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- Higher returns are required for listed equities in Qatar while higher rates are required for 10-year government bonds in Bahrain and Oman.
SICO BSC (c), a leading regional asset manager, broker, market maker and investment bank (licensed as a wholesale bank by the CBB), has released the results of its inaugural investor return assessment survey, a first of its kind look into the economic and return expectations of investors across the GCC.
The online survey was conducted during the third quarter of 2021 asking two specific questions to investors about overall economic outlook and minimum unleveraged return requirements for different asset classes including listed equities, government bonds, real estate, private equity and cash deposits for all 6 countries in the GCC.
The survey respondents, primarily CEOs, CFOs, investment managers, fund managers, institutional investors and high-net-worth-individuals (HNWIs), represented a diverse mix of GCC enterprises and multinational companies, including both listed and private companies.
“After nearly two years of living with COVID-19 and the steep economic challenges and volatility that came along with it, we set out to provide some clarity and insight into the return expectations of investors in the GCC,” said Najla Al Shirawi, SICO’s Chief Executive Officer.
“We believe that a proper understanding of investor return requirements will allow investment banks and asset managers like ourselves to deliver the right products to investors at the right time with the right return profile across asset classes. Tracking investor returns provides an important pulse on the various economies of the region,” she added.
Based on SICO’s analysis of the majority of responses, required returns for listed equities in Saudi Arabia, UAE, Bahrain and Oman lies within the 6-8% range. Whereas investors required higher returns on their equity investments in Qatar 9-11% and Kuwait 6-11%.
As for 10-year government bonds, required returns for Bahrain and Oman stood between 6-8%, while lower returns were expected for the rest of the GCC countries 3-5%.
The survey has also indicated that investors are generally bullish on the economic outlook for the region in next 12 months particularly when it comes to Saudi Arabia, Bahrain, UAE, and Qatar. 77% of respondents had a positive economic forecast for Saudi Arabia, a market that SICO has just expanded into with a full suite of financial services, and 53% expected the economy in SICO’s home market of Bahrain to perform positively in the coming year.
While this is the first survey of its kind for SICO, the objective is to repeat the survey annually to serve as a point of reference providing empirical data and analysis for regional investor sentiment and expectations.
For access to the full report please visit: www.sicobank.com
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About SICO
SICO is a leading regional asset manager, broker, market maker and investment bank, with USD 3.9 bn in assets under management (AUM). Today SICO operates under a wholesale banking licence from the Central Bank of Bahrain and also oversees three wholly owned subsidiaries: an Abu Dhabi-based brokerage firm, SICO Financial Brokerage, a specialised regional custody house, SICO Fund Services Company (SFS), and a Saudi-based investment banking company, SICO Capital. Headquartered in the Kingdom of Bahrain with a growing regional and international presence, SICO has a well-established track record as a trusted regional bank offering a comprehensive suite of financial solutions, including asset management, brokerage, investment banking, and market making, backed by a robust and experienced research team that provides regional insight and analysis of more than 90 percent of the region’s major equities. Since inception in 1995, SICO has consistently outperformed the market and developed a solid base of institutional clients. Going forward, the bank’s continued growth will be guided by its commitments to strong corporate governance and developing trusting relationships with its clients. The bank will also continue to invest in its information technology capabilities and the human capital of its 100 exceptional employees.
© Press Release 2021
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