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OPPORTUNITIES AND CHALLENGES IN THE REGION ASSET MANAGERS PRESPECTIVE

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

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OPPORTUNITIES AND CHALLENGES IN THE REGION ASSET MANAGERS PRESPECTIVE

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  1. OPPORTUNITIES AND CHALLENGES IN THE REGIONASSET MANAGERS PRESPECTIVE Ajay Kumar,CFA, FRM Head of Asset Management Qatar National Bank

  2. OPPORTUNITIES AND CHALLENGES ARE ENTWINED

  3. OpportunitiesEconomic 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

  4. OpportunitiesCapital 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

  5. ChallengesEconomic • Oil prices • Currency Pegs • Low savings Rate

  6. ChallengesCapital Market • Constricted Universe • Cross Holdings • Risks are Systemic • Limited Float • Investment Restrictions • Volatility • Market Asymmetry • Lack of Derivatives • Distorted Risk Premiums • Disclosures

  7. ChallengesBehavioral • 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

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

  9. THANK YOU

  10. Regional Volatilities

  11. Correlations Sectors

  12. Information Asymmetry

  13. Oil Price @6 bln output p.a and $ 40 budget, Surplus will 160 bln $ 07 Average Budget Price

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

  15. Correlations

  16. GDP Growth

  17. Govt. Expenditure

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