Services, hospitality sectors to contribute to the AGCC capital markets in the future

DUBAI — The services and hospitality sectors, not yet fully represented, are expected to be the future's major contributors in the AGCC capital markets.

By M. A. Qudoos

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Published: Thu 30 Mar 2006, 9:54 AM

Last updated: Sat 4 Apr 2015, 3:40 PM

At present, telecom is a major sector followed by sectors like construction and real estate and energy, according to market evolution study by Shuaa Capital from 1980 to 2006.

This was stated by Iyad Duwaji, CEO of Shuaa Capital, while addressing a meeting of the Pakistan Business Council on Monday on Investment Opportunities in the AGCC.

"The AGCC is part of the global market, but it is neither an emerging market nor a developed one. It has been considered as an exporter of capital. Among the global emerging markets, the AGCC ranked No. 1," he said.

He said that Sabic of Saudi Arabia ranked number one among the top 10 companies in the region, while Emaar of Dubai ranked third. The list included Etisalat.

He said that the AGCC governments were expected to have a surplus of $320 billion this year as a result of phenomenal earnings growth.

"The experience after 9/11 has shown that the money is going to stay here," he said.

"The liquidity will continue and corporate earnings will grow. The market will consolidate and at the same time it will be choppy this year as compared to last year when it showed a continued upward trend," he said, adding that the 40 per cent correction in the UAE had brought the market closer to reality. He said that the companies in the AGCC were expected to grow at an average rate of 20 per cent, based on the performance of over 700 regional listed companies across 12 Arab markets that are tracked by Shuaa Capital.

He said that the markets in Saudi Arabia and Jordan were considered to be underweighed, the ones in Qatar, UAE and Morocco neutral, and Kuwait, Oman and Egypt favourites.

"It is difficult to correctly assess the stocks in Dubai because some of them are overvalued and others undervalued," he said.

He said that the stock markets in Pakistan were expected to remain bullish in 2006 with a 20 per cent growth. He said that Shuaa Capital has invested in the Pakistani markets.

Recommending Qatar industries for investment, he said that Qatar has the money of Abu Dhabi and the ambition of Dubai.

He said that a sharp correction in the Saudi market will have repurcussions on the Dubai market and other AGCC markets as well.

He said that there was no shortage of transparency and information in the Dubai market and the regulators have done a good job. However, their job is often misunderstood.

Duwaji's presentation was followed by a Q&A session. Tanvir Khawja, President of the Pakistan Business Council, said that the AGCC had shown tremendous growth in the last six to seven years.

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