GCC to outpace Latin America in emerging market investments over next five years

The Gulf Cooperation Council (GCC) is set to emerge as the fastest-growing area within emerging market investments over the next five years, with North American investors increasingly drawn to its evolving sectors and improved standards of corporate governance, according to a survey released on Tuesday, reported nukta.com.

The survey, conducted by InspIR Connect and involving institutions that manage $16 trillion in assets, indicated a strong opportunity for growth. Notably, 56% of respondents reported being underweight in GCC stocks compared to their weightings in the MSCI Emerging Markets Index. Portfolio managers predict that the GCC could surpass Latin America in prominent indices such as MSCI and FTSE, fueled by rising investor interest in sectors beyond the traditional focuses of energy and finance, spanning areas like infrastructure, consumer goods, and healthcare.

Jeff Tewlow, Managing Director of InspIR Connect, commented, “The GCC is quickly transforming from a state of ‘potential’ to one of ‘reality.’ This marks the most advantageous time for public and private GCC companies to engage with foreign investors.”

The survey, which gathered insights from 40 North American institutions overseeing $600 billion in emerging market equity, identified improved corporate governance over the last decade as a crucial factor driving investment. It also stressed the significance of enhanced transparency and accessibility in increasing trading liquidity and market valuations for GCC companies.

The results of the survey are set to be presented in detail at the 2024 MEIRA Annual Conference in Abu Dhabi, the largest investor relations conference in the Middle East.