MON, MARCH 04 2019-theG&BJournal- When asked today at the EFG Hermes 2019 Pulse survey which FEM market ex-MENA will deliver the strongest performance this year for investments, 17% of the more than 1200 attendees representing global institutions and C-suite executives from companies across frontier and emerging markets favoured Nigeria, behind only Pakistan (19% ) and Vietnam (25%).
The EFG Hermes 2019 Pulse is one of the world’s largest real-time surveys of investor and corporate sentiment across frontier emerging markets.
Investors favour Egypt and Saudi Arabia in MENA. 65% of respondents said their MENA investments would be in Egypt or KSA.
Earlier Ali Khalpey, Chief Executive Officer of EFG Hermes Frontier, weight in on the economic progress and prospects of Nigeria telling the attendees at the EFG Hermes 15th annual One on One Conference in Dubai (UAE) that Nigeria is facing several key changes in terms of macro and equity performance, but visibility remains strong on 2019 earnings growth and yields continue to be attractive.
‘’Nigeria in particular saw increased participation at a time when the market is experiencing important changes that will generate new opportunities,’’ Khalpey said.
The survey also showed that Investors are very bullish on emerging market equities. Even though EM equities are up 10% since the start of the year, 68% of respondents see them going up by at least another 15% or more. This is probably because of the tempered expectations of rate hikes by the US Federal Reserve. 32% of respondents see no change in rates until year end and 45% seeing the potential rate increases capped at 125 bps.
A quarter of those polled say they plan to park their gains in Egypt and a fifth in the UAE away from the Saudi market. Investors with eyes on Egypt don’t foresee a big change in the FX rate, they expect the EGP to hover around 18 per USD 1, with low and relatively evenly-split risks between the up- and downsides
Almost half of the respondents believe that the percentage of EM AUM in passive funds is set to go over 50% from 30% currently suggesting that passive funds are seen taking over. Over a third see them growing to 40%.
Business operators and investors see risk factors arising from political uncertainty, 41% of the respondents said. 24% were more concerned over changing regulations and a similar percentage over poor consumer confidence.
They don’t expect huge rate cut by the Central Bank of Egypt (CBE) before the end of 2020. 37% see
Where to park your money? 27% of the respondents voted CIB in Egypt, followed by 20% giving the nod to Emaar in the UAE.