Despite a degree of retracement over the past couple of days, last week Silk Invest’s markets of focus generally traded upwards despite the slide on Wall Street.
Dubai and to a lesser extent, Abu Dhabi continued to trade lower as market sentiment remains rather depressed in the UAE.
It is, however, becoming increasingly difficult to ignore the fact that some of the GCC markets are offering very good value at this point. The graph below illustrates the current value of our region’s main markets vs. their 5 yr highs. The chart pretty much speaks for itself.
We are out on the road again and have been speaking to many investors during the past few days. It is fair to say that many seem to be struggling to find places to invest with confidence.
Not too long ago, the vast majority of investors embraced the new reality of the BRICs in today’s world. They believed the fundamentals and put their money work. The early movers were handsomely rewarded for their courage and vision. Now that these markets have strongly traded upwards, it is time to realize there are other countries that, despite sharing similar characteristics, have been very much ignored.
It’s a new year which means a clean slate for investors and many have to skew their mindset from year end job-preservation to job-justification. It is fair to assume that more attention will go to the emerging markets that have been left behind in terms of valuation, many of which are located within our region of focus. For what it is worth, we have certainly started to notice a sudden increase of reverse enquiries from investors who seem very curious about these new markets…
The cover of Monday’s fund management section (FTfm) of the Financial Times was all about emerging market debt and how the pension funds are lining up to get in. I guess this may be a good time as ever to beat our drum a bit louder. In October we launched the Silk Road Income Fund. It allows investors to participate in the African, Middle Eastern and Eurasian fixed income markets through a highly diversified portfolio by investing in many of the markets featured on the chart below.
These countries offer the yield levels investors are currently looking for but still need to get comfortable with the fundamentals and the risks. It goes without saying that investors should diversify when entering these market. A fund like ours is probably as close to frontier markets ‘plug ‘n play’ as it gets.
I hope you can take the time to have a look at our latest market updates on
We look forward to keeping you updated
With kind regards,
The Silk Invest team
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