Monty Guild, chief executive officer of Los Angeles-based Guild Investment Management Inc. who oversees $200 million, commented on investment strategies in the Middle East and emerging markets, in an interview in Singapore.
On the impact of Egypt’s political crisis:
“We think it will create tensions and decrease the valuations of Middle Eastern and emerging European stocks and also the valuations of some countries outside of the Middle East, which have repressive dictatorial or oligarch governments.
“In the next two years, many governments will change in this kind of countries, because of Google, Facebook, MySpace, all of these social networking communications, which allow people to get together in groups and create change.”
On the Egyptian stocks to buy:
“If you want to buy in Egypt, buy shares in the major construction companies, the biggest companies in Egypt. Buy shares not in the airlines or anything that depend on commodity prices like oil. But buy shares in companies that will be growing, public works will be growing to employ more people. The military is concerned people don’t have work, so they will start more public work programs, construction programs, to stimulate growth and employ more people.”
Recommends Japan stocks:
“We like Japan because there’s no inflation and the deflationary problem that they had is solved by the inflation problem in China, India and Brazil.”
Japanese companies “have an ability to sell more products on an export basis to the developing world, where prices are rising and rising,” he said.
On emerging markets:
“We haven’t been in the emerging market for a few months. We have been buying Europe because the banking crisis in Europe caused many European stocks to get quite low.
“We still own Columbia but that’s the only emerging market we own. Within two months, we will start to own 10 to 12 percent emerging positions. As they come down, we will buy a little bit.” Guild Investment Management cut the portion of funds invested in emerging markets to 5 percent from 50 percent, starting in September, Guild said.
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