Covid-19

Estimating Corporate CapEx in Saudi Arabia

COVID-19 has been a double whammy for the Saudi Arabian economy. First, the lockdown and curfew measures has affected the economic activity. Second, because of global lockdown, oil prices fell with the demand for oil falling sharply. Therefore, the output of Saudi corporate sector is also expected to be very much low for the year 2020 if not beyond. Average Fixed Capital Assets held by Saudi Listed Companies(2015-2019) Saudi listed companies held fixed capital assets measured by the average outstanding...

Defensive sectors in GCC-A great bet in today’s times

The 2020 stock market crash due to Covid-19 has been fast and short, if the markets do not fall to the lows of March 2020 again. The Oil price crash and social distancing measures to prevent the spread of Covid-19 has impacted sectors in the GCC in different ways.This can be observed in the current level of GCC Sector Indices. We make a comparison of the current levels of GCC sector indices with that of 52-week high and 52-week lowto...

How has liquidity in Saudi Tadawul fared during COVID-19?

Liquidity is one of the key indicators of a stock market and is a fundamental requirement for market efficiency. In recent years, Saudi Arabia’s equity market has implemented reforms, such as relaxation of foreign ownership and has achieved milestones such as inclusion in key indices including the MSCI Emerging Market Indices. With the listing of Saudi Aramco, it has also become one of the top 10 markets globally, by market capitalization. Given the market’s importance in GCC and globally, the...

COVID-19 brings to the fore GCC’s Fiscal Vulnerability

Revenue from oil forms significant portion of overall revenue for GCC countries, with 20-year(2000-2019) average at 74%. This dependence on oil as revenue source has long been a pain point for GCC’s fiscal position, surfacing during periods of low oil prices and receding during periods of high oil price.In the backdrop of fall in oil prices due to COVID-19, building a sustainable fiscal policy in GCC has resumed higher importance. Ascend to Prosperity Referred to as black gold, oil has...

COVID-19 may force GCC companies to cut dividend payout

Dividend payments have been an important tool to get investors to buy shares of companies as dividends provide a return on investment even during periods when the markets are down. GCC Companies listed on stock exchanges have provided consistent dividends in recent years. Due to Covid-19, many GCC Companies may be forced to cut dividend payouts due to fall in earnings and need to preserve cash. We examine the impact on dividends due to the pandemic and its ramifications for...

COVID-19: GCC has mostly resorted to monetary measures

The COVID-19 led health and economic crisis has pushed many governments around the world to respond with a wide armor of fiscal and monetary actions that far exceed the measures taken in the past when the Global Financial Crisis happened in 2009. The measures were announced in a quick and concerted manner across the developed countries, emerging countries, and less developed countries. GCC countries also acted with alacrity in providing stimulus measures: to meet the COVID-19 Impact that hit them...

10 million and counting: COVID -19 breaches a grim milestone

As 2020 began with new hopes, little did the world know about an emerging threat coming out of the most populous country on Earth, a virus which spread like a wildfire in no time. The contagious nature of the virus made it more so difficult to contain it. The World Health Organization (WHO) declared the outbreak a Public Health Emergency of International Concern on 30 January 2020, and a pandemic on 11 March. On 28th June 2020, the global confirmed...

Edtech – It’s Promise and Future

The EdTech industry is transforming traditional learning methods by blending digital capabilities and the widespread penetration of digital devices within the general population. EdTech platforms have mushroomed to encompass adaptive learning, animated content, gamification, etc. (Khaleej Times). Globally, the EdTech industry recorded a total investment of USD 18.7bn in 2019, following a record of USD 16.3bn in 2018 (Ibid ). It is notable that the combined investments in 2018 and 2019 are greater than the total combined investment recorded from...

Kuwait Sector Indices: Comparison of declines due to COVID-19 and 2014-16 Oil Price Crash

The 2020 market crash has been fast and short, if the trough of March 2020 holds. Lockdown to prevent the spread of COVID-19 brought about an uneven impact on sectors. While some sectors like airlines came to an absolute standstill, some sectors like technology stand to gain from the lockdown. These differences have reflected in the performance of equities too. A sector-wise comparison with the previous market crash of 2014-16 highlights the difference in COVID-19’s impact on sectors and what...

Fund houses revise their long-term capital market expectations – What has changed?

The unprecedented turn of events in recent times has drastically changed the outlook of the global economy in the near term. The economic disruption caused by COVID-19 has triggered global central banks and governments to act, changing the whole landscape for financial and real assets both in the short and long term. Things look much different now as compared to the end of 2019. Several asset classes witnessed a sharp sell-off and a subsequent recovery in recent months. Everything from...