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, Schroder Investment Management Ltd. said.
Saudi Arabia’s Tadawul All Share Index fell 5.2 percent from Jan. 24 through yesterday and 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 since June 2005, the data show.
“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 Schroder, 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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