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GCC Investment Outlook 2017: Cautious Progress and a Reason for Hope

18 January 2017

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Michelle Harnett

+971 4 377 9234

18 January 2017 – A report launched today by global law firm Hogan Lovells sets out key deal trends for the year ahead in the GCC.

'Investment Outlook 2017: Deal trends in the GCC', will be launched at a conference in Dubai International Financial Centre, exploring the commercial, political and regulatory drivers likely to affect transactions in the next 12-18 months.

The report finds that despite continued low oil prices and uncertainty caused by recent geopolitical events such as Brexit and the US presidential election, there is still likely to be plenty of opportunistic growth in the short term. 

Whilst overall growth is expected to be flat despite a modest rise in oil prices, we expect that uncertainty and structural reforms will create pockets of opportunity in the following areas:

  • M&A/private equity – valuations will become more realistic encouraging investors to deploy cash reserves, consolidation in certain sectors (eg. banking) will continue and early stage start-ups will attract international investment.
  • Debt capital markets – the fiscal squeeze will continue to drive growth in the debt capital markets.
  • Structural reforms – reforms will drive partial privatisation sales; and the expansion of public private partnerships in sectors such as education, healthcare and transportation will also drive activity.

Imtiaz Shah, head of Hogan Lovells' Middle East Corporate Practice said:

"On the surface, 2017 looks like a difficult year for corporate deals in the region, but further investigation shows that there is much to be optimistic about. Investors are becoming more comfortable with the new oil price environment and governments are taking action to rebalance their finances, creating new pockets of opportunity for the private sector and shifting the potential for future dealflow.

The next phase of growth will not come from government spending as in the past. We will see moves towards the long-term development of capital markets, private equity, PPP and foreign direct investment, and that is the biggest reason for hope."

The full report is available to download here

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