Post date: Oct 23, 2013 3:41:27 PM
Reuters Market Access Video -
ANCHOR QUESTION:
How do you deal with, I guess, I don't want to say constant political issues but in a way, there's a different sort of volatility when we talk about these regions. How do you factor that in when you're making investment decisions?
PORTFOLIO MANAGER OF T. ROWE PRICE'S AFRICA AND MIDDLE EAST FUNDOLIVER BELL :
I think we have to segregate between what we see on the daily news and the news tends to highlight the bad points within my region. But you know, we're talking about 65 countries across a huge swathe of this planet and you know, every country is actually slightly different. And whilst there are problems inNorthern Africa, on parts of the Middle East at any one moment in time, actually, from an investment point of view, there are a lot of very good places to invest. So, we have to just be cognizant of the risks but actually, we're going to find very good opportunities.
ANCHOR QUESTION:
Some of those opportunities according to your biggest holdings: Saudi Arabia, South Africa, and theUAE. What is the investment thesis for those regions? Are they all different?
PORTFOLIO MANAGER OF T. ROWE PRICE'S AFRICA AND MIDDLE EAST FUNDOLIVER BELL :
Sure. Yes, I think if you think about the Middle East, you have a, it's very divided between the haves and the have-nots. The haves are the ones that have the oil and the have-nots generally don't have the oil but have had the Arab Spring and this associated economic unrest. The GCCs, the Gulf Cooperation Council, Saudi Arabia, the UAE, they have got the financial resources to spend very aggressively on their own populations to actually create the jobs with the sort of demographic time bomb that perhaps they have. And so that's what we've seen. The Arab Spring has really awoken up that area and they announced spending very aggressively to basically create the jobs for their people. I mean, Saudi Arabia needs three million jobs by 2017 to be created because that's the number of people coming into work for --. UAE is slightly different because it's almost become a safe haven state of the region. You've got Libya, Syria, Egypt. On the other side, you've got Pakistan. Sort of the more wealthy individuals in those countries have actually parked their money in the UAE as a sort of safe haven and escape. So, and it's benefiting from the turmoil perhaps in its neighborhood. South Africa is very different. I mean the reason we have a lot of exposures to that is because there's a lot of companies that are now growing very aggressively into the rest of Africa into African countries that we can't get exposure to directly through stock markets. So, we find these companies give us that exposure to this phenomenal growth that we're expecting. In the next five years, 8 out of 10, the fastest growing countries in the world will come from Africa and the Middle East.