The selloff in Persian Gulf stocks triggered by protests in Egypt is “completely unjustifiable” as government spending and rising oil prices underpin economic growth in the region, Schroders Investment Management Ltd. said.
Saudi Arabia’s Tadawul All Share Index has fallen 5.2 percent since Jan. 24 and now fetches 1.9 times net assets, the cheapest level relative to the MSCI Emerging Markets Index since Bloomberg began compiling the monthly data in April 2006. Qatar’s QE Index trades at 2 times book value, a 29 percent discount to the average level, according to Bloomberg data that begins in June 2005.
“Any contagion into the Gulf Cooperation Council markets is completely unjustifiable, putting aside company specifics with exposure to Egypt,” said Rami Sidani, the Dubai-based head of Middle East and North Africa investment at Schroders, which oversees about $230 billion of investments worldwide. The crisis “is a good entry point in stocks we like,” he said.
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