Mistakes to avoid when investing in Middle East and north Africa | Financial Times

Mistakes to avoid when investing in Middle East and north Africa | Financial Times:

The Middle East and north Africa (Mena) region is infamous among foreign investors for being difficult to understand. This lack of comprehension has created a risk premium far in excess of what is necessary for the region, leading to higher returns for informed investors.

The first mistake is to assume that Mena, a collection of 20 or so countries, is homogeneous. Although most people in Mena identify as Arabs and possess shared traits — which lead to a larger market — the cultural and economic differences around the region are substantial.

While these differences create diversification opportunities, it also means that, for example, hiring an investment analyst from the Levant to analyse the Gulf states will not create any more value than hiring someone who grew up in Britain.