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MENA Markets Headed for Correction: S&P |
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08.11.2009 |
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DUBAI -- Standard & Poor's said the Middle East and North African markets are headed for a correction, with the decline in global equity markets likely to trigger a downturn in regional equity prices.
Fund managers polled by S&P's Fund Services agreed that recent rallies in the region are difficult to sustain, especially since most equities markets in MENA track movements on major markets such as Wall Street.
They also pointed out that MENA markets have risen too fast, too soon since February and could take a breather in the seasonally lean third quarter.
Some also expressed concerned about the low liquidity and the possibility of a sell-off in the US market, pointing out the correlation of returns between the US and the MENA region has been extremely high.
S&P said that favoured markets included Saudi Arabia, boosted by government spending, and Qatar, despite its deteriorating growth prospects. Kuwait is generally avoided as it is thought to be dominated by investment and real estate companies.
SICO Research recommended telecoms, consumer goods and defensive industrials, but is cautious on financials and the Dubai real estate sector.
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Source:www.zawya.com |
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