GCC corporate earnings plunge 60.7% in Q2 | ZAWYA MENA Edition:
Combined profit of most GCC-listed companies plummeted 60.7 per cent year-on-year in the second quarter 2020 to $15.7 billion as compared to $39.9 billion in the same 2019 period, reflecting the impact of the Covid-19 lockdown, a study by Kamco Invest has revealed.
In terms of quarter-on-quarter performance, earnings of 55 per cent of the listed companies that reported their second-quarter performance declined by 38.8 per cent in the second quarter. "The decline in earnings was broad-based as all of the GCC exchanges reported a year-on-year decline," said Mohamed Ali Omar, analyst at Kamco Invest.
The International Monetary Fund said the economy of the six GCC member countries will shrink by 7.6 per cent in 2020 amid low oil prices and the coronavirus outbreak.
A recent report by S&P Global Ratings said the key focus for GCC corporates would be on preservation rather than growth. A sharp drop in oil prices and a negative impact from Covid-19 measures have been weighing on corporates in the region and worldwide. New investments are expected to take a back seat for most sectors, with the key priorities for businesses being cost optimisation, management of liquidity, and cash-flow preservation, the ratings agency said.
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