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Thursday, December 01, 2022 | Daily Newspaper published by GPPC Doha, Qatar.

Business

Gulf Times

GCC 2023 outlook 'constructive', may remain 'outperformer' in global context: Emirates NBD

The GCC looks likely to remain an “outperformer in the global context” next year, Emirates NBD said although it expects the region’s average GDP growth to slow to 3.5% in 2023.The GCC countries have enjoyed a strong performance in 2022 on several fronts. The outlook for the GCC in 2023 also remains constructive.Emirates NBD expects economic growth in the region to come in at around 7% on a nominal GDP-weighted basis, the fastest in over a decade. This has largely been driven by double-digit growth in oil production across the region as the pandemic-related production cuts were fully unwound.“However the non-oil sectors have performed well too and we expect average non-oil GDP to reach 4.4% this year, similar to the growth rate achieved across the GCC in 2021, even as global growth has slowed this year,” noted Khatija Haque, head of research and chief economist at Emirates NBD.Domestic demand has continued to rebound from the pandemic and the recovery in global travel and tourism has also supported the non-oil sectors, particularly in the UAE.Expo 2020 contributed to strong growth in the UAE’s tourism and hospitality sectors in Q1, 2022, and the reopening of long-haul markets has seen visitor numbers rebound sharply from last year, although they remain around 15% below 2019 levels through September.The FIFA World Cup is expected to support demand in Qatar in Q4, 2022 even as the global economy has started to slow.The GCC budget performance has also improved significantly this year on the back of higher oil production and prices, as well as the broader economic recovery in the region, Emirates NBD noted.\"We estimate the average GCC budget surplus will reach almost 8% of GDP this year following seven years of deficits. While government spending has increased slightly this year, governments have so far been relatively prudent with their oil windfall, using budget surpluses to build up reserves, pay down debt and invest for the future, \" it said.The GCC countries have also provided financial support to other Mena countries that have faced current account shocks this year on the back of rising energy and food prices.“The outlook for the GCC in 2023 remains constructive,” it said.\"GDP growth will slow sharply as the 16% increase in oil and gas GDP that we saw this year is unlikely to be repeated, and further production cuts from Opec+ pose a downside risk to growth in this sector in 2023. Non-oil GDP is also expected to slow somewhat next year but is likely to remain relatively robust as governments continue to invest in strategic sectors and projects to diversify their economies.“Our baseline forecast is for oil prices to remain above $100/b next year, which will allow governments to maintain spending even as private investment slows,” Haque noted.There are headwinds to growth in the coming months, however. The tightening in monetary policy that we’ve seen in 2022 will continue to weigh on global economic growth in 2023 as central banks focus on bringing inflation down.Even with oil prices expected to remain relatively high, the region is not immune from slowing global growth, particularly given its position as a global trade and logistics hub.“Higher borrowing costs may deter private sector investment in the region and a strong dollar will also erode competitiveness, making the region a more expensive destination for both foreign investors and tourists,” Emirates NBD said.

Continuing the strong bullish phase for the second straight session, the 20-stock Qatar Index shot up 1.07% to 11,925.98 points yesterday, recovering from an intraday low of 11,756 points

Global sentiments lift QSE 126 points; Islamic index outperforms

Reflecting the mood in the global markets and higher oil prices, ahead of the US Federal Reserve chief’s speech; the Qatar Stock Exchange Wednesday witnessed 126 points gain in the key index and QR8bn in capitalisation.Continuing the strong bullish phase for the second straight session, the 20-stock Qatar Index shot up 1.07% to 11,925.98 points, recovering from an intraday low of 11,756 points.The telecom, banking and real estate counters witnessed higher than average demand in the main market, whose year-to-date gains improved to 2.58%.The foreign institutions were increasingly net buyers in the main bourse, whose capitalisation saw QR8.11bn or 1.23% jump to QR669.5bn, mainly on mid and large cap segments.About 57% of the traded constituents extended gains in the main bourse, which saw a total of 0.13mn exchange traded funds (sponsored by Masraf Al Rayan and Doha Bank) valued at QR0.35mn changed hands across 11 deals.The Islamic index was seen outperforming other indices in the main market, which saw no trading of sovereign bonds.Trade turnover and volumes were on the increase in the main market, which saw no trading of treasury bills.The Total Return Index gained 1.07%, the All Share Index by 1.07% and the Al Rayan Islamic Index (Price) by 1.13%.The telecom sector index zoomed 2.37%, banks and financial services (1.58%), realty (1.45%), industrials (0.69%) and transport (0.21%); while insurance declined 1.96% and consumer goods and services (0.53%).Major gainers in the main market included Qatari German Medical Devices, Mannai Corporation, Qatar Islamic Bank, Qatari Investors Group, Barwa, QNB, Baladna, Widam Food, Industries Qatar, Mesaieed Petrochemical Holding, Ooredoo, Vodafone Qatar and Nakilat.Nevertheless, Qatar Insurance, Medicare Group, Qatar Industrial Manufacturing, Woqod, Gulf Warehousing, Qatar Electricity and Water and Milaha were among the losers in the main market. In the venture market, both Al Faleh Educational Holding and Mekdam Holding saw their shares depreciate in value.The foreign institutions’ net buying increased substantially to QR160.61mn compared to QR41.56mn on November 29.The Arab institutions turned net buyers to the tune of QR0.22mn against net profit takers of QR0.01mn on Tuesday.The Gulf individuals’ net selling declined perceptibly to QR0.44mn compared to QR2.02mn the previous day.The foreign individuals’ net selling shrank noticeably to QR0.04mn against QR2.33mn on November 29.However, the domestic funds’ net selling shot up significantly to QR109.75mn compared to QR34.02mn on Tuesday.The local retail investors’ net selling zoomed considerably to QR36.64mn against QR2.41mn the previous day.The Gulf institutions’ net profit booking expanded drastically to QR8.1mn compared to QR1.26mn on November 29.The Arab retail investors were net sellers to the tune of QR5.88mn against net buyers of QR0.48mn on Tuesday.Total trade volume in the main market more than doubled to 238.16mn shares and value more than tripled to QR1.49bn on 20% surge in deals to 20,130.Trade volumes were seen doubling to 0.08mn equities and value soared 74% to QR0.59mn on 69% jump in transactions to 54.

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