Templeton Still Like Frontier Markets. Addition Investments Expected.
Although most in the Persian Gulf area have reported healthy earnings in the past quarter, Persian Gulf “frontier” stock markets have plunged recently and all are firmly in the red.
As an example, Saudi Arabia’s Tadawul All-Shares index, which is the index tracks the performance of the largest Persian Gulf stock market, has lost about a third of its value this year by September, and the Dubai Financial Market is even worse. The Qatari market, which was previously the region’s stellar performer, is now 13 per cent below its starting point this year.
Not all frontier market fund managers are concerned by the recent downturn. Franklin Templeton, a venerable money manager with about $600 billion of assets under management, will be increasing its investments in the region. More.
When Harshendu Bindal, a senior director, recently visited a Hungarian insurer who is based in Vienna to talk about the frontier fund’s offerings, the first product the insurer asked for was a Middle East investment fund.
Franklin Templeton has a long, successful record of emerging market investment. Part of the company was founded by someone famous for his frontier investment, Sir John Templeton. The money manager opened an office in Abu Dhabi in 2000, before relocating to the Dubai International Financial Centre in 2004.
Franklin Templeton investment has over $4 billion invested in equities, fixed income, and real estate in North Africa and the Middle East region, the bulk of it in the Persian Gulf.
Mr Bindal is unperturbed about recent market activity. The “incredibly cheap” valuations of Middle East companies, combined with a more progressive regulatory environment and also improving capital markets, should help attract more long-term institutional money to these frontier countries.