Rohit Walia

GCC Market Outlook Report
3rd July, 2013

Alpen Asset Advisors Limited, the newly created Independent Financial Advisory and Asset Management Company and associate of the investment bank, Alpen Capital published its "GCC Market Outlook for 2013".

According to the report, GCC equity markets are likely to remain on an upward trajectory in H2 2013, building momentum on the strong rally witnessed during H1 2013. Increased interest of foreign investors in the UAE and Qatari markets following the MSCI upgrade is also expected to contribute to the up-move. Amongst others, continued momentum on reforms, healthy economic growth, investment in non-oil sectors, stabilization of oil prices, recovery in real estate sector, better corporate earnings and compelling valuations are likely to be the key positive triggers for the GCC equity markets. According to Bloomberg consensus estimates, earnings of equities constituting the MSCI GCC index are expected grow a healthy 10.3% YoY in CY2013.

The broad macro environment for 2013 also encourages this growth as the end of fiscal cliff in the US and quantitative easing in emerging markets as well Europe would provide much needed impetus. According to the IMF, real GDP growth in GCC is expected to slow down to 3.2% from 5.7% in 2012. This is primarily due to the scaling back of the growth rate in hydrocarbon production. The economic growth, however, remains contingent on several factors such as stable oil prices and continuous improvement in socio-political situation in the region. The overall GCC market, however, remains exposed to spells of volatility that could arise from lack of institutional participation, high dependence on oil, and any impediment to global economic revival.

For more details please click here to access the complete version of the GCC Market Outlook 2013 Report.