Markets should have a decent year in 2024, BofA exec says
"The region exports a lot of capital, so we help in those flows as well...it's a very interesting region in that regard, because it's quite a broad range of things that we see."
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WASHINGTON: Markets this year have started off reasonably well and barring large geopolitical shifts, they should witness "a decent year", a Bank of America executive said on Monday.
"Geopolitics is a little bit of a worry and China is a little bit of a worry just in terms of economic performance. But otherwise people are quite positive on opportunities", Bernard Mensah, president of international for Bank of America, told Reuters on the sidelines of the World Governments Summit in Dubai. Asked about potential effects of the war in Gaza and recent attacks on ships in the Red Sea, Mensah said that at the moment the bank was not witnessing "anything that's impacting flows in any material way", but warned caution was needed.
"We very much look forward to how that (war in Gaza) gets resolved" he said, adding that the Middle East represented an exciting area for business. "The region has been really on this positive trajectory for a while, the UAE especially. And in Saudi (Arabia), we've seen a real acceleration in terms of their economic outlook and their economic agenda," the executive said.
Mensah said the bank has seen M&A in and out of the Middle East, foreign direct investment into it as well as "good IPO activity". "The region exports a lot of capital, so we help in those flows as well...it's a very interesting region in that regard, because it's quite a broad range of things that we see."
U.S. COMMERCIAL REAL ESTATE
Earlier, Mensah told the summit audience that some assets in the U.S. commercial real estate sector may need recapitalising or restructuring but that the market is pretty sophisticated and efficient.
Regional U.S. bank stocks have endured a sell-off triggered by New York Community Bancorp this month, bringing exposure to commercial real estate in focus for analysts and investors. The industry has grappled with looming losses on commercial real estate loan books since early 2023, as the sector faced financing adversities amid high interest rates and lower office occupancy.
Treasury Secretary Janet Yellen said last week she was concerned about looming commercial real estate stresses on banks and property owners. However, Mensah said he did not see anything systemic in that sector.
"I'm not saying we're not concerned at all...But if you said to me that in my current horizon, do I expect it to tip into a systemic issue that causes a global recession, for example, or causes a market crash, I haven't seen that," he said.
