Arqaam Capital is pleased to invite you to its 12th Annual MENA Investor Conference.

We are hosting the conference in Abu Dhabi, at the heart of the key financial hub attracting global attention for its growth potential.

The event will bring together 80+ MENA corporates with regional and international investors, offering exclusive 1x1 and small group meetings for meaningful networking and business discussions, alongside several expert panels and presentations.

The outlook for oil prices has strengthened due to restrictive OPEC+ supply policies and new sanctions against Russia's oil exports. As a result, fiscal policies in the GCC should remain largely unaffected by fluctuations in oil prices. We continue to anticipate the highest economic growth in the UAE (approximately 5%), followed by Saudi Arabia (around 4%), with the rest of the GCC projected to grow between 2% and 3%. This macroeconomic environment presents significant growth opportunities for publicly listed companies, particularly those benefiting from structural changes and diversification.

The GCC equity markets are not particularly sensitive to a shallower interest rate cycle. They are supported by a high proportion of banking stocks in their indexes and stable fiscal and external positions. The political risk premium also has the potential to decrease, allowing for further upside following the peace deal between Israel and Hamas and the collapse of the Syrian regime. Institutional changes remain highly supportive, although introducing corporate tax could dampen EPS growth. The market will focus on new IPOs, ABBs, and index inclusions. Sovereign Wealth Funds increasingly influence domestic industrial and economic policies while actively managing their portfolios and strategies. Index inclusions remain a focal point despite the region's index weight slightly declining last year, with opportunistic targeting ongoing. Key index opportunities remain concentrated in Saudi Arabia and the UAE.

The UAE presents a strong economic backdrop, primarily driven by private sector growth, while investments in oil and gas continue. Sentiment towards Saudi Arabia has improved as the country remains committed to its Vision 2030 goals and prepares to host the FIFA World Cup in 2034. Limited adjustments are needed to sustain budget deficits and debt levels. We see improved policymaking in Kuwait, with a focus on better-targeted spending. We are becoming more optimistic about Qatar as liquidity in the banking system improves and LNG expansion continues. Given the elevated equity risk premiums, we are also confident about Oman in the medium term, considering the significant improvement in Oman's credit profile. However, upgrading to Emerging Market status will take time, and a heavy IPO pipeline may weigh on this process. We expect a shallower interest rate cycle in Egypt, with rates likely to decrease by at least 6% in 2025, alongside a slight decline in the Egyptian pound while real rates increase after Q1 2025. Nonetheless, we anticipate a solid year for Egyptian equities.

We look forward to seeing you all at the conference in Abu Dhabi.

Jaap Meijer, MBA, CFA

Head of Research