OPPORTUNITIES AND CHALLENGES IN THE REGION ASSET MANAGERS PRESPECTIVE Ajay Kumar,CFA, FRM Head of Asset Management Qatar National Bank

OPPORTUNITIES AND CHALLENGES ARE ENTWINED

Opportunities Economic Drivers Most Dynamic Era For The Region Sustained high oil prices Growth,Government spending and Capex Diversity in Hydro carbon Liberalization and reforms Demographic profile Density of Wealth All Round Economic Growth Physical and Social Infrastructure, Utilities, real estate Downstream HC, Ancillary units, Logistics Banking, Media, Entertainment and Tourism

Opportunities Capital Market Economy not fully represented Privatizations and Govt., Divestments Low penetration of Institutional funds Promising Emerging Market Low Correlations with other markets Opportunities for ALPHA Volatility Liquidity and Risk Capital State Patronage Demand for non conventional funding High Risk Appetite

Challenges Economic Oil prices Currency Pegs Low savings Rate

Challenges Capital Market Constricted Universe Cross Holdings Risks are Systemic Limited Float Investment Restrictions Volatility Market Asymmetry Lack of Derivatives Distorted Risk Premiums Disclosures

Challenges Behavioral Information Asymmetry Shortermism White Noise –Sometimes your best investments are the ones you don't make - DT Speculation, Herd Mentality –A public opinion poll is no substitute for thought – WB

I'd be a bum on the street with a tin cup if the markets were efficient. Warren E. Buffett

THANK YOU

Regional Volatilities

Correlations Sectors

Information Asymmetry

Oil Price Average Budget bln output p.a and $ 40 budget, Surplus will 160 bln $ 07

Shortermism Scaling Principle of Randomness Our Favorite Holding Period is forever - WB

Correlations

GDP Growth

Govt. Expenditure