Growing Economies Push Middle Eastern and African Stocks to the Upside

Many Middle Eastern and African countries have thriving economies driven by the boom in commodities. The two regions boast dozens of large, fast-growing companies whose stock prices are on the upside.

If you want exposure to these regions, consider the T. Rowe Price Africa & Middle East Fund (TRAMX), a managed mutual fund whose primary holdings are from Egypt, U.A.E. (United Arab Emirates), South Africa, Qatar, Oman, Nigeria, Bahrain, Jordan and Lebanon. The fund holds no stocks from Israel. Many of the fund's holdings are included in the Dow Jones DIFC Arabia Titans 50 Index of large-cap stocks from the Middle East.

TRAMX, which was launched in September 2007, seeks long-term capital growth and has a relatively high risk to reward profile. Many of the fund's holdings are dependent on commodity prices (oil, gas, metals and bulk) plus continued economic growth and political and social stability. The majority of the fund's assets are in banks and financial services companies.

The fund does not charge a sales load, but at 1.75 percent, its annual expense ratio is high.

Here are ten of the fund's top holdings. Many of the stocks pay regular dividends.

Sample of TRAMX Top Holdings
Company & Web Site	Quote	Business	Arabian Titan
Aveng	AEGJ.J	South African-based construction and steel company.	No
Bank Muscat	BMAO	Largest bank in Oman.	Yes
Commercial Bank of Qatar	CBQK and CBQK	Banking and financial services in the Middle East.	Yes
Dubai Islamic Bank	DIB and DIB.DFM	Banking and financial services based on Islamic values.	Yes
EFG-Hermes	HRHO.CA	Egyptian investment banking company - securities brokerage, asset management, private equity and research.	No
Emaar Properties	EMAAR.DFM	Major property development in Middle East and elsewhere.	Yes
Murray & Roberts	MURJ.J	South African-based construction and engineering company.	No
Orascom Construction Industries	ORSDF.PK and OCIC.CA	Egyptian-based large construction company and cement producer.	Yes
Qatar National Bank	QNBK	Banking and financial services in the Middle East. Largest bank in Qatar.	Yes
United Bank for Africa	UBA	Banking and financial services in Nigeria and West Africa.	No

Related Funds

SPDR S&P Emerging Middle East & Africa ETF (GAF), an exchange-traded fund, is heavily weighted with financial and materials stocks from South Africa and Israel with a few holdings from Egypt, Morocco and Jordan.

The holdings of T. Rowe Price Emerging Europe & Mediterranean Fund (TREMX), a managed mutual fund, are concentrated on materials stocks from Russia and Egypt.

Algebra Capital and Permal Group operate hedge funds with exposure to Middle East and African stocks.

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Posted December 22, 2007.