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Middle Eastern Equities and Oil

by: Bespoke Investment Group July 24, 2008 | about stocks: GAF    

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One would think that the equity markets in Saudi Arabia and other Middle Eastern countries would be soaring along with oil.  But a quick look at the Emerging Middle East & Africa ETF (GAF), along with Saudi Arabia's Tadawul Index proves otherwise.  While Saudi Arabia saw big gains from '02 to '06, its index has struggled since then. 

Looking at the first chart below, the first run-up in oil from $20 to $80 seemed to benefit Saudi Arabia significantly, but the second run-up from $60 to $140 hasn't done anything.  While the Middle East & Africa ETF (GAF) hasn't been around that long, it has done nothing since it began trading back in early 2007.

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Saudioil

Gafoil

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This article has 2 comments:

  •  
    Jul 24 02:00 PM
    Thank you, it would be interesting to hear more about this if someone was willing to do a more in depth write up
    Reply
  •  
    Jul 24 03:48 PM
    You guys have not done your homework. To quote IndexUniversity on GAF: "The fund, for instance, does not provide much exposure to the energy-rich markets in the Middle East, which are largely off-limits to foreign investors; instead, the fund is dominated by South African and Israeli exposure."
    See seekingalpha.com/artic...
    Reply
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