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.
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