GCC

Reasons for poor Analyst Coverage in Kuwait

The present scenario Compared to all other stock exchanges in the GCC the number of large- and mid- cap stocks, as per the above definition, is much lower in Kuwait, than in peer countries, whereas the number of small-cap stocks is over 91% of the market. Qatar has the most even cap divide, while Kuwait sits at the other end of the spectrum. In terms of analyst coverage (as a percentage of all stocks in the exchange), Kuwait is the...

Corporate governance in the GCC: How current practices can be further enhanced and how existing challenges can be overcome

CORPORATE GOVERNANCE By M R Raghu   Companies that have effective corporate governance mechanisms can instill a sense of accountability and transparency in organizational leaders. In an age of dynamic technological developments that are empowering various stakeholders to monitor and question organizational actions, a functioning corporate governance setup will help in building deeper public trust. There are several factors, both international and regional, that are pushing companies in the GCC toward more proactive corporate governance practices. There is now intensified...

GCC liquidity squeeze could spur reforms: MR Raghu – Low oil prices could result in deficit of 7.9% of GDP in 2015

Raghu pointed out that the recent fall in oil prices by over 61 percent since June, 2014 due to a host of factors such as shale oil revolution in US, OPEC decision to retain their output levels amid signs of tenuous demand growth had spilled over into the GCC financial system through banking channels, leading to spurts in overnight lending rate. Raghu added that GCC countries continue to be heavily reliant on hydrocarbon revenues, despite their diversification efforts. IMF expects...

GCC Markets – Who created value in the medium/long-term?

The main goal of an investor or a money manager is to create wealth - be it through capital appreciation strategy, dividend strategy or a capital preservation strategy. Unfortunately over the last 10 year period (2005-October 2015) all but Muscat stock exchange failed to create wealth for investors . That said, looking at the 5 year data, UAE and Qatar posted remarkable returns compared to its peers. Dubai and Abu Dhabi posted 16% and 11% five year CAGR respectively while...

Implications of the Chinese Crisis for GCC Economies & Markets

According to a report published by Marmore (Is China Stalling?), the ensuing volatility in global markets was exacerbated by fears of rapid economic slowdown in China - the largest economy in the world (PPP terms), which stoked fears of impending global recession and led to a massive sell-off. Figure 1: Black Monday (August 24, 2015) Source: Reuters China, which now accounts for almost 15% of global economic growth, was perceived as an important global growth driver. Economists opined Chinese growth...

Implications of the Iran Nuclear Deal for GCC

On July 14, 2015, it was announced that the P5+1 -- the United States, the United Kingdom, France, China, Russia and Germany -- along with the European Union (EU), had achieved a long-term nuclear deal with Iran . According to the U.S., the deal will “[…] will verifiably prevent Iran from acquiring a nuclear weapon and ensure that Iran's nuclear program will be exclusively peaceful going forward.” Table 1: Key Elements of the July 2015 Nuclear Deal Key provisions of...

Expo 2020: How will Dubai benefit?

Connecting Minds, Creating the Future In 2020, the UAE will host the World Expo, which is held once every five years for the duration of 3-6 months. The history of expo dates back to 1851, when ‘The Great Exhibition’ was first held in London. Since then, different regions of the world have hosted it at regular intervals, but this would be the first time the event is being hosted in the MENA region. Themes for the expos are usually broad,...

Unified Stock Exchange for GCC

Several factors argue for the case for a unified stock exchange in the GCC region including increased trade volumes, improved liquidity and lower trading costs on back of economies of scale (MENA Asset Management Policy Perspectives, Markaz Research) . However, the first step towards such unification of stock exchanges requires the union of currencies and harmonizing of monetary operations undertaken by the GCC central banks. Initially proposed in the early 2000 after the successful adoption of the Euro, the approval...