Saudi Arabia’s move to allow foreign investors to take direct exposure in listed equities in the first half of 2015 is a once-in-a-lifetime opportunity that will allow fund managers to invest in a deep and broad market and reshape the Gulf capital landscape.

Egypt’s recovery story under-appreciated, boosted as it is by sustainable inflows of GCC aid, a much more credible economic policy and nearly three years of pent-up demand.

While the MSCI upgrade of UAE and Qatar to emerging-market status this summer will open a larger market for capital raising and inflows in the medium- to long-term, the short-run impact of the upgrade might not be as large as expected and, indeed, might be negative. In any case, we remain overweight Egypt, thanks to attractive valuations and a much lower risk of an MSCI downgrade from emerging-market status.

Recent political instability in Ukraine has once again reminded investors of the risks of investing in emerging market economies. Russian equities have fallen sharply, and the central bank has had to aggressively raise rates. This had followed months of broader volatility in mainstream emerging markets in which currencies have weakened – particularly in the so-called ‘Fragile Five’ of Indonesia, Brazil, India, South Africa and Turkey. Sovereign and corporate balance sheets are under scrutiny amidst slowing emerging markets growth