Bloomberg Asharq hosted Naji Nehme, Chief Investment Officer at Petiole Asset Management AG to discuss the repercussions of the Russian-Ukrainian crisis on international markets and approaches to mitigate the risk of this geopolitical crisis. Below are the highlights of the interview:
- Rising indices in the US forecast a 3% to 4% growth. This coincides with rising consumption, wages, and employment.
- Investors should consider valuations, especially in the US, where they rose more than 20 times.
- Europe is more exposed to the Russian-Ukrainian Crisis than the US, as Russia is the biggest natural gas and wheat exporter to Germany.
- Europe was late to recover from COVID-19 despite the positive outlook this year. Europe’s GDP is expected to grow 2% to 3%.
- Europe’s Purchasing Managers’ Index (PMI) is at or below 50, indicating contraction, while stock valuations were at 13 time earnings.
- Asset selection is key. We continue to invest in companies that are volatility-proof with lower debt.
- The Russian-Ukrainian crisis urges investors to return to the basics of portfolio diversification in sectors and geographies, and long-term strategies to avoid risk. This is the lesson from previous geopolitical crises.
- Sanctions may lead to more volatility in US and European markets equally. Investors must be prepared for this volatility.
- We continue to invest in long-term private equity, real estate and private debt, that are relatively unaffected by volatility.
Watch the full interview above.
