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Economics & Strategy – Middle East & North Africa Equity Strategy: First

Bank of America Merrill Lynch’s seven-member squad rockets from runner-up back to first place.


Michael Harris,
Stephen Pettyfer
& team
Bank of America
Merrill Lynch
"They are the best stock pickers in the region."

Bank of America Merrill Lynch’s seven-member squad rockets from runner-up back to first place. The team, which is co-captained by Michael Harris in London and Stephen Pettyfer in Dubai, covers 46 stocks and is bullish on Saudi Arabia, owing to the kingdom’s dynamic economy. In May the International Monetary Fund projected real gross domestic product growth of 4.4 percent this year — a forecast that was immediately dismissed by the nation’s Finance minister, Ibrahim Abdulaziz Al-Assaf, as being too conservative. (Saudi Arabia’s GDP expanded by 6.8 percent in 2012.) Top picks include telecommunications services provider Etihad Etisalat Co., better known as Mobily, which the strategists have been recommending since November 2009. Although the stock surged 32.4 percent in the 12 months through May, it’s still cheap, according to Pettyfer. Another favorite: Al Rajhi Bank, which is poised for “accelerating earnings growth as net interest margins stabilize,” he believes. Clients are impressed. “These frontier markets have grown more fashionable in the last couple of years, but there’s still no one who does a better job than Merrill on differentiating in terms of asset allocation, country and sector,” says one. Harris, 43, also oversees top-ranked equity strategy teams in three other sectors: CEEMEA, Emerging Europe and Turkey. Pettyfer also co-directs, with Haim Israel, the No. 2 crew in Telecommunications. — Paul Sweeney


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