Saudi, UAE and Egypt in focus at investment talks

The 4th EFG Hermes London MENA Conference began Monday, bringing together a cross-section of the MENA region’s leading companies and investors to discuss the challenges and opportunities prevalent in the region as it once again becomes an attractive investment proposition.

Of note are upticks in IPO activity in Egypt and the UAE at the same time as Saudi Arabia — the last great frontier in emerging markets investing and previously off-limits to foreign funds — is laying the groundwork necessary to open its $531 billion market to international investors.

The debate about the resurgence of the MENA region took center stage at the Emirates Stadium as institutional investors from 27 countries with aggregate assets under management in excess of $8 trillion gather alongside senior management from over 70 of the largest and most actively traded companies in the MENA region for the opening session of the conference — the largest MENA-focused investment conference in the United Kingdom.

This year’s conference sees some 200 fund managers from 117 institutions in Europe, the U.S., the Middle East and Africa obtain first-hand insights during three days of face-to-face meetings with C-suite executives from top listed MENA companies.

“MENA markets are on the upswing and are once again at the centerfield for global emerging markets investments, and shaping a game-day strategy has rarely been so interesting an exercise,” said EFG Hermes Co-Chief Executive Karim Awad.

“A sustainable revival of regional capital market volumes has been in the offing for some time and is starting to pick up, with IPO activity across the Middle East and North Africa gaining steam,” Awad added. “As markets continue to witness high levels of liquidity and strong performance, top MENA companies today offer some of the most compelling emerging and frontier market opportunities in the world.”

“A mix of oil economy and traditional emerging markets opportunities makes Saudi Arabia an especially interesting long-term play, raising the question of whether the long-anticipated opening of the Kingdom’s market will turn the MENA region into a well-defined sub-region within the wider emerging markets world,” said EFG Hermes Head of Research Wael Ziada. “We have two IPOs coming to market from Egypt and the UAE — including one set to take place during this conference — and a well-stocked pipeline, suggesting a return of the regional IPO market may be in the cards.”

“Against this backdrop, the need for an investment strategy rooted in on-the-ground insights has never been more important, a sentiment supported by the exceptional turnout at the conference,” noted EFG Hermes Securities Brokerage Co-Head Mohamed Ebeid.

“From the UAE and Qatar’s classification as MSCI emerging markets to renewed confidence in Egypt following a period of relative stability, regional capital markets are particularly exciting today. The opening of Saudi Arabia to foreign capital next year will only add to that,” Ebeid added.

The more than 70 presenting companies — with an aggregate market cap of around $290 billion — from 12 countries represent sectors ranging from financial services, energy, consumer discretionary, consumer staples and telecommunications services to health care, industrials, utilities, materials, and real estate and hospitality.