GCC

Do GCC Banks have adequate capital buffers?

The term liquidity is defined as the banks’ ability to fund rising assets and to meet its obligations on time. Therefore, when banks are unable to perform the primary tasks of funding assets and paying its obligations, it faces liquidity risk. Effective liquidity management is important to promote macro-financial stability. In the GCC countries, fixed exchange rate regimes provide reliable nominal anchors, but when combined with open capital accounts, they result in limited independence of monetary policy. At the same...

Foreign investment in GCC equity markets – Will the inflow levels sustain after index inclusions?

GCC countries are in the process of opening their economies to make them more attractive to foreign investors. The inflow of foreign funds through FDI would augur well for diversification of these economies away from oil to reduce their large oil dependence more so because its markets are cyclical and volatile. Attracting investments in non-oil sectors through equity markets is also one of the means to achieve this goal. Foreign equity inflows into GCC capital markets is expected to rise...

GCC Stock Markets – Kuwait continues to be the best performer

According to recently published Monthly Market Review for the June, GCC markets recovered lost ground during the month, as the positive performance of Saudi equities lifted the broader index. Kuwait continued its positive run in 2019, registering gains for the sixth month in succession. Kuwait’s All Share index rose by 1.9% while its Premier market index rose by 2.3% in June. In the first half of 2019, Kuwait emerged as the best performing market with a gain of 19.1%. The...

Imagining a Skills Policy for the GCC

In order to keep up with the workforce needs of the time, the Gulf Cooperation Council (GCC) nations need an interdisciplinary skills policy to mobilize and deploy skills throughout the ecosystem. The skills policy needs to be interdisciplinary in terms of covering requirements, activities, responsibilities and professional tools shared by varied stakeholders, public sector agencies, the private sector, academia and small businesses. The challenges of a pragmatic skills policy for the requirements of the GCC can only evolve through several...

How will trade war, Iran sanctions and OPEC supply cuts shape Oil markets in 2019?

Average crude oil prices have trended upwards for four consecutive months in 2019. The perception of oil risk due to factors like increasing geopolitical tensions triggered by the drone attack on Saudi oil vessels, the end of waivers for US sanctions on Iranian crude exports, unrest in Venezuela and sustained production cuts from OPEC may have all contributed to these higher oil prices. U.S. Energy Information Administration (EIA) reported that Venezuela’s oil output fell to 830,000 barrels per day (bpd)...

Use of Drones in GCC: Will disrupt logistics, shipping and e-commerce

The use of drones or Unmanned Aerial Vehicle (UAV) for commercial purposes has significantly received attention in the recent years. Adoption of drones is powered mainly by factors such as the increasing need for automation in firms, digitization of internal processes, improving the quality and potential of operational efficiency, and cost optimization requirements. Apart from adding value to various sectors in the economy with their advanced mechanisms and capabilities, drones are used for short range and light weight applications. One...

Automation in SMEs

Rise in automation is changing the ways of doing business. Similar to the digital and technological revolution, big business houses have been the first to adopt automation across their activities in the form of driverless cars, robot assistants, and delivery drones etc. For example, the Dubai Metro is already driverless, and the UAE is pioneering the Dubai Autonomous Transportation Strategy aiming to make 25 per cent of all trips autonomous by 2030. With progress in automation, the costs of sensors...

Combining technology with Brick and Mortar stores in the GCC: 6 ideas

Euromonitor International projects that the retail sales across Kuwait, Oman, Saudi Arabia and UAE will increase by more than USD 24 billion over the next five years. The UAE retail industry currently (worth USD 55 billion) will lead the trend reaching to USD 63.8 billion by 2023, at an estimated growth rate of 16%. Non-store modes of retailing such as online shopping, direct selling, social media and home shopping is estimated to grow by 78 percent from 2018 to 2023....

Is Digital Labor Contributing to Creation of Gig Economy in GCC?

The labor market is undergoing a perceptible shift from one that is characterized by stable or permanent employment to what is called a “gig economy” (BMO Wealth Management). The gig economy is one that is defined by temporary (or contracted) employment, wherein an on-demand and freelance (or contingent) workforce is the prominent working model. In the recent years, digital technology advancements and rampant economic changes (including demographic shifts) has overhauled the ‘business as usual’ status. The emergence of the gig...

GCC Stock Markets – Riding on global euphoria!

According to recently published Monthly Market Review for the month of March, performance of GCC equity markets improved with Kuwait being the top performer, followed by Saudi Arabia. Qatar remained flat while Oman and Dubai continued to retract. Globally, China‘s Shanghai index surged sharply, becoming the leading performer for the year as conducive policy environment, easing concerns pertaining to trade war and  improving sentiments resulted in increased inflows. Emerging markets continued the strong momentum during the month of March, particularly...