Virus Fallout Lays Bare Vulnerability of Persian Gulf Assets - Bloomberg:
It’s been a one-two punch for Gulf markets this year. First came the flare-up when the U.S. assassinated one of Iran’s top generals. Now, the region’s stocks and bonds are suffering the economic fallout from the coronavirus.
Valuations in the six-nation Gulf Cooperation Council were stretched heading into 2020, making them vulnerable to a decline in risk appetite, according to Tellimer, a brokerage focusing on frontier markets.
The virus-triggered plunge in oil threatens to crimp revenues for the region, while trade and tourism could also be hit. In the United Arab Emirates, business conditions worsened for the first time in over a decade in January, according to IHS Markit.
“Across the GCC, growth remains quite anemic,” said Hasnain Malik, Tellimer’s Dubai-based head of equity strategy. “I don’t see any of the GCC markets as compelling for a global investor.”
It’s been a one-two punch for Gulf markets this year. First came the flare-up when the U.S. assassinated one of Iran’s top generals. Now, the region’s stocks and bonds are suffering the economic fallout from the coronavirus.
Valuations in the six-nation Gulf Cooperation Council were stretched heading into 2020, making them vulnerable to a decline in risk appetite, according to Tellimer, a brokerage focusing on frontier markets.
The virus-triggered plunge in oil threatens to crimp revenues for the region, while trade and tourism could also be hit. In the United Arab Emirates, business conditions worsened for the first time in over a decade in January, according to IHS Markit.
“Across the GCC, growth remains quite anemic,” said Hasnain Malik, Tellimer’s Dubai-based head of equity strategy. “I don’t see any of the GCC markets as compelling for a global investor.”
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