GCC’s tech-savvy population and efforts taken towards economic diversification will pave the road for growth opportunities.
Despite ongoing global economic turbulence, the Gulf Cooperation Council (GCC) region has shown resilience. Its capital market has survived hardships like oil price changes and shocks from US tariffs.
Its capital markets have overcome challenges, from US tariff shocks to fluctuations in oil prices.
During the 19th Annual EFG Hermes One-on-One Investor Conference in Dubai, CEO Karim Awad dismissed the panic around US tariffs, claiming that 10% tariffs would not cause that much effect compared to the tariffs Trump imposed on China.
He admits optimism exists despite uncertainty from trade wars, volatile oil prices, and geological conflicts. However, he stressed that GCC’s tech-savvy population and efforts taken towards economic diversification will pave the road for growth opportunities.
He claimed that there is increased traffic from investors, especially tech companies since they value increasing economic diversification.
He corrected a misconception about GCC offering just oil and gas, but it has much more to offer.
Ahmed Shams, head of research at EFG Hermes, a division of EFG Holding, shared optimistic views with Awad, especially about Saudi Arabia.
Shams explained two elements that drive the Saudi market. The first is plans for economic diversification and transformation, followed by the depth of the financial market and capital market role in financing these transformative projects.
He stressed that uncertainty can cause delays in Vision 2030 projects, but there is no going back in economic diversification and reform initiatives.
He was optimistic about the Saudi real estate sector since the demand is high, even with an imbalance in supply and demand. He shared similar views with the banking sector and utilities companies.
Awad proudly talked about Egypt’s progress in fintech, especially Valu, which offers buy now, pay later services. It started from the ground and transformed to become one of the best fintech companies in Egypt.
Mohamed Ebeid, Co-CEO of EFG Hermes, noted the firm’s growth in equity capital markets (ECM), bringing in 24 deals in terms of ECM, be it initial public offer (IPOs) or financial market operations (FMOs).
However, due to oversubscription, Saudi Arabia finds it challenging to allocate shares to foreign investors. One reason for oversubscription was the banks.
Rami Aboulnaga, Egypt’s central bank’s deputy governor, described their proactive approach to handling global shocks, emphasizing its economic resiliency.
He emphasized how they shifted from a $29 billion net foreign asset deficit to a $10 billion surplus since January 2024.
Aboulnaga highlighted Egypt’s diversified strategy, with only 7% of total trade volume linked to the US, offers protection.
The deputy governor emphasized the significance of sustainable policy, as the inflation reduced to 12.8% in February, validating Egypt’s orthodox policy mix. He noted that forthcoming initiatives by the International Monetary Fund (IMF) would further reinforce its reforms.
The CEO of Dubai Economic Development Corp., Hadi Badri, said the real estate investment market continues to be very strong as it increased by 27%, the same level as the Dubai Financial Market index.
He noted that demand is more than supply. Dubai’s primary limitation is that it attracts more businesses than office spaces.
The market gained 437,000 new investors last year, with approximately 85% coming from outside the United Arab Emirates (UAE).
Despite the regional optimism, analysts recognized global challenges, including US tariffs and the potential for stagflation.
They argued that the MENA region is still relatively shielded from these problems.
Shams claimed that the effects were related to global trade and inflation post-COVID. He clarified that this was partly due to the injection of money supply, while another was due to supply chain disruptions and the reconfiguration of the global grid.
EFG Hermes leaders emphasized a unifying message: even though volatility might still exist, Saudi Arabia’s positioning with its megaprojects, Egyptian fintech, or Dubai’s real estate market — offers protection against global turmoil.
Ebeid urged investors to tap into the market while still optimistic.