Quotes: US MENA   Enter Symbol: NewsLetter: Search: advanced

Morgan Stanley positive on Middle East equities  Join our daily free Newsletter

MENAFN Press - 10/05/2009

No. of Ratings : 0
Add to Mixx!


 


Michael Wang, a Global Emerging Market Strategist at Morgan Stanley
(MENAFN Press) Morgan Stanley Positive on Middle East Equities
Advises investors to begin increasing exposure to the region as valuations are attractive again
MENA region should be more resilient to the global downturn
Saudi Arabia recognized as most attractive market

DUBAI, May 10th, 2009 - Morgan Stanley (NYSE: MS) today revised its recommendation on the MSCI Arabian Markets Index, recommending investors to begin increasing their exposure to Middle Eastern stocks as valuations are more attractive now than at any time in the past two years.

Since advising investors to reduce their exposure to the region in October 2008, the region has underperformed other emerging markets and Morgan Stanleys latest report MSCI Arabian Markets: Economically resilient and valuations appealing again-start increasing exposure, states that the timing is now right to begin increasing exposure in regional equity markets, highlighting Saudi Arabia as a particularly attractive market for investors along with Qatar and Egypt.

In the report, Michael Wang, a Global Emerging Market Strategist at Morgan Stanley, says: Saudi Arabia is in one of the strongest positions to weather the global crisis due to the fact it possesses one of the largest pools of FX savings and accumulated fiscal surpluses in the world, a sound banking system and minimal real estate exposure. The prospect for further liberalization of equity markets in the country to foreign investors provides an additional incentive to increase positions.

Mr. Wang also believes the Middle East region will be economically resilient. Despite a sharp cyclical contraction in GDP growth this year due to falling oil revenues, we think the region will be more resilient to the global downturn due to favourable underlying domestic demand trends, strong fiscal stabilizers, monetary easing in the short term and low external debt relative to FX reserves.

The key difference with the period a year ago has been the fall in inflation across the region as local food and energy prices have moderated. This has allowed regional central banks greater flexibility in following the Federal Reserve in loosening monetary policy without exacerbating domestic balances. Also, the regions adherence to dollar pegs, a stance widely criticized a year ago, has been proven correct and is now actually one of the key anchors for the region. added Mr. Wang.

Despite these positive views, Mr. Wang also offered a warning against investors adopting too aggressive a position. Several headwinds in the short term prevent us from recommending a more aggressive position. Regional banks' exposure to falling property prices is a concern, as is the reliance in some banking systems on wholesale funding. Another potential worry is the exodus of foreign capital from the region in late 2008 which has been a key source of vulnerability.

Nevertheless, Morgan Stanley highlights the MENA region as one of the more attractive investment opportunities in emerging markets currently as valuations are attractive relative to the regions structurally high profitability: Our preferred stocks in these countries would be Telecommunication companies such as Telecom Egypt or Qatar Telecom. Also, Utilities companies such as Qatar Electric and Water are interesting prospects Mr Wang added.


About Morgan Stanley
Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, investment management, and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 36 countries.

 






  MENA News Headlines


 
Click to Apply






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country
Marketwatch News
UPI News
Comtex News

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Investment Game
Economic Calendar
Financial Glossary

My MENAFN
Portfolio Tracker

Voting

Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2000 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help