LONDON Oct 18 (Reuters) - Egyptian property developer Talaat Moustafa Group (TMGH.CA: ) and Nigerian bank UBA (UBA.LG: ) are among the share picks for Invest AD's asset management arm, a top executive at the Abu Dhabi-owned firm said on Monday, as it looks to Africa and Iraq for investment plays.
"Africa is where the Middle East markets were in 2002/03/04, or where the southeast Asian markets were in the early '90s. We are just entering the decade of Africa," Mohammed al Hashemi said at the Reuters Middle East Investment Summit.
"Iraq is ... getting back on track and it's a country that cannot be allowed not to succeed."
Invest AD manages investments for the Abu Dhabi government and its asset management arm manages investments for institutional investors.
Its emerging Africa fund had $38 million under management at end-Sept and the portfolio has risen more than 18 percent this year.
Invest AD is also setting up a $100 million Africa fund together with Japan's SBI Holdings (8473.T: ), and launching an Iraq equities fund.
LIQUIDITY LIMITS
Growing levels of wealth in resource-rich Africa are a boon for consumer goods and financial services, Hashemi said.
Funds investing in emerging Africa could reach $300-400 million under management before they start to struggle with the relatively low levels of liquidity in these markets, Hashemi said, but in Iraq liquidity is a problem at a fund size of just $100 million.
The existing Africa fund invests in between 20 and 40 listed stocks and its largest country of exposure is Egypt, followed by Nigeria.
TMG, Egypt's largest property developer, will see growth due to Egypt's rapidly rising population, Hashemi said, while in Nigeria banks such as UBA have performed well under a tougher regulatory regime which saw the central bank rescue nine banks last year in a $4 billion bail-out. UBA was not one of the rescued banks.
Meanwhile Safaricom (SCOM.NR: ), Kenya's largest telecoms firm, has an 80 percent market share there but has the potential to increase revenues further through data services, Hashemi said.
IRAQ
In Iraq, Hashemi said Invest AD was still putting together its portfolio, but areas of interest included infrastructure, education and consumer themes such as financials and telecoms.
Whereas in 2009 there were sharp rallies in the BRIC (Brazil, Russia, India, China) stock markets, the Middle East and African markets have outperformed this year, Hashemi said, pointing particularly to Kenya , up more than 40 percent, and Ghana , up more than 20 percent.
The MSCI global emerging equities index .MSCIEF has risen 12 percent this year.
"People are feeling more confident, that the worst of the crisis is behind us," Hashemi said. "They feel ready for the next step."