Foreign investors rekindle enthusiasm in Gulf markets (By IFN)

Foreign investors rekindle enthusiasm in Gulf markets

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GLOBAL: Recovery in the GCC economy, coupled with relative political stability following the end of the three-year Arab Spring affecting major economies such as Egypt, is said to have spurred foreign investor interest in the Middle East markets. According to analysts, institutional investors such as pension funds and insurance companies have added stability to the Gulf equity markets by investing in the UAE market since the beginning of this year, prompting stock market movement and growing the demand for equities. The UAE in particular, has exhibited growth across major sectors including housing, tourism and development; increasing investor confidence in a new phase of economic growth in the region, following the credit crisis. Speaking to a Gulf-based daily, Faid Al Said, head of equities for ING Investment Management in Dubai, said: “After the Arab Spring, we saw a lot of outflows from international investors leaving the region.” However, equity prices have shown significant improvement in the first quarter of this year, with the Abu Dhabi Securities Exchange General Index up by 36.4%; the Dubai Financial Market General Index up by 41.9% and the Qatar Exchange Index up by 5.9%. Government-backed entities looking to list and go public via IPOs through the sale of state-owned assets across Qatar and the UAE have also piqued the interest of foreign investors, with four companies owned by state-owned Qatar Petroleum expected to go public in the near-term. Qatar-based Barwa Bank has also come to the market with plans to launch an IPO worth QAR2.05 billion (US$562.63 million). In terms of construction, the Executive Council of the Abu Dhabi government yesterday approved plans to spend AED1.5 billion (US$408.27 million) in infrastructure projects across the emirate, boosting the UAE’s position as the largest construction market in the Middle East for the first time since 2008, with a total of US$16.2 billion worth of contracts awarded in 2012.