MENA Stocks: Caution's The Word

We are reaffirming our cautious view of MENA stocks as deteriorating risk sentiment and a drop in oil prices weigh heavy on regional bourses. Dubai, Saudi Arabia, and Egypt saw steep declines in recent days in tandem with the sharp corrections in EM developed market equities. Ongoing financial turmoil in the eurozone, 'China risks,' as well as the lack of short-term catalysts (now that Q1 earnings season is over) could well spell further downsides for the short to medium term, as do regional risks such as rising tensions between Lebanon and Israel.

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