The Gulf Cooperation Council (GCC) enjoyed the first two months of the New Year as stocks continue to rise according to a report released by SICO, a Bahrain based brokerage. United Arab Emirates and Qatar head the list of markets with substantial growth capacity and investors are encouraged to also explore earnings growth. The GCC is composed of six countries namely Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman.
In general, the equity markets registered a 24,6% growth with the S&P GCC Price Index. Dubai outclassed other regional markets with more than a 108% growth followed by Abu Dhabi with 68%. Stock indices also grew by 24,17% and 15,2% respectively. The transactions in these markets are mainly focused on retail participation.
Qatar is expected to continue its growth since it is going to host the Expo 2020 and the FIFA World Cup in 2022. However, international pressure for the review of its labor laws and upgrade of working conditions could slow it down. UAE and Qatar’s upgrade to emerging markets status by MSCI, a leading provider of investment decision support tools, and the possible merger of the Dubai Financial Market and Abu Dhabi indices will also serve as a major boost to their markets.
According to SICO, the stellar returns last year are however unlikely to be repeated this year; with the bull market no longer able to thrive solely on the back of an expansion in stock multiples. Nevertheless, the world economy is expected to grow by 3,7% this year and regional economies are expected to also follow the trend.
The report underlined the need to give more attention to earnings after Qatar acquired 13,41% this year due to the acquisition of foreign investors.
GCC markets on a flying start
