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Why The MENA Region Can Survive U.S./China Trade Disputes

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Franklin Templeton


  • The world continues to focus on the potential market impact from ongoing US-China trade disputes.
  • Our on-the-ground presence in the MENA region allows us to see the full effects of meaningful social and economic reforms that governments have implemented over the past couple of years.
  • On the MENA fixed income side, we also started to see crossover investors from other emerging markets, following the GCC's inclusion into J.P. Morgan's EMBI in 2019, which now accounts for 18% of the index.
  • MENA equities are also becoming increasingly prominent within the emerging-market universe.
  • Economic growth in the MENA region is picking up at a time when we've seen a general loosening of monetary policies.

By Mohieddine (Dino) Kronfol, Chief Investment Officer, Franklin Templeton Global Sukuk and MENA Fixed Income; Bassel Khatoun, Managing Director, Director of Research, Director of Portfolio Management, Frontier and MENA, Franklin Templeton Emerging Markets Equity; and Salah Shamma, Head of Investment, MENA Franklin Templeton Emerging Markets Equity

There are tangible signs economies in the MENA region have reformed and evolved over the past decade, according to Franklin Templeton Global Sukuk and MENA Fixed Income's Dino Kronfol, and Franklin Templeton Emerging Markets Equity's Bassel Khatoun and Salah Shamma. They outline the opportunities they see in the year ahead.

In the Middle East and North Africa (MENA) region, we've seen signs that many of these economies have adjusted, reformed and evolved to tackle the headwinds that have come their way over the past decade or so. In recent months, new challenges have arisen.

As we move into a new decade, we've seen evidence of growth in a number of MENA economies, across both fixed income and equity markets.

A Word on oil prices

Before the novel coronavirus outbreak, we thought an oil price range of US$60-80 per barrel with a commitment from OPEC+ would be sufficient to support the global economy. Now we are seeing a potential slowdown in global economic growth and a dip in demand for oil as the virus spreads. We will continue to monitor the next OPEC+ meeting in March and see if members make supply cuts.1 We expect global growth to bounce back in the long term, and see oil prices rebound from current levels of about US$50-55 per barrel back to the range we anticipated before the virus outbreak.

Low Trade Exposure To The United States, China And The European Union (EU) Lifts Prospects

The world continues to focus on the potential market impact from ongoing US-China

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Franklin Templeton profile picture
Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,300 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and over $1.4 trillion in assets under management as of June 30, 2023. For more information, please visit franklintempleton.com and follow us on LinkedIn, Twitter and Facebook.

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