Outlook

Oil Performance & Outlook – Positive Signals Abound

Oil markets were hit hard by Covid-19 pandemic and suffered losses of 21.5% in 2020. US Oil prices even went negative for a brief period in April. However, the markets initially staged a ‘relief rally’ from the lows in April/May as Oil producing countries together announced cuts in productions. Oil prices then began a period of ‘cyclical consolidation’ with prices around the USD 40/barrel mark until November. Then began the stage of ‘structural repricing’ aided by various factors. Vaccine announcements,...

Kuwait Economic Themes & Investment Implications 2016

Acording to Marmore’s Kuwait economic themes report, Kuwait continues to be extremely reliant on oil for revenues. On an average, hydrocarbon revenues accounted for c.80% of overall revenues in the past five year period (2009-2014). While part of the oil revenue is saved as sovereign wealth fund, most is channelled to the local economy in the form of wages for public sector employees, large scale subsidies (energy, electricity and water), capital transfers and generous grants for its citizens.     ...

Qatar Economic Themes & Investment Implications 2016

With the second lowest fiscal breakeven oil price (USD 57.8 per barrel) and the presence of ample fiscal reserves and buffer (172 per cent of GDP), Qatar is expected to withstand the current environment of low oil prices better than its regional peers. According to Marmore’s Qatar Economic Themes report,the country plans to spend USD 200bn on infrastructure as part of its 2030 development plan and this  has lured foreign contractors to what promised to be big profits, but project...

UAE Top Economic and Investment Themes for 2016

According to Marmore’s UAE economic themes report, Hydrocarbon sector is expected to contribute positively to real growth in 2016 as the phased increase in oil production happens. UAE had earlier set a target to raise its production capacity by 30% in 2020. Non-hydrocarbon growth is expected to be moderate in 2016, amid the lower oil price environment, as government expenditures are reined in. Diversified & Competitive Economy United Arab Emirates (UAE) has been the forerunner in implementing reforms to strengthen...

KSA Economic Themes & Investment Implications – 2016

Energy Prices Reform The government of KSA over the past few decades used perks such as lower energy prices, food & water subsidies and absence of taxes for individuals and domestic corporations to distribute the oil wealth to its citizens. The subsidized energy prices translate into significant costs for the government, estimated at USD 107bn or 13.2% of the gross domestic product in 2015. However, the low oil price environment calls for prudent assessment and reforms in these subsidies to...

Qatar Stock Market Outlook 2016

Price-to-earnings multiple for Qatar has fallen by 25% and currently stands at 11.1x. Qatar market is relatively undervalued when compared to the markets of Saudi Arabia and Kuwait. Investor interest in the market waned post 2014 owing to poor international conditions. Qatar also has the highest dividend yield in the region at 5.1%. We expect corporate earnings growth to be slightly negative in 2016. Earnings are expected to slightly reduce as infrastructure spending peaks. Real estate and commodities sector in...

UAE Stock Market Outlook 2016

Valuation: Positive  Price-to-earnings multiple for UAE fell by 13% in 2015 and currently stands at 10.4x. The fall has been the most in Dubai index, wherein, the P/E multiple contracted by 25% from 12.4x at the start of year to a current value of 9.3x. UAE markets seem attractive for investors with P/E ratio of 10.4 while its comparable peers Kuwait and Saudi Arabia are slightly overvalued at 14.4 and 13 respectively. On P/B basis, UAE (1.3) is slightly overvalued...

KSA Stock Market Outlook 2016

Majority of the sectors underperformed during 2015, with Media & Publication, Transport, Energy and Utilities and Real Estate being the exceptions. According to Marmore’s KSA stock market outlook 2016, Saudi construction and cement were the worst hit sectors as they lost 34% and 30% respectively. The decline in banking sector index by 14.9% during 2015 establishes the challenges in the form of liquidity tightening, as a consequence of low oil prices and increased government borrowings that will impact the banking...