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Franklin Templeton sees MENA growth

(Reuters) / 15 June 2011

DUBAI - Franklin Templeton expects its asset management business in Middle East and North Africa (MENA) to grow despite recent political unrest, a top executive said.

“Our local asset management business has grown 25-30 percent year-to-date despite the unrest. We would expect to see growth going forward,” said Andrew Ashton, head of Franklin’s Central Eastern Europe, Middle East and Africa business.

Templeton bought Dubai-based boutique investment firm Algebra Capital in January and has renamed it as Franklin Templeton Investments (Middle East) Limited. — Reuters

The US firm, with over $735 billion in assets under management, is bullish on countries like Saudi Arabia, Qatar and the UAE  mainly due to increased infrastructure spending and growth in consumption, said Joe Kawkabani, FTIMEL’s chief investment officer for equities.

“You will continue to see volatility in the region but the long-term prospects remains intact. We like the Gulf better within the whole region,” Kawkabani told reporters.

A potential upgrade to an emerging market status for Qatar and UAE by index complier MSCI will also bode well for the region as it will draw more international institutional participation, he said.

Both the countries are in review for a potential upgrade with a decision expected later in the month.

Growth is also seen in the local fixed income markets where a recent spate of bond issues is seen reviving the market, said Mohieddine Kronfol, FTIMEL’s chief investment officer for fixed income and sukuk, or Islamic bonds.

“There is a primary need to raise money for many firms in the region to meet refinancing needs and the appetite for these issuances are also strong. We see a strong pipeline in coming months,” Kronfol said.

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