CAPIATLS: Nomura started coverage of the Gulf Cooperation Council (GCC) equity markets with a constructive short and long-term view. The brokerage said factors such as GCC's strong economic fundamentals, equity liquidity, increasing liberalization of the financial sector and likely graduation of some GCC markets from frontier to emerging status should increase institutional participation."We believe that GCC's status as one of the easiest places to do business in the world - both developed and emerging - is not being properly acknowledged," the brokerage said in a note.Educational standards and skills in GCC markets were ahead of emerging markets even though they trailed developed economies, the brokerage said.Nomura said it is overweight on Qatar, Saudi Arabia and Kuwait.The brokerage sees Saudi Arabia and Qatar as having the best longer-term fundamental outlook.It said Kuwait, which has lagged its peers over the past ten years, is turning the corner and is expected to have sustainably higher growth rates, rising labor participation and employment.Even as GCC's nominal gross domestic product (GDP) continues to be correlated to oil price changes, investors somewhat underestimate the economic diversification achieved by them, Nomura said.Saudi Arabia's non-oil manufacturing grew at a compound annual growth rate of 7.5 percent and represents 9 percent of constant value GDP, while the United Arab Emirates (UAE) has over the past ten years emerged as a financial and real estate centre, it added.However, it is neutrally weighted on Dubai due to a weak outlook offset by low values and did not have a compelling valuation case for Abu Dhabi."We believe that UAE economic performance will continue to be hindered by debt and excess capacity work-outs in Dubai and to a lesser extent in Abu Dhabi, although we do find some selective value in Dubai," the brokerage said.
Source: AlWatanDaily
0 comments:
Post a Comment