20of%20the%20list%20of%20commodities%20imported%20from%20Japan%20in%202022%20was%20cars%2C%20with%20a%20value%20of%20Dh20.08%20billion.%3C%2Fp%3E%0A
The specs: 2018 BMW R nineT Scrambler
Price, base / as tested Dh57,000
Engine 1,170cc air/oil-cooled flat twin four-stroke engine
Transmission Six-speed gearbox
Power 110hp) @ 7,750rpm
Torque 116Nm @ 6,000rpm
Fuel economy, combined 5.3L / 100km
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
