Emerginvest’s Weekly Highlight: Middle East

Despite the extremely troubled US markets in the last week, especially in light of the dismal report from the US about the 500,000+ job losses in November, one area has posted extremely significant growth over the last week: the Middle East. According to the Emerginvest World Stock Markets Performance page: Qatar is up 5.69%, Saudi Arabia is up 5.29%, Jordan is up 5.19%, Palestine is up 4.02%, and Kuwait is up 2.15% in the last week alone. These represent five of the 14 world stock markets which posted over 2% gains last week (of the 120 that Emerginvest tracks) and are at a time when 53 other world stock markets are severely hurting – such as Canada and Switzerland who lost 12.44% and 14.88% of their value last week alone.
John Maulin highlighted the Middle East (specifically the GCC states of Saudi Arabia, the UAE, Kuwait, Bahrain, Qatar, and Oman) in his award-winning weekly newsletter. He discusses how these economies have been largely insulated from the global economic storm because of their immensely cash-rich oil reserves. Indeed, Mr. Maulin states: “…all of the GCC states — with the exception of Bahrain — are ranked in the top 20 of world oil producers, with Saudi Arabia and the UAE leading the pack. Saudi Arabia alone made $194 billion from oil exports in 2007, and $212 billion (in real dollars) between January and October 2008. The GCC states are so capital-rich that their usual financial management strategy involves attempting to soak up as much liquidity as possible in order to contain inflation,” and “… massive infrastructure and development projects such as Qatar’s liquefied natural gas facilities, Dubai’s fanciful real estate explosion and Bahrain’s attempts to convert itself into a financial mecca. Indeed, the GCC states have used the past several decades of oil wealth to engineer massive development projects and have become, in the process, quite reliant on foreign direct investment (FDI) and the technology and expertise that accompany it. Though Qatar and Kuwait are net exporters of FDI, the other four states are importers of FDI, from Bahrain’s modest 0.51 percent of GDP to Oman’s more substantial 4.67 percent of GDP.”
In the context of the global financial crisis, these cash-rich states are better equipped to deal with the global economic buffeting and look like relatively stable markets in the world. There are a number of ways to specialize within the UAE or Saudi Arabian markets, but even a broad ETF would be sufficient to capture some of the growth and stability in these markets while much of the rest of the world recoils to mounting substantial news of a world recession.

http://blog.emerginvest.com/middle-east-investing-in-qatar-the-middle-east-and-the-uae/