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Middle East funds bullish on equities

FundDubai-stock-market-001 managers in the Middle East show little sign of taking money off the table as a year of strong gains for Gulf stock markets nears its end, a Reuters survey showed. Dubai’s market, rebounding from the bursting of a real estate bubble in 2008-2010, is up 80 percent so far this year, while Kuwait is up 33 percent and Saudi Arabia has gained 18 percent.

While normally such gains might be expected to invite heavy profit-taking, most fund managers in the monthly survey of 16 leading Middle East-based investment institutions said they felt the markets had enough momentum to keep rising. The survey, conducted in the past 10 days by Trading Middle East, a Reuters forum for market professionals, found 56 percent of the managers saying they expected to increase their overall equity allocation to the Middle East in the next three months, while only 6 percent expected to reduce it. That was slightly more bullish than September, when 50 percent expected to increase equity allocations and 13 percent to decrease them.

Because of the spectacular gains in United Arab Emirates stock markets, opinion among fund managers is most sharply divided about them. Twenty-five percent of managers in the latest survey expected to increase their UAE equity allocations and 25 percent to decrease them, while the rest intended to keep them the same. In the September survey, the figures were 31 percent for an increase and 38 percent for a decrease.-Reuters