Deutsche Bank holds annual MENA Equity Conference amid increased International investor interest in regional markets
Deutsche Bank holds today its third annual Middle East and North Africa (MENA) equity conference in Dubai, at the outset of what promises to be a solid year for equity markets in the region.
Over 30 companies and 130 clients are due to meet over the two-day conference, which saw a marked increase in attendance by international clients as interest in the region’s equity markets increases driven by attractive valuations and an increase in regional exchange volumes.
The conference saw the participation of major regional companies that included: Al Rajhi Bank, Aldar, Almarai, Arabtec, DP World, Dubai Financial Market, Orascom Construction, SODIC and many others.
Ahmed Beydoun, Head of Global Markets Equity for the MENA region at Deutsche Bank, said “Our conference serves as a forum bringing together the largest MENA dedicated fund managers and global macro funds in close to 600 one-on-one meetings. Over the last three years we have seen rising levels of participation from regional and international players, indicating renewed interest from investors in regional markets that, we believe, are poised to witness a recovery in 2011.”
After two years of underperformance, Deutsche Bank anticipates a solid 2011 for the regional equity markets. Robust GDP outlooks for regional countries, rising oil prices and increased governmental spending, are supportive of positive earnings.
Pascal Moura, Head of Central and Eastern Europe Middle East and Africa Company Research at Deutsche Bank, said “The region trades at a slight premium to the MSCI EM but offers marginally higher growth, although the wide divergence among members persists. On a country level, Qatar, and to lesser degree the UAE, stand a good chance of positive progress on MSCI EM inclusion, in our view.”
Moura added that the opening of the Saudi market for direct foreign investor ownership could potentially be an important milestone for the country and transformational for the region, as it could serve to enlarge the institutional investor pool while increasing liquidity and minimizing volatility.
Overall, Deutsche Bank expects credit quality to improve and volume growth to recover for the MENA banks. The Bank expects another challenging year for MENA Real Estate, with Egypt being the only noticeable exception. In Petro-chemicals, the issue surrounding possible changes in feedstock costs for the Saudi petrochemical-based companies will dominate the debate in the sector. In Telecoms, Deutsche Bank continues to see growth in the Saudi Arabian market driven by the increase in penetration, rising data contribution, and a potential drop in the royalty fee.
Deutsche Bank’s team of equity analysts in the region covers 70 listed companies.
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