BALTIMORE, Sept. 10 /PRNewswire-FirstCall/ -- T. Rowe Price Associates
announced today that it is expanding its international fund lineup with a
new fund focusing on the emerging markets of Africa and the Middle East.
The T. Rowe Price Africa & Middle East Fund is a no-load fund that
seeks long-term capital growth by investing primarily in stocks of
companies located or with primary operations in these regions. The primary
markets the fund invests in include Bahrain, Egypt, Jordan, Kenya, Lebanon,
Morocco, Nigeria, Oman, Qatar, South Africa, and United Arab Emirates.
Other potential markets as they develop include: Algeria, Botswana,
Ghana, Kuwait, Mauritius, Namibia, Tunisia, and Zimbabwe. (This fund will
not invest in Israel, which is well represented in the firm's Emerging
Europe & Mediterranean Fund.)
The political and economic risks in the region make these markets
susceptible to extreme volatility and sudden and possibly severe price
declines. In addition, the fund has a high risk/reward profile since it can
invest in small- and mid-cap stocks in emerging markets and has a
relatively concentrated portfolio which will typically consist of 25 to 50
companies.
The fund is managed by emerging markets veteran Christopher Alderson,
who has 18 years of emerging markets experience with T. Rowe Price and has
led the emerging markets equity team for the past 10 years. While
acknowledging the risks, Mr. Alderson observes that, "these markets offer
significant long-term growth potential and diversification benefits for
investors who are willing to accept more risk by placing a portion of their
assets in a very aggressive portfolio. There are also many attractive
companies with sustainable growth and reasonable valuations."
Financial companies, for example, represent the largest sector
exposure, as commercial banks are benefiting from rapidly growing
economies. "Many of these companies are experiencing significant revenue
growth as demand for both retail and business credit increases," Mr.
Alderson says. "Significant reform of banking and pension markets in many
states should further encourage loan growth in both the Middle East and
Africa."
The fund also expects to focus on companies currently benefiting from
greater infrastructure spending, particularly in the Middle East, and also
from growth in wireless communications as rapid subscriber gains are
generating rising revenues.
Taking a regional view, Mr. Alderson observes that Africa is generally
benefiting from its oil and gas reserves, an increase in real commodity
prices, debt forgiveness, and increasing political stability combined with
economic reforms. He notes that excluding South Africa -- the continent's
largest economy -- growth in sub-Saharan Africa has averaged 7% over the
last five years, fueled by the boom in commodity prices. "Africa is the
forgotten continent," he says, "but the region includes some of the
fastest-growing economies in the world.
"While oil producers such as Nigeria are the most visible
beneficiaries," Mr. Alderson says, "countries exporting precious metals,
bulk commodities, and agricultural produce have all benefited from higher
commodity prices. The other major positive change in the region is the
reduction in many countries' debt obligations, due to cancellation on
favorable terms by creditor Western governments and global institutions."
The boom in oil prices in recent years has also produced strong
economies with substantial current account surpluses in the Gulf
Cooperation Council (GCC) countries, which include Bahrain, Kuwait, Oman,
Qatar, Saudi Arabia, and United Arab Emirates.
"Their economic fundamentals remain strong," Mr. Alderson notes, "with
real GDP growth of 6% in 2006 and substantial current account surpluses."
In addition, these governments are now opening up their economies to reduce
their dependence on oil prices, led by Dubai with several high-profile
projects in infrastructure, financial services, and tourism.
"In sum, the region provides opportunities," Mr. Alderson adds, "but
only for those prepared for long-term investing with a significant
tolerance for risk."
The Africa & Middle East Fund completes the regional coverage of T.
Rowe Price's emerging market fund lineup. The minimum initial investment is
$2,500 or $1,000 for Individual Retirement Accounts and gifts or transfers
to minors (UGMA/UTMA) accounts. As with other T. Rowe Price international
equity funds, this fund will impose a 2% redemption fee, payable to the
fund, on shares purchased and held for 90 days or less.
Founded in 1937, Baltimore-based T. Rowe Price (Nasdaq: TROW) is a
global investment management organization with $379.8 billion in assets
under management as of June 30, 2007, of which about 15% is invested
internationally. The organization provides a broad array of mutual funds,
sub-advisory services, and separate account management for individual and
institutional investors, financial intermediaries, and retirement plans. It
also offers sophisticated investment planning and guidance tools. T. Rowe
Price's disciplined, risk-aware investment approach focuses on
diversification, style consistency, and fundamental research.
For more information about any T. Rowe Price mutual fund, call
1-800-638-5660 or visit troweprice.com to request a prospectus, which
includes investment objectives, risks, fees, expenses, and other
information that you should read and consider carefully before investing.
T. Rowe Price Investment Services, Inc., distributor.
SOURCE T. Rowe Price Group, Inc.
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Related links:
http://www.troweprice.com
CONTACT:
Brian Lewbart, +1-410-345-2242, or Steven
Norwitz, +1-410-345-2124, or Robert Benjamin, +1-410-345-2205,
all of T. Rowe Price Group, Inc.
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