Economy

COVID-19: High Impact Sectors

As the COVID-19 pandemic continues to cast its shadow far and wide, businesses across sectors are likely to be negatively impacted. This has also reflected in equities, as stocks across sectors have taken a hit. Exhibit: GCC Indices and their YTD (in %) Source: Refinitiv; Note: Data as of 25th Mar 2020. Cyclicals includes Hospitality, Tourism; Basic Materials includes Construction; Industrials includes Aviation, Logistics. While initial concerns were of a spill over effect from China, the virus’ spread across regions,...

GCC policy interventions to mitigate the economic impact of COVID-19

The Coronavirus has spread across the GCC countries, besides its immediate impact on the public health and the well-being of the residents and citizens, the outbreak will likely have significant economic consequences across the region. As the key economic activities in the region’s critical non-oil sectors like tourism, transportation is curtailed, we can expect a greater macroeconomic implication. In response to the crisis, the gulf region has introduced number of new economic measures to mitigate the impact of the coronavirus...

Does Brexit pose an economic puzzle to the GCC?

This article originally published in AME Info. The UK’s vote to leave the European Union caused a period of uncertainty both in the financial markets and the political environment. The UK is the fifth largest economy in the world, and the Brexit process will have major economic repercussions. This led to countries and business entities strategizing their activities to respond to Brexit. The prospective cost to UK’s economy and impact of Brexit has brought into prominence its relation with the...

Dubai Stock Market: Is this just another correction?

For over two decades, Dubai has prospered as one of the fastest developing international cities, attracting people and capital from all across the globe. In 2009, Dubai needed a $20 billion bailout from oil-rich Abu Dhabi to escape a debt crisis caused by collapsing property prices. Dubai’s economy roared back and has grown by a third since then, buoyed by foreign trade, tourism and its status as the main regional hub for business services. Now, however, Dubai has hit another...

GCC Travel & Tourism: Build it but will they come?

As a part of their economic diversification strategy, Gulf countries have been increasingly focussing on the expansion of service sectors such as tourism, business, logistics and financial services. The huge stock of fiscal and foreign reserves  in the Arabian Gulf favoured the development of the tourism industry as a core strategy to attract both foreign tourists as well as business travellers. In 2017, the investment in the Gulf’s travel & tourism sector  was USD 34.3bn that is expected to rise...

Bankruptcy law in Saudi Arabia

Saudi New Bankruptcy Law. Saudi Arabia had no single bankruptcy law in place that prescribes procedures for businesses that face financial difficulty. The courts have traditionally refrained from declaring a debtor to be bankrupt until all feasible methods of debt enforcement are exhausted. This brought about a number of problems such as: No set procedure for collection of debts which leads to settlement of some creditors while others are missed out completely. Closure of viable businesses that may be facing...

Turkey Crisis: Impact on GCC

Turkey has been making headlines these past few weeks due to the massive rate at which the Turkish currency, Lira, has been depreciating against the dollar. The economy is under stress with the International Monetary Fund (IMF) downgrading the growth forecasts from 7.1% in 2017 to 4.4% in 2018 and 4.0% in 2019. Inflation levels are reaching record highs to an annual rate of 15.9 percent in July with the Lira depreciating over 40% against the U.S dollar so far...

Emerging startups in the Arab region – Can they make it big?

Arab Region's Top Start-ups Top 10 from GCC Source: Forbes, Marmore research UAE – Start-up hub of the GCC UAE has been the prime destination for budding start-ups in the Arab region offering a plethora of opportunities for prospective business owners. It is one of the most diversified economies in the GCC and home to some of the most highly valued start-ups in the region like Careem and Fetchr. Prime reasons to it are the measures taken by the government...

How much more can KSA cut production

Saudi Arabia plans to pump about 9.77mbpd in November, which would be its lowest output since January 2015. According to the Saudi energy ministry, the decrease in allocations for November includes a full 290,000-bpd reduction over and above the 486,000 bpd that Saudi Arabia pledged to cut as part of its commitment. Table: Saudi Arabia Oil Supply (Jan-2015 to Sep-2017) Source: Reuters, Marmore Research Considering Saudi Arabia’s commitment to do whatever it takes to end the oil glut, it is...

Saudi Aramco’s India Investment – To where is the oil flowing to?

Saudi Aramco is arguably one of the world’s largest Oil and Gas Company in terms of revenues and reserves that they control. To give an idea of its size, Aramco produces close to 10.3Mn barrels per day and its closest rival, the Russian state-owned Rosneft produces a third of that. Given their relative dominance in this space, it is surprising that only recently Saudi Aramco has opened its office in India and plans to invest in India’s downstream opportunities including...