GCC stock markets will continue on a strong growth trajectory this year, led by the UAE and Saudi Arabia, on the back of strong macroeconomic fundamentals, a vibrant investment landscape, cooling inflation globally and higher expectations of rate cuts, analysts say.
Economic growth, especially in the non-oil sector, will strengthen in 2024, driven by strong government spending, which in turn will support markets.
“Saudi Arabia and the UAE appear particularly promising from an economy and markets perspective," said Faisal Hasan, chief investment officer and head of asset management at Al Mal Capital.
"The region will continue to see a strong pipeline of [initial public offerings], which will increase the breadth of the markets."
Stock markets in the GCC ended the year on a largely bullish note, in line with a strong rebound in regional economies.
The GCC equity market index closed 2023 at 714.69 points, registering a gain of 3.7 per cent, after recording mixed performances at the country level, Kamco Invest said in a note.
Saudi Arabia's Tadawul stock exchange, the Arab world's biggest, closed 2023 up 14.2 per cent, while the Dubai Financial Market was the best performing index, ending the year 21.7 per cent higher.
The Abu Dhabi Securities Exchange, the region's second-largest stock market by value, fell 6.2 per cent for the year.
The Qatar Stock Exchange ended 2023 up 1.4 per cent, Bahrain was up 4 per cent, Oman’s index closed 7.1 per cent lower, while Kuwait's bourse was down 6.5 per cent for the year.
Markets in the wider Mena region also posted a mixed performance. Egypt’s EGX 30 index was the best performer in the entire region, gaining more than 70 per cent last year.
This was followed by Morocco with gains of 13 per cent, Lebanon up 10 per cent, Tunisia posting an increase of about 8 per cent, while Jordan's index ended the year around 3 per cent lower.
"The UAE and Saudi Arabia lead the region and have undertaken ambitious diversification efforts to reduce oil dependence and stimulate growth in non-oil sectors," Vijay Valecha, chief investment officer at Century Financial, wrote in a recent opinion piece in The National.
"These strategic initiatives have significantly affected stock market performance, making them more attractive to investors.
"This was evident in the robust increase in IPO activity, with the GCC region standing out globally."
GCC stock markets recorded a flurry of listing activity last year, with some companies notching significant gains on their trading debut driven by overwhelming investor demand.
There were a total of 29 IPOs with total proceeds of $5.8 billion in the first nine months of the year in the Mena region, with all the listing activity taking place in the GCC, according to the latest report from consultancy EY.
The main drivers for the GCC region’s IPO growth include government incentives, foreign investor interest and diversification efforts, analysts say.
The performance in the GCC "highlighted the importance of a strong pipeline of IPOs that are critical for attracting international capital flows and generating resilient market performance", Kamco Invest said.
"Both Saudi Arabia and Dubai exchanges saw IPOs of some of the key companies in the region garnering strong investor demand. The markets, especially Saudi Arabia, were also insulated from the decline in crude oil prices that is still essential for economic growth in the region," it added.
Going forward, markets are likely to record improvements in corporate profits and increased liquidity.
"I see strong investment opportunities in the stocks of banking, retail, technology, telecommunications and tourism sectors in the Gulf stock markets, especially with the surge in IPOs in the Saudi stock market during 2023," Rania Gule, market analyst at xs.com, said.
"The development of the non-oil private sector and improvements in economic indicators, such as an increase in consumer spending and a decrease in unemployment rates, indicate the strength of economic conditions in the GCC countries."
The IMF and World Bank estimate an average Mena growth rate of 3.5 per cent next year, up from 2 per cent in 2023.
This is higher than the global economics growth projections for next year.
The IMF expects global gross domestic product to expand by 2.9 per cent, while the World Bank estimates 2.4 per cent growth and the Organisation of Economic Co-operation and Development forecasts it at 2.7 per cent.
“Non-oil economies across the [GCC] region are set to have another decent performance in 2024, largely thanks to government spending,” Edward Bell, head of market economics, at Emirates NBD, said in a research note.
The UAE’s economy is expected to expand by 3 per cent this year and 4 per cent next year, driven by strong growth in its non-oil sector, S&P said in a September report.
Analysts also expect large-scale and ambitious reform programmes implemented by policymakers to continue to yield benefits in the region and attract investors.
“Non-oil revenues are gradually increasing in the GCC, providing a positive outlook for their economies. Encouraging indicators include continuous GDP growth, improved performance in the non-oil sector, a growing workforce, stable inflation levels and a declining unemployment rate,” said Mr Hasan of Al Mal Capital.
However, analysts cautioned any weakness in developed markets is likely to be felt across the Mena region despite favourable growth dynamics.
Among other main concerns this year is geopolitics outweighing economic risks in the wake of a flare-up in the Israel-Gaza war or a deterioration in the US-China relationship.
“We think the bigger dangers in 2024 will be geopolitical, which have more potential to throw expectations off track,” William Davies, global chief investment officer at asset manager Columbia Threadneedle Investments, said last month.
Top financial tips for graduates
Araminta Robertson, of the Financially Mint blog, shares her financial advice for university leavers:
1. Build digital or technical skills: After graduation, people can find it extremely hard to find jobs. From programming to digital marketing, your early twenties are for building skills. Future employers will want people with tech skills.
2. Side hustle: At 16, I lived in a village and started teaching online, as well as doing work as a virtual assistant and marketer. There are six skills you can use online: translation; teaching; programming; digital marketing; design and writing. If you master two, you’ll always be able to make money.
3. Networking: Knowing how to make connections is extremely useful. Use LinkedIn to find people who have the job you want, connect and ask to meet for coffee. Ask how they did it and if they know anyone who can help you. I secured quite a few clients this way.
4. Pay yourself first: The minute you receive any income, put about 15 per cent aside into a savings account you won’t touch, to go towards your emergency fund or to start investing. I do 20 per cent. It helped me start saving immediately.
A little about CVRL
Founded in 1985 by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, the Central Veterinary Research Laboratory (CVRL) is a government diagnostic centre that provides testing and research facilities to the UAE and neighbouring countries.
One of its main goals is to provide permanent treatment solutions for veterinary related diseases.
The taxidermy centre was established 12 years ago and is headed by Dr Ulrich Wernery.
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
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BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
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Avengers 3: Infinity War: an American superhero film released in 2018 and based on the Marvel Comics story.
Sholay: a 1975 Indian action-adventure film. It follows the adventures of two criminals hired by police to catch a vagabond. The film was panned on release but is now considered a classic.
Lucifer: is a 2019 Malayalam-language action film. It dives into the gritty world of Kerala’s politics and has become one of the highest-grossing Malayalam films of all time.
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Know before you go
- Jebel Akhdar is a two-hour drive from Muscat airport or a six-hour drive from Dubai. It’s impossible to visit by car unless you have a 4x4. Phone ahead to the hotel to arrange a transfer.
- If you’re driving, make sure your insurance covers Oman.
- By air: Budget airlines Air Arabia, Flydubai and SalamAir offer direct routes to Muscat from the UAE.
- Tourists from the Emirates (UAE nationals not included) must apply for an Omani visa online before arrival at evisa.rop.gov.om. The process typically takes several days.
- Flash floods are probable due to the terrain and a lack of drainage. Always check the weather before venturing into any canyons or other remote areas and identify a plan of escape that includes high ground, shelter and parking where your car won’t be overtaken by sudden downpours.
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
Top goalscorers in Europe
34 goals - Robert Lewandowski (68 points)
34 - Ciro Immobile (68)
31 - Cristiano Ronaldo (62)
28 - Timo Werner (56)
25 - Lionel Messi (50)
*29 - Erling Haaland (50)
23 - Romelu Lukaku (46)
23 - Jamie Vardy (46)
*NOTE: Haaland's goals for Salzburg count for 1.5 points per goal. Goals for Dortmund count for two points per goal.
The years Ramadan fell in May
