09 Nov 2017
Perspectives November Publication

Welcome to the ninth edition of Perspectives.
 
Many investors were expecting some type of market correction in October, but the only thing that crashed last month was volatility. Despite being historically the most volatile month of the year and even as we commemorated the 30th anniver­sary of the Black Monday stock market crash, October 2017 happened to be the calmest on record for equities. Indeed, the CBOE Volatility Index recorded the lowest monthly average in its history, according to data compiled by Bloomberg. 

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16 Oct 2017
MENA Q4 Outlook 2017

While we continue to see very interesting opportunities across markets in the Middle East, the region remains out of investors’ radar mainly due to the lack of visibility on oil prices and geopolitical concerns. We believe that interest from investors should pick up as the oil market stabilizes and as Saudi Arabia gets closer to inclusion into the MSCI/FTSE Emerging Market indices in the first half of 2018. Our flagship MENA Equity Fund continues to perform well with a year to date performance of +13.86% (as of the 4th of October), outperforming the benchmark by +10.03%.

Allowing women to drive in Saudi Arabia might sound trivial for many, but we do see it as an important milestone towards economic diversification. To our opinion, the Kingdom’s biggest asset is its human capital and having half of the population idled has hampered economic growth.

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05 Oct 2017
Perspectives October Publication

Welcome to the eight edition of Perspectives.

Despite all the political noise and natural disasters, international markets continued their move in a favorable direction in the third quarter as investors cheered rising company earnings and improving global growth. As we discuss in this publication, the market outlook for the rest of the year seems pretty solid as the risks to economic and corporate profit growth seems rather low.

That being said, the current market context of low volatility is not supposed to last forever which means that a more dynamic asset allocation will be required at some point. In the “Portfolio Management section”, we look at the “3-way model”, a simple but highly effective trend following system which could potentially help asset allocators to identify regime change.

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07 Sep 2017
Perspectives September Publication

Welcome to the seventh edition of Perspectives. 

Risk assets have been again defying gravity over the last few weeks as the period of higher volatility which usually characterizes the summer has not been observed this year – at least for now. At the time of our writing, the Nasdaq is close its 52 weeks high, many Emerging markets are breaking out and credit spreads are near their tightest level of the year. Other surprises for investors have been the strength of the euro, the 10-year Treasury bond yields hovering at pre-election levels and…bitcoin reaching $5,000. 

So what’s next? There are signs that the long-awaited correction could still happen. Indeed, triggers for a “risk-off” trade have been piling up recently. Among them: the North Korea missile launch over Japan, the U.S. debt ceiling & budget negotiations, the impacts of hurricane Harvey in Houston (4th largest city in the U.S.), the fading of optimistic sentiment in Europe, the worsening of Brexit negotiation, the roll-over of China’s PPI and toppish PMIs around the world.

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13 Jul 2017
MENA Q3 Outlook 2017

MENA markets are still struggling to catch up with Emerging markets. MENA performance of +3.37% for the first half of 2017 came shy of the+18.43% for Emerging markets. Nonetheless, with Saudi Arabia’s addition to the MSCI emerging markets index watch list and a very strong chance of an upgrade next year, the region should start to attract more attention.

With the recent addition to MSCI watch list, momentum is expected to continue in Saudi as we head into the third quarter. The market should also get more support from increased government spending as we draw closer to year end (capital spending was budgeted 59% higher versus 2016). To a large extent the government is still the main driver of the local economy, and with more reforms coming into effect, their spending program should accelerate.

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09 Jul 2017
Perspectives July & August Publication

Welcome to the sixth edition of Perspectives.

The first half of the year is ending and despite some shaky sessions at the end of June, global equities had their best first half of the last 19 years. Emerging markets were very strong but even the S&P 500 performed well with its best first 6 months’ performance since 2013. Another remarkable fact has been the “Goldilocks” nature of this rally as US equities, long duration US Treasuries and Gold all ended the period with gains between 8% and 9%. Par pure coincidence, our Middle East equities fund generated similar gains in the first half (+9.1% to be precise) despite challenging MENA equities markets. This shows that effective active management can make a difference in our region.
 

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04 Jun 2017
Perspectives June Publication

Ramadan Kareem and welcome to the fifth edition of Perspectives.

Despite the extraordinary political environment in which we find ourselves, the vast majority of global equity markets are reaching new highs as investors begin to appreciate the rate of change improvement in the economy, and importantly, corporate earnings.

During this euphoria, some particular stories are catching the attention of the general public. The 20-year anniversary of Amazon IPO is one of them – this exceptional journey is our “Hot topic” of the month.
 

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04 May 2017
Perspectives May Publication

Perspectives explore investment opportunities within international and MENA markets and across asset classes.

Volatility made a (timid) comeback in April and bond yields continued to surprise on the low side. Nevertheless, it was another solid month for international equity markets as the technology-heavy Nasdaq index crossed the 6,000 mark for the first time ever. Meanwhile, global investors’ focus is progressively shifting towards non-US international markets as Europe and selected Emerging Markets have been collecting impressive amounts of foreign flows recently. In the Middle East, markets have been range-bound but the major news was definitely the decree by King Salman of Saudi Arabia to rescind salary cuts and reinstate bonus payments to thousands of civil servants.

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05 Apr 2017
Cross-assets Quarterly Outlook

Equity risk premium for the markets is still higher than long term average showing absence of bubble in the markets

Forward free cash flow yields on major markets are higher than long term average signaling strong cash generating strength of corporates

Emerging Markets are now trading at a wide discount to US equities

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02 Apr 2017
MENA Q2 Outlook 2017

Perspectives explore investment opportunities within international and MENA markets and across asset classes.

The “Trump” rally which began on November 8th continued in February. After a brief pause at the start of the month, the vast majority of risk assets has resumed their uptrend. Unsurprisingly, most investors, including our clients and ourselves, are wondering if markets are now “priced for perfection”. This is the first topic of this second edition of Perspectives. While a pause might be due, we continue to believe that this bull market has further to go and that any pullback should be seen as a buying opportunity. Most favored assets remain those which should benefit from rising inflation (see the “Investment theme” section).
 

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01 Apr 2017
Perspectives Monthly Publication - April Issue

Perspectives explore investment opportunities within international and MENA markets and across asset classes.
 
In this edition, we share our view that investors might have to look at opportunities outside US equities in the months to come. This is precisely the focus of our monthly investment strategy (“Looking beyond US equities”) and the “Macro round-up” (“Brexit is official!). The “Hot topic” of the month is about the ETF bubble, which creates both risks & opportunities for fund managers. We then make the case for investing into Floating Rate Loans, an attractive asset class in a rising rate environment.

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01 Mar 2017
Perspectives Monthly Publication - March Issue

Perspectives explore investment opportunities within international and MENA markets and across asset classes.

The “Trump” rally which began on November 8th continued in February. After a brief pause at the start of the month, the vast majority of risk assets has resumed their uptrend. Unsurprisingly, most investors, including our clients and ourselves, are wondering if markets are now “priced for perfection”. This is the first topic of this second edition of Perspectives. While a pause might be due, we continue to believe that this bull market has further to go and that any pullback should be seen as a buying opportunity. Most favored assets remain those which should benefit from rising inflation (see the “Investment theme” section).
 

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01 Feb 2017
Perspectives Monthly Publication - February Issue

Perspectives explore investment opportunities within international and MENA markets and across asset classes.

In this first edition, we attempt to answer the question if it is the time to call for a top in the U.S equity market. We also share our view on the rising rates story in Global Fixed Income and highlight which sectors are the most likely to benefit from this new paradigm. 

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