MEA: Keeps On Keeping On

June 2007 | Sovereign Risk Rating

Middle Eastern and African sovereigns are still enjoying a strongly supportive external environment, but micro challenges are beginning to build. Fundamental global economic strength and a still robust commodity complex underpin a broadly positive macro picture. Market turbulence has indeed made an appreciable impact, with rising G7 bond yields putting EM instruments under a degree of pressure, but we still believe that MEA provides an intriguing diversification opportunity. Global investors have limited exposure to MEA assets as finite liquid assets are available, yet we think positive secular economic and political change is underway.

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