What is the asset class and geography you are focused on?
We are a Middle East and North Africa manager. Our core focus includes the Levant, North Africa and the Arabian Gulf, but excludes Turkey from our universe. We invest in equities. We are value-oriented, taking a bottom-up approach.
What is the outlook for the month ahead in your opinion?
Believe me, nobody knows. If they get it right they are all lucky. You can't predict a short-term investment decision. What we see on the ground, all the numbers from the real economy, statistics, meetings we have had with analysts, banks; all the data from the airports, sales, projects; all the headlines we are seeing in the UAE, we can definitely see positive momentum that might be reflected in the earnings. There has been a lot of market-moving news that could provide further indications of growth.
What are the main risks (either upside or downside) to the outlook?
There are global risks, in terms of repercussions from the European debt crisis. Any kind of negative surprises that could impact global markets might have short-term negative impact on equities in the region. Any positives on the political front, whether globally or regionally, given the backdrop of the Arab Spring, could also reflect in equity performance. Earnings disappointments, if the market believes that things are improving and better numbers do not filter through, that also poses a risk for the markets going forward.
What is the best investment at the moment in your opinion?
It is tough to say. There are a lot of good investments that still offer an upside. In the UAE, we still like the banking sector; we still like Emaar Properties. In Saudi Arabia, we think there is a good opportunity in the banking sector because of attractive valuations. We still believe equities will continue to do well on the back of 2012. We do not see fundamental reasons that will have a negative impact on the markets.
What was the best investment you were ever involved in?
In the UAE, Emaar, of course, is an investment we made serious money on. We also invested in Agthia and Aramex when they were below Dh1 before 2009, which gave us a lifetime opportunity to invest in great businesses at unbelievable valuations.
What was the worst?
Alba in Bahrain. After its initial public offering, the company was doing well. But when the government changed its contract terms for gas after the Arab Spring, almost doubling the price Alba paid for the commodity, it impacted the profitability of the company. It is still a good company, the management is solid, but investors did not anticipate this decision.