A report on the Gulf Cooperation Council (GCC) markets before and after Covid-19 – Q4 2020 sheds light on the impact of the Corona pandemic on the Gulf markets. It reveals its consequences on economic growth as well as economic shock, its impact on financial markets and companies.
The report details the current situation of the oil markets, tax reform, privatization and financial markets. It discloses opportunities in the field of health; the pharmaceutical sector; agriculture; food security; oil derivatives; education, digital financial services and logistical services.
According to the CEO of Into Capital, Haytham Al-Masry, the Corona pandemic brought about structural changes in the way business is performed on the one hand, and many social impacts on the other hand.
In fact, several sectors were negatively affected by these changes. However, a number of countries announced financial advantages and facilities to help the sectors to overcome this stage. The report aims to help the reader by assessing the consequences of the pandemic on the economy in the Gulf region and the work environment.
The report issued by the financial company licensed by the Dubai Financial Services Authority based in DIFC Dubai added: “We launched this report out of our belief in the need to guide readers, especially investors, about the effects of the Corona pandemic, and focus on new opportunities, especially in the field of technology, the health sector and the education sector.”
The report contributes to serving institutions, family companies, and investors in identifying new and promising opportunities and helping them define the next steps.
Furthermore, the report also shows new opportunities in the Gulf region as technology services are enhanced to better serve customers, and as decision-makers formulate regulatory policies and reforms that stimulate competitiveness.
For example, the Gulf states have implemented more than 35 new reforms, including amending foreign ownership laws, bankruptcy laws and other reforms that would enhance competitiveness. Gulf states also made progress in the Ease of Doing Business Index.
The “Into Capital” report highlights that global sukuk issuances increased by 6% in 2019, which is likely to continue to be the best way to finance governments and companies. This is especially since the focus of governments in the region revolves around reforms and diversification, which enhances P2P partnerships and creates many opportunities for investors in the region.
“Preventive medicine, the need to increase hospital beds, and compulsory insurance will increase the demand for investment in healthcare and telemedicine. The size of the pharmaceutical sector is expected to double in 2028 due to population aging and the increase in chronic diseases related to lifestyle and other reasons,” Al-Masry said.
Gulf markets have also been forced to work on food security in light of the Corona pandemic, as they exert great efforts to support local producers and stimulate innovation in agriculture, especially with limited natural resources.
The report displayed the importance of privatization in helping Gulf governments do away with a large portion of expenditures through the use of public-private partnerships.
The privatization of projects may lead to the collection of ample revenues through the investment of public assets and the transfer of these funds and investment in sectors with added value that contribute to the growth and strengthening of the economy. This provides new opportunities for local and foreign investments in the Gulf market.
As for the banking sector, the report expects that banks in the region will witness consolidation as a realistic solution to the credit and interest rate risks that the sector faces today. Herein lies the importance of digital banking services, which will enhance innovation and productivity in several sectors in the Gulf region.
This is in addition to the importance of logistics services and managing the supplier network with the increase in demand for E-commerce. Finally, the education sector offers many promising opportunities in terms of distance education and related digital services.
The report concludes that despite the structural and radical changes that have occurred in the business sector and the work environment due to the Corona pandemic, financial markets have been able to recover relatively quickly, and it appears that we are heading towards stability in oil prices.
The report sees an increase in underwriting in the region. The introduction of derivatives in the Kingdom of Saudi Arabia also adds a new dimension to the commercial landscape.