Vaulting from third place, Bank of America Merrill Lynch captures its first top finish on this roster. Co-pilots Faisal Al Azmeh in Dubai and Istanbul-based Ali Yavuz Birdal are joined by two colleagues in London in Moscow in covering 16 regional chemicals names. “The sector ended 2013 strongly only to derate on weaker-than-expected Chinese growth and continued weakness in fertilizer demand in 2014,” says Al Azmeh. “This could result in weaker petrochemicals imports and, effectively, product pricing in the second half of 2014.” Indeed, through the first five months of the year, the group fell by 6.8 percent, while the broader market was up 3 percent. Accordingly, the analysts remain defensive, though they do recommend buying companies that offer high dividend yields, specific drivers and strong growth potential. These include diversified manufacturer Saudi Basic Industries Corp., the world’s largest petrochemicals maker. “Sabic has expressed several times its plans to expand into the U.S. for the purposes of growth and feedstock diversity,” he notes. “We highlighted in 2013 that such an opportunity would be a key catalyst, allowing Sabic to expand in other low-cost areas, utilize its large cash balance in relatively high-return-on-invested-capital projects and secure a position in a new market.” For 2014 they project that growth will be “carried out via junior ventures with international partners — in particular, those with which it has already invested in Saudi Arabia,” Al Azmeh says. The team is recommending Sabic with a price objective of 124 riyals, which represents a 7 percent upside to the shares’ value at the end of May. Al Azmeh, 29, joined BofA Merrill in October 2011 after covering Saudi financials for a year at Riyadh-based NCB Capital and working as a senior financial adviser at PricewaterhouseCoopers. He earned a bachelor’s degree in economics at Syria’s University of Damascus. Thirty-eight-year-old Birdal signed up with the firm a year earlier, moving from Istanbul-based FinansInvest, where he was the head of equity research. He covered Turkish equities at UBS for a couple years between stints at FinansInvest and holds a bachelor’s degree in business administration from Bogaziçi University in Turkey. |
NCB Capital Ali Yavuz Birdal Faisal Al Azmeh Birdal Istanbul