GCC emerges as hotspot for global investment growth

The Gulf Cooperation Council (GCC) is poised to become the fastest-growing segment in emerging market investments over the next five years, with strong interest from major North American investors, according to a survey released on Tuesday.

Conducted by InspIR Connect, the survey included institutions managing $16 trillion in assets. It revealed significant potential for increased investment, as 56% of respondents reported being underweight in GCC stocks compared to their MSCI Emerging Markets Index weightings.

Portfolio managers anticipate that the GCC will eventually surpass Latin America in major indices like MSCI and FTSE, driven by growing investor interest in sectors beyond energy and finance, such as infrastructure, consumer markets, and healthcare.

“The GCC is rapidly transitioning from ‘potential’ to ‘reality,’” said Jeff Tewlow, Managing Director of InspIR Connect. “This is the most favorable period we’ve seen for public and private GCC companies to connect with foreign investors.”

The survey, which polled 40 North American institutions managing $600 billion in emerging market equity, highlighted enhanced corporate governance over the past decade as a key driver of investment. It also emphasized the importance of increased transparency and accessibility to boost trading liquidity and market valuations of GCC companies.

The survey findings were shared ahead of their detailed presentation at the 2024 MEIRA Annual Conference in Abu Dhabi, the largest investor relations event in the Middle East.