DUBAI: Middle Eastern funds plan to increase their investments in the UAE over the next three months while keeping their exposure to other countries in the region at current levels, according to a Reuters poll.
Fund managers expressed optimism in the UAE, with more than half of the 11 polled in February saying they would increase their allocations to the country.
“Valuations have been depressed in UAE as of late and is poised for a rebound,” said Talal Samhouri, head of asset management at Amwal LLC. “We have increased [and continue to increase] our allocation in UAE for the time being,” he added.
The Dubai market has rebounded this year on the back of strong earnings from companies linked to Emaar Properties.
Dubai’s benchmark index is up 4.2 per cent so far this year. Shares of Emaar Properties have surged 18.6 per cent year-to-date, benefiting other real estate firms as well. “The Emaar Group companies’ fourth quarter results have ignited optimism in the Dubai market,” said Vrajesh Bhandari of Dubai’s Almal Capital.
“These stocks were heavily beaten down were presenting deep value ... We expect further positive price action going into the dividend season.” Bhandari also said he expected money to be rotated out of Saudi Arabia and into the UAE starting around April. About one third of fund managers expected to decrease their investments in Saudi Arabia, as well as Qatar.
In last month’s poll — which gave the least bullish January reading since the poll began in 2013 — managers said they would increase investments in Saudi Arabia and Kuwait in anticipation of inclusion in emerging markets indices.
Investments in Egypt appear more attractive, with 45 per cent of the polled managers saying they would increase investments there, up from one quarter last month.
The Egyptian market is up 13.7 per cent so far this year, outperforming other markets in the Middle East region.
Managers overwhelmingly expected their overall equity and fixed income investments in the region to stay the same.
Exposure to Turkey and Kuwait is also expected to stay unchanged.