OPEN FRONTIERS
OPEN FRONTIERS
Stocks in emerging Europe, the Middle East, and Africa will rise 31% by the end of 2010 as cheap valuations, fast profit growth, and higher oil prices draw investors, according to a Dec. 3 Morgan Stanley report.
Michael Wang, the company's London-based emerging-markets strategist, wrote that the gain he expects from the MSCI EM EMEA (Emerging Markets Europe, Middle East, and Africa) Index would exceed the 20% estimated gain for global emerging markets. EMEA stocks trade at a 30% discount to global peers in the MSCI Emerging Markets Index on a price-to-earnings basis, Wang writes, and profits in the regions are expected to grow 46% in 2010. Energy and raw materials companies make up 40% of the index. For a broad play, Fidelity's Emerging Europe, Middle East, & Africa EMEA Fund buys stocks in all three regions. A number of exchange-traded funds, including Claymore/BNY Mellon Frontier Markets ETF and PowerShares MENA Frontier Countries Portfolio, also invest in frontier nations in these areas.
Copyright 2009 BusinessWeek
