Alkhabeer Capital: 2012 Global Economic Outlook
26 Feb, 2012, 05:00 GMT
JEDDAH, Saudi Arabia, February 26, 2012 /PRNewswire/ --
Saudi Arabia Well Positioned For Growth
Bargain Hunting Opportunities Within Global Equities
Alkhabeer Capital is a boutique Saudi Investment House which supplies tailored Sharia'a compliant investment solutions to institutions, family groups and high net worth individuals
It is CMA licensed with an international advisory team, which provides best in class Asset Management, Corporate Finance as well as Wealth Management Solutions.
Alkhabeer Capital, a leading Saudi investment company, has today released its latest global economic outlook for 2012.
According to Alkhabeer Capital, the combined GDP of the GCC region is expected to register a growth in excess of 4% where Qatar will top the list with (7%) followed by Saudi Arabia (4.6%), Kuwait (3%), Oman (2.7%), UAE (2.4%) and Bahrain (1.2%).
At the same time, regional inflation is also expected to ease as commodities and global growth flattens during 2012.
Alkhabeer Capital believes that Saudi Arabia will emerge as the leading Frontier economy with a lower debt profile (total debt 58% of GDP), higher investment (23% of GDP) and rising infrastructure spending.
Saudi Arabia's growth is mainly derived from an expected jump in budgetary development spending (up 16%) as an outcome of USD 133 billion economic stimulus package announced by the government. Al-Khabeer's forecast for Arabian crude for 2012 has taken into account a 5% decline in prices along with a 2% appreciation for USD.
While an investor in a Frontier economy is concerned primarily with currency movement and inflation, Saudi Arabia is unique because its peg with the USD means stable currency while monetary measures - money supply - is used to ease imported inflation. Based upon Alkhabeer Capital's oil price outlook and past Saudi Central Bank measures, it can be concluded that 2012 inflation is unlikely to exceed 4%.
Saudi equities are also expected to project good returns with modest risk. Trading at a PE of 11.5 and yielding 3% dividend, Saudi equities are the best pick amongst Frontier world with a price appreciation potential of 17%.
Global growth: Unlikely to exceed 2.5%
Europe is expected to shrink by 0.6%, USA unlikely to post higher than 1.5% growth and the Emerging world likely to post 5.1% growth; the global economic growth is expected to close around 2.5% for the year 2012, wherein China may contribute more than 40% of total global economic growth.
2012: Year of bargain hunting in equities
After reviewing all the asset classes and taking into account economic growth estimates, Alkhabeer Capital concludes that bargain hunting in equities is likely to generate the most optimum return depending on the investors' appetite for risk.
UK equities: Best amongst Developed world
Trading at a PE of 10.5 and yielding 3% dividend, UK equities are likely to be the best pick amongst the Developed world, with a price appreciation potential of up to 30%.
Russian equities: Highest growth potential
Trading at a PE of 9.5 and yielding 2% dividend, Russian equities are expected to be the best pick amongst Emerging world, with a price appreciation potential of 32%.
Saudi equities: Good returns with modest risk
Trading at a PE of 11.5 and yielding 3% dividend, Saudi equities are the best pick amongst Frontier world, with a price appreciation potential of 17%.
Based on our global growth expectations, we believe that sectors which are domestically focused such as Cement, Food and Retail are likely to be outperformers this year.
Wider GCC Equities
Alkhabeer Capital recommends high dividend Kuwaiti stocks, selected equities in Omani hospitality & logistics sector and Qatari equities.
Commodities: Flat to negative performance
Slower growth in consumption, higher growth in supply and lesser depreciation in the value of currencies suggest medium to long term outlook for commodities at flat to negative.
Oil Prices: Expected to decline by 5%
Based upon additional supplies, a modest appreciation in the US dollar and a slowdown in global consumption growth, Alkhabeer Capital expects oil prices to shrink by 5% in 2012.
Ammar Shata, Executive Director & CEO of Alkhabeer Capital commented:
"I am delighted to announce our 2012 Economic Outlook written by our in-house research team, which identifies a range of investment opportunities both regionally and globally where investors can still secure a return on their investments.
We specialize in providing our institutional and high net worth client base with the most in-depth investment advice possible, which combines our global investment perspectives with our regional in-depth expertise of Sharia'a compliant investments.
I am therefore delighted to release our 2012 Economic Outlook report, which outlines our investment thoughts for 2012 and look forward to providing further investment insights in the year ahead."
About Alkhabeer Capital
Alkhabeer Capital is a boutique investment & asset management firm that provides world-class financial products and services that help institutions, family groups and qualified investors access and/or allocate capital in ways that deliver real and enduring economic value.
It is licensed by Saudi Arabia's Capital Market Authority (CMA). The Asset Management area provides investment opportunities through a large and growing portfolio of public and private funds in the areas of real estate, private equity and capital market while the advisory area helps clients improve their capital structures with a wide range of innovative investment and corporate finance services and solutions.
Alkhabeer Capital has its offices in Jeddah, Riyadh & Bahrain.
For media enquiries, please contact:
Mohammed Hajjar
Executive Partner
Chief Business Development Officer
Alkhabeer Capital
Tel: +966-5-6111-7222
Shane Dolan
Racha Mhanna
FTI Consulting
Tel:+971-4-332-8832
SOURCE Alkhabeer Capital