Investors undeterred by Middle East crises

Aug 8 (Reuters) – Looking beyond the problems of a region beset by regime change in Egypt, a security crisis in Yemen and civil war in Syria, international investors are seeking out well-run businesses in Middle Eastern and even some North African stock markets.

The Middle East and North Africa (MENA) region is a diverse investment universe which includes both energy importers and exporters, and surplus and deficit economies, but enjoys cross-border trade, investment and even aid links.

Investors have focused on young populations across the region, which they believe will provide future workers and therefore opportunities for business growth. They say businesses are often able to carry on, regardless of political instability.

“Mankind is an animal of habit. After 2-1/2 years we have got used to living with unrest in certain countries such as Egypt,” said Nina de Martinis, fund manager at asset management company Amundi, adding that increased government spending and economic growth meant:

“MENA is one of the future development areas of global emerging markets.”

Stocks in the Gulf economies of Abu Dhabi, Dubai and Qatar have shown some of the most spectacular performances in the world this year. (see graphic)

That may not be a surprise, given these economies’ safe haven value in a region of conflict.

“Dubai has been a beneficiary of everything that has gone wrong – Syria, Libya, Egypt,” said Oliver Bell, fund manager at investment management firm T Rowe Price.

More of a surprise may be the performance of Egypt, which saw the ousting of President Mohamed Mursi last month, less than 2-1/2 years after its Arab Spring uprising.