Mena region urged to diversify investments to sustain growth

The Middle East and North Africa region needs to reduce its heavy reliance on the oil sector and start to diversify investments into non-oil economies to ensure sustained growth, experts said.
Akber Naqvi, head of asset management at Al Masah, said in order to retain a sound economy status that would help the region sail smoothly even in volatile market situations, the Mena economies need to invest beyond the oil sector where non-oil GDP has been growing faster. "Where countries like Saudi Arabia and the UAE are doing well with their commitment going strong towards diversifying its investments to find new revenue engines; countries like Qatar and Egypt need to pick the right sectors to drive their GDP towards active growth," Naqvi told particpants of the Annual Investor Forum on Thursday.

"Recognising problems, rectifying errors and diversified plans for the future will play a strong role in the region and active portfolio management will be the key to finding positive revenue returns. For regional valuation, the region is cheap as compared to the rest of the world but fundamentally it offers great opportunities going forward," he said at the forum, which was organised by Al Masah Capital, a leading alternative asset management company.
Speakers at the forum provided indepth insights into opportunities, challenges and a roadmap to build a sound and diversified regional economy, said Shailesh Dash, founder and CEO of Al Masah Capital. Highlighting the changing political landscape in Europe and US and its spill over effects on global capital markets and Mena region, John Authers, senior financial columnist, and author of 'The Fearful Rise of Markets and Europe's Financial Crisis" said the Brexit would have a lasting negative impact but the confidence among consumers has stayed surprisingly high.
"A weaker Pound Sterling continues to act as buffer as inflation forecast has shot up in recent weeks. A tighter monetary policy could strengthen the dollar and tax policy remains crucial for everything that will follow." Authers noted that China had embarked on a fresh credit expansion in February 2016 which has had a significant effect on rest of the world. "Even if their currency is at its weakest in a decade, it still remains important to countries exposed to trade, such as the UAE."
Top executives from the world's most prominent financial and banking institutions held a panel discussion on the GCC healthcare services sector and its current status as an investment opportunity. The pannellists discussed the challenges and benefits of investing in the healthcare industry. The panel shared insights on the respective government's encouragement on having a private sector partner in the industry lateral. They said the governments' role as a regulator has definitely enhanced to complement the healthcare services industry, positively.
The panel agreed that institutional investors see great opportunity in the region's healthcare industry and it has huge potential to deliver returns. "This sector has always grown in the region with 2016 being a clear indicator where 90 per cent of the healthcare sector portfolio registered growth and some grew between 16 per cent-17 per cent in terms of revenue.
Another panel, discussing the real estate asset management services and its importance in growing regional markets, said Dubai, Abu Dhabi and Doha have emerged stronger real estate market owing to international projects, foreign investment flows and growing population. - issacjohn@khaleejtimes.com