Welcome to the fifteenth edition of Perspectives.

To paraphrase a former hedge fund manager, there is always a bull market somewhere. So far, 2018 is no exception to this rule. While global equities and bonds are still in the red on a year-to-date basis, Middle East equity indices and global commodities markets have been roaring. In this publication, we use the concept of an investment clock as a way of relating the economic cycle to asset and sector allocation. Recent news flow and market action seem to indicate that the clock is ticking. This could imply an important rotation where previous underperformers start to become the new market leaders.

In these times of uncertainties, we also find it useful to look back at some key portfolio construction principles – a topic we cover in the second section of this publication. We then move to what is at the core of what we do; identifying implementable investment ideas for our clients. The Hot topic of the month is on Commodities where a perfect storm might be brewing. The last sections are dedicated to our regional markets. We attempt answering two key questions coming from our clients. First, is there any “juice” left in the Saudi equities after their strong run? Second, with the DFM index trading at its lowest point since February 2016, are Dubai stocks cheap enough?

We hope you will enjoy this issue.