This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Three Middle East ETFs to Watch

NEW YORK ( TheStreet) -- As the world continues to depend on Middle East oil exports, the region's economy will boost, benefiting PowerShares MENA Frontier Countries (PMNA), WisdomTree Middle East Dividend Fund ETF (GULF) and Market Vectors Gulf States (MES).

Market sentiment has improved and global investors have been returning to the Middle East region since the Dubai financial crisis. During the depths of the financial crisis, oil prices plummeted and global oil consumption declined. The crisis impacted government spending and domestic investment, given the challenge of accessing both equity and debt funding.

Qatar is anticipated to lead the region, with GDP growth rates of 14.5% in 2010 and 17% in 2011, according to Qatar Statistics Authority. The country is expected to benefit from not only increased LNG production, but also growth in the non-oil sectors.

Similarly, other countries in the Middle East have started diversifying their economies to reduce dependence on oil revenues and increase employment, which will benefit the aforementioned ETFs.

Currently, equity markets in Bahrain, Kuwait, Saudi Arabia, Dubai and Abu Dhabi are trading at attractive PE multiples of 12.1, 12.0, 15.3, 6.2 and 9.0, respectively. In comparison, the S&P 500, China's Shanghai Composite Index and India's BSE Sensex Index are trading at PE multiples of 13.5, 15.6 and 18.6, respectively.

The three ETFs, PMNA, GULF and MES, gained 3.10%, 8.82% and 14.57%, respectively, year to date. Currently, these ETFs are trading above their 200-day moving averages.

PMNA is the largest of the three ETFs, with a market cap of $21.0 million. The ETF is based on the Nasdaq OMX Middle East North Africa Index and had investments of 20.1%, 19.7%, 19.7%, 15.8% and 10.2% in the UAE, Egypt, Kuwait, Morocco, and Jordan, respectively, on June 30. The portfolio is dominated by large-cap stocks and growth stocks that account for 43.7% and 71.1%, respectively, of the allocation, according to the ETF's Web site.

PMNA provides an attractive diversification opportunity, due to its low correlation with other indices. The ETF's correlations with the S&P 500 index, MSCI EAFE and MSCI Emerging markets are 0.02, 0.16 and 0.22, respectively.

GULF follows the WisdomTree Middle East Dividend Index, a fundamentally weighted index that measures the performance of Middle East companies that pay regular cash dividends on shares of common stock. The ETF closely tracks the index with investment allocation of 31.7%, 24.3%, 19.2% and 10.9% in Kuwait, Qatar, the UAE and Egypt, respectively.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
PMNA $13.61 0.44%
GULF $19.53 0.00%
MES $26.93 0.00%
AAPL $114.64 0.00%
FB $94.06 0.00%

Markets

Chart of I:DJI
DOW 17,550.69 -47.51 -0.27%
S&P 500 2,093.32 -4.72 -0.22%
NASDAQ 5,105.5460 -9.8360 -0.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs