Pandemic Resistant GCC Stocks

Executive Summary

GCC stocks that thrived despite the COVID-19 pandemic

• 2020 has been a difficult year for GCC Stock markets and companies
• The benchmark index, S&P GCC Composite has lost 15% for the year till date1 despite a recovery in the past two months. In the midst of the pandemic, a minority of GCC Companies have outperformed the index.
• They tend to be in sectors considered essential like consumer non-cyclicals (comprises of food and retail businesses), utilities, healthcare, telecom etc.
• Many of the companies in these sectors have seen their revenues and net income increase in the first quarter of this year over last year.
• How are commodities shaping up during this pandemic?
• All of these sectors are driven by consumption and not dependent on the vagaries of the business cycle. In addition, sectors like consumer non-cyclicals cover consumer-oriented businesses like food and retail.
• Companies in the utilities and telecom sector also benefited due to their essential nature and many GCC organizations instituting ‘working from home’ arrangements.
• The lockdowns imposed in the GCC have not affected them and have instead resulted in increased revenue in the first half of 2020 for these Companies.

Table of Content

• Executive Summary
• Consumer non-cyclicals stocks have gained the most
• Saudi Arabian companies dominate the list of top 20 companies by gains
• Financials, Real estate, Energy companies amongst the biggest losers
• Conclusion