Investors interested in the Middle East should focus on the UAE and Qatar due to the high returns and good economic policy of those countries, said Dr. Gilles Feiler, Middle East and North Africa director at the Bank of Georgia. Speaking at a closed forum in London, Dr. Feiler said that investors should buy stock in companies that are likely to increase their dividends, have high liquidity relative to the region, and have at least one billion dollars in market capitalization.
The Middle East director noted that the Dubai Financial Market had increased its market capitalization by about 20% already since the start of the year, citing this growth as an example of the benefits of investing in the GCC, especially in the UAE and Qatari markets. He praised the economic policies of these countries’ political leaders, especially Sheikh Khalifa bin Zayed Al Nahyan, Ruler of Abu Dhabi, Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai, and Sheikh Saud bin Saqr Al Qasimi, Ruler of Ras Al Khaimah.
Dr. Feiler indicated that he had studied 1,200 Arab stocks, out of which he prepared a top ten list of the best investment opportunities. In particular, he was looking for companies with over US$1 billion in market capitalization, high liquidity, and a good chance of increasing dividends to shareholder over the coming several years. His list, which was presented to investors in attendance, was dominated by the financial sector, especially banks. Among his recommendations were Saudi Arabia’s SAMBA and Bank Saudi Fransi, the Commercial Bank of Dubai, the Abu Dhabi Commercial Bank, and the Emirates Islamic Bank.
There were two surprising entries on Dr. Feiler’s list. He recommended two industrial companies based in Egypt: Eastern Tobacco and Egypt-Kuwait Holding. His recommendation was based on these companies’ high dividend yields, which stand at 9.3% and 7.2%, respectively. Eastern Tobacco was also relatively an exception to his criteria, as it has only $750 million in market capitalization. Another industrial recommendation was Saudi Arabia’s Arabian Cement, with a current dividend yield of 6.6%.