GCC’s economic landscape ‘is recovering’

MANAMA: The GCC economic landscape is expected to continue its recovery over the next 12-18 months as a result of fiscal reforms, new economic visions and rising oil prices.

This was the consensus during Institute of Chartered Accountants in England and Wales’ (ICAEW) corporate finance faculty roundtable on how the region’s economic landscape, deal pipeline and investor appetite will look like in 2019. The event was held at the Capital Club in the Dubai International Financial Centre.

Panellists included HSBC MENAT vice-chairman global banking Kapil Chadda, Mena research partners chief executive Anthony Hobeika, KPMG UAE head of mergers and acquisitions Simi Nehra, EY leader for mergers and acquisitions and retail consumer products Anil Menon and Samena Capital co-founder and COO Ramiz Hasan.

Speakers agreed that the GCC market is currently experiencing a shift from an austerity period to an early stage recovery. All the much-needed austerity measures and economic visions set by GCC governments are now leading the recovery of their respective economies.

GCC governments are no longer relying on oil as the primary driving force of the economy, but rather as a means of sustainable long-term economic growth.

Panellists explained that the region’s economic growth is significantly affected by what’s happening in the oil industry and by geopolitical tensions. They lauded the governments’ efforts and asked for the execution of the reforms to be accelerated, especially at a time in which oil prices are increasing.

“GCC governments were very progressive and quick in implementing the needed economic reforms. A tremendous job has been done in a short term. However, the most important period is now, as oil prices are rising. It’s very important for GCC governments not to be complacent but to maintain the path of fiscal reforms and fiscal adjustment that they have started in order to achieve sustainable economic growth,” said ICAEW regional director for the Middle East, Africa and South Asia Michael Armstrong.

In terms of M&A deals, speakers explained that the region’s private equity (PE) industry is fairly new and young but this doesn’t mean PE firms should ignore corporate governance nor transparency.

Both are fundamental elements to attract foreign investors and build trust in the region’s PE industry.

Panellists also agreed that the GCC is a niche market for foreign investors.

Attracting more foreign investors would require higher geopolitical stability and reduction in the cost of doing business.

Speakers explained that raising money in the region is taking a lot of time as local investors are looking outwards to more developed markets.

The top markets for investors are the US, Europe, China and India.

Source: http://www.gdnonline.com/Details/442793