Alkhabeer Capital: Market Insights (Jan-13)

The GCC economies continue to witness strong growth, with most nations aside from Saudi Arabia continuing to operate at close to capacity owing to the tight supply in oil markets. The IMF has estimated the GDP growth for MENA in 2012 at 5.3%, with oil exporters anticipated to perform significantly better than oil importers. An increase in government expenditure on infrastructure and social sectors in the GCC region is expected to drive significant economic outperformance, lending visibility for robust revenue and earnings growth for businesses. Short of a geopolitical shock in the MENA region, we envisage the GCC markets to be an attractive proposition in 2013 given the high dividend payouts and relatively inexpensive valuations, especially in the global backdrop of low yields.

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