STOCK MARKET WATCH - Thursday, 26 January 2012

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63. Arab Spring Stumps Davos Investors Year After Egypt Revolt

http://www.bloomberg.com/news/2012-01-25/arab-spring-stumps-davos-investors-one-year-after-egypt-eruption.html

One year after Egypt knocked global finance off the agenda at the World Economic Forum, Arab officials returning to Davos may struggle to drum up interest in the region.

Across North Africa, where uprisings ended the autocratic rule of three men, economic growth has stalled, stock markets have slumped and Egyptian bond yields are at a record, with the nine-month treasury bill at 15.802 percent. Foreign direct investment in the Middle East and North Africa last year was the lowest since 2005.

Failure to lure investments threatens to hinder the transition to democratic rule and may spark more deadly protests, while energy-rich states, such as Saudi Arabia, may struggle to diversify their economies and cut the world’s highest youth unemployment rates.

“There’s certainly long-term potential in the Middle East, but that’s not necessarily a compliment,” said Michael Cirami, who helps manage $12 billion at Boston-based Eaton Vance. “What’s unfortunate is that there’s so much low-hanging fruit and so much the governments can do to improve the situation.”