Why Mena investors should look closer to home for opportunities

Investing in regional companies offers accessibility, familiarity and a chance to participate in the region's growth story

Electronic traffic signs advertise the Salik IPO scheme in Dubai. Pawan Singh / The National
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In today’s evolving economic and financial landscape, it's crucial to look beyond traditional investment paradigms and embrace opportunities closer to home.

Investing in stocks isn't just about trading on Wall Street. Sometimes, the most promising investment opportunities are right in front of us.

The Middle East and North Africa region, with its dynamic markets and companies, offers an exciting avenue for investors to explore and consider.

Mena stock investments not only emphasise accessibility and familiarity, but also the promise of participating in the region's transformational journey.

We also believe that Mena stocks transcend being mere investments; they represent a means to empower both ourselves and our region.

Investing in what you know

One of the fundamental principles of successful investing is putting your money where your knowledge is. In the Mena region, this concept holds significant weight.

We all see the heavy congestion on Dubai roads now and think about what that means for Salik, Dubai’s toll operator and one of the more popular traded Mena stocks.

Or consider Emaar Properties, the developer of the Burj Khalifa, the world’s tallest building.

As Emaar and other developers launch new projects to meet the growing demand for housing, think about what that may mean for the company’s share price.

These are just a few examples of the tangible growth potential that you can see happening in front of your eyes.

But it’s not just the UAE, we see similar trends in many companies across the Mena region.

And the best part? Investing can be treated as something beyond making financial gains; it’s also about participating in the growth and supporting our communities and enterprises.

Advantages of investing locally

Investing locally has several advantages. Firstly, local investments offer better access to information.

You have a front-row seat to news and developments that can affect your investments.

This proximity allows for informed decision-making, a crucial aspect of successful investing.

Secondly, investing in Mena stocks offers an opportunity to take part in the strategic transformation our regional economies are powering through.

As significant reforms are being implemented and development plans are being executed, growth opportunities are plentiful.

For example, the Saudi Tadawul Exchange ranks today as the eighth largest in the world by market capitalisation, which speaks volumes about increasing investor confidence and the potential for further growth.

Additionally, investing in Mena stocks can provide the potential for both dividend yields and capital appreciation.

Many of these names include state-owned enterprises being floated, as governments in the region divest a percentage of their stakes to push ahead with diversification plans.

Seizing the opportunity

Mena markets have been on a remarkable growth trajectory. Take Aramco, Saudi Arabia’s oil company, for instance.

Its initial public offering in 2019 was the largest ever, underlining the growing global significance of Mena markets.

As the world’s largest oil producer, Aramco can easily compare with global tech companies like Apple and Alphabet when it comes to profitability.

So, names such as Aramco, Emaar and Salik are not just stock symbols; they are emblematic of the Mena region's transformational growth story.

As investors, we have the privilege of being a part of this narrative.

By considering Mena stocks, we not only have a chance to make a financial gain but can also contribute to the prosperity of our communities.

Mena potential

Mena stocks represent a unique investment opportunity for those looking to participate in their region’s growth journey.

The accessibility and familiarity of local investments, combined with the region's growth potential and the advantages of investing locally, make a compelling case for exploring these opportunities.

As you contemplate your next investment move, remember that some of the most exciting prospects might be closer to home than you think.

Muhammad Rasoul is chief executive of neo-broker amana

Updated: March 06, 2024, 8:57 AM