Mixed on fate of stocks.

Investors mixed on fate of stocks Investors are still cautiously optimistic about private equity activity in the Middle East and North Africa this year, according to a Deloitte report released yesterday. "Irrespective of global challenges, MENA continues to attract investors. In fact, 75 per cent of respondents expect an increase in investor appetite for MENA funds as a result of the continued underlying economic growth of the region, the significant financial resources here and, as yet, the wealth of untapped opportunities in the region," said Chris Ward, CEO of financial advisory services, at Deloitte Middle East. "This does not mean that investors are being reckless, however, thorough due diligence will once again come to the fore," he added. Almost two thirds of respondents, who were senior executives at private equity (PE) firms, said that they expect private equity investment activity in the MENA region to increase, or at least maintain, existing levels in the next 12 months, the report showed, with the consumer, power, and healthcare industries the most active sectors for the year. However, the global downturn has not left the region unaffected, the study added, with 53 per cent expecting returns to decrease - reflecting the reduced values of existing investments - and a further 83 per cent expecting entry multiples (ratios such as price to earnings) to decrease. "The dramatic global events of the past six months have had an impact on the region... PE firms are likely to hold onto their investments until multiples improve, but those with capital to deploy will be looking to pick up what they see as bargains," Ward added.

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