MENA image tarred by macro shock stories, warns ING’s Said

If you live in fear of a conflict between Iran and Israel then you should stay out of equities altogether, according to ING’s Fadi Al Said.

Said, who manages the ING (L) Middle East & North Africa fund, told Citywire Global perceptions of the Middle East have been  over-simplified to project an image of an oil rich, politically volatile region.

He said this is most encapsulated by rising tensions between Iran and Israel – a theme he said is distracting investors from opportunities in growing economies such as Saudi Arabia and Qatar.

‘Iran is more of a concern than what is happening in Syria from an investment perspective,’ he said. ‘But this is not new, these concerns have been there for a long time and the risk has therefore been out in the open for years.’

‘It is a systemic concern and how it will affect commodities and oil supply to the rest of the Middle East and Europe, or the world economy, is hard to say. But I would say, if people are concerned about MENA because of Iran then don’t invest in equities at all.’

Said said his strategy is more focused on opportunities being created by internal investment and structural spending being undertaken in the region. This coincides with an increased opening up of Middle Eastern markets.

‘The main focus in the region is increasing participation and efficiency in domestic markets by improving processes. To be perfectly honest, they would be following this route whether they planned to open up their markets more or not,’ he said.

Said did echo comments made by EFG AM’s Moz Afzal about Middle East investors being keen to hold their own sovereign debt.

However, Said stressed in the case of Saudi Arabia, this was not the case.

‘Will markets like Saudi Arabia open up to foreign investors? Eventually yes but it will take its time and that is the way they want to do this. A market that opens up tends to be one that needs investment and these markets do not need it.’

The ING (L) Invest Middle East & North Africa fund has returned 41.7% in US dollar terms since its launch in December 2008. Over the same period, its Citywire benchmark, the S&P Pan Arab Composite TR, rose 32%.