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Tuesday, 16 May 2017

Capital markets growth promises big gains for GCC countries

Capital markets growth promises big gains for GCC countries:

"The plunge in oil prices from mid-2014 has been a serious setback for all oil producing countries but for the members of the Gulf Cooperation Council the effects have been dramatic. From a comfortable position of current account and budget surpluses for more than a decade, GCC governments suddenly found themselves in 2015 with large deficits and sizeable financing needs. While GCC governments financed deficits by drawing on large accumulated reserves and ample bank deposits, there was also renewed borrowing, including from the capital markets. The GCC countries’ current and prospective financing needs may not be large relative to the size of their economies or their financial assets, but their reorientation towards market borrowing provides an opportunity to examine the potential of the local debt capital markets. In the GCC, these have lagged behind emerging-market peers, and remain a relatively under-developed segment of what are otherwise modern and fully globalised economies."



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