GCC equities gather steam
Riding on MSCI upgrade, the UAE and Qatar stock markets are seeing increased activity. Indexes of Dubai Financial Market, Abu Dhabi Securities Exchange and Qatar Exchange are in positive territory as against the end of 2012. Saudi Arabia’s Tadawul is in for the bull-run once the regulators finalize framework to facilitate foreign investment in stocks listed on the bourse.
Global research and consulting firm Deloitte in its Equity Capital Markets confidence survey says the GCC economies are showing positive signs of recovery across a multitude of sectors, including retail, tourism, real estate and infrastructure.
The regional equity markets, which had generally been depressed following the impact of the global financial crisis, are now showing signs of recovery with higher volumes being traded and more interest from foreign investors. Tadawul, DFM and the Qatar Exchange (QE) are expected to be the most active GCC exchanges over the next 12 months.
“Following the lessons learnt from the Arab Spring, regional governments are increasingly looking towards the equity capital markets as a mechanism for the distribution of wealth, says Deloitte, adding that policies being pursued by some regional governments include the requirement for businesses in specific industries (such as telecoms and financial institutions) or state-owned enterprises (SOE) to list on local exchanges, providing investment opportunity for retail investors.
“Bond markets have been enjoying a solid run for the past few years attracting investors. With debt expected to become more expensive, issuers are more seriously looking towards equity markets as a source of raising finance in this cash rich region,” it said.
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