Middle East fund managers prefer Saudi equities: survey

Fund managers in the Middle East expect to increase their fixed-income holdings over the next three months and favor Saudi Arabia over the United Arab Emirates among equity markets, data from a monthly Reuters survey showed.

Managers prefer Saudi Arabia by a considerable margin, with 62 percent planning to increase their allocations of Saudi equities and none looking to cut them – the same levels when compared to last month.

Meanwhile, 23 percent of managers expect to raise their allocations of Kuwaiti stocks, while another 23 percent will reduce them.

Fund managers are still positive on balance toward regional equities but have become slightly less so, with 31 percent planning to increase allocations and none to reduce them, compared with figures of 62 percent and zero last month, the report added.

Gulf stock markets have underperformed compared to emerging markets over the last few months, amid expectations for more austerity measures to cut spending by GCC governments.

Meanwhile, 46 percent of managers plan to inject more cash in bonds, while 8 percent will reduce their holdings. Last month, 8 percent said they would raise their allocations and 15 percent would cut them.