Franklin Templeton launches MENA Fund
Dubai, June 17, 2008
Franklin Templeton Investments has launched FTIF Franklin MENA Fund, a subfund of Franklin Templeton Investment Funds (FTIF), a Luxembourg-registered SICAV.
The fund is managed by Franklin Advisers (part of the Franklin Templeton Investments group) based in San Mateo (California) with the Dubai-based asset manager Algebra Capital acting as sub-advisor. Franklin Templeton Investments acquired a 25 per cent stake in Algebra Capital in August 2007.
The fund aims to achieve long-term capital appreciation through investing in securities across the entire market capitalization range in markets in the Middle East and North Africa (MENA).
The MENA region includes, but is not limited to Saudi Arabia, the UAE, Kuwait, Qatar, Bahrain, Oman, Egypt, Jordan and Morocco. To achieve this aim, the fund will invest in stocks capable of outperforming the market through economic cycles.
MENA, whose economies grew substantially in the past years, is the eighth-largest economic region in the world, according to the International Monetary Fund.
While high energy prices have undoubtedly boosted growth in many countries in the region, there is also a strong demand for consumer and financial products and the region’s young population is expected to drive demand for the real estate sector.
Stock markets in the MENA region have been opening up and introducing better systems and processes, resulting in increasing interest, both from local and global investors. As public markets have grown, so has the variety of sectors represented. Market capitalization is low, leaving room for much potential growth.
Valuations tend to be attractive due to strong corporate earnings In addition, MENA markets seem to show little or no correlation with markets in the rest of the world. Correlation between markets in the region itself is also low. Transparency has also been improving.
“This is an opportune time to consider the MENA region as a portfolio diversifier. The MENA region represents one of the great frontier market investment opportunities, offering the potential for long-term growth and low correlations with other markets. There is diversification from oil revenues and the expansion of other sectors is increasing substantially,” said CEO of Algebra Capital Ziad Makkawi.
“Franklin Templeton Investments and Algebra Capital have had successful fund launches together in less than one year of partnership. We look forward to bringing this innovative and dynamic relationship into our present and future business dealings,” added Makkawi.
Franklin Templeton Investments has a long history of managing emerging market funds. It opened an office in the UAE in 2000, providing sales and marketing support for their distributors in the region. – TradeArabia News Service