Revealed: Top 100 GCC Companies 2016

It has been a difficult time for companies in the GCC, where indices continued to witness declines in 2016 due to persistent low oil prices, poor corporate earnings and diminished investments into equity markets.

The S&P GCC Composite index tumbled 9.8 per cent in the first half of the year, mainly due to the drag of the TASI, as the region’s largest index.

GCC countries are turning to both domestic and foreign debt markets to finance their rising fiscal deficits, and this trend is likely to persist in the short to medium term.

Since mid-2014, the drop in oil prices has shifted the large aggregate current account surpluses of GCC countries, accumulated in the past decade, to a deficit of $35bn in 2015. This is expected to widen to $89bn or 6.5 per cent of the GDP in 2016, indicating an unfavourable change in the macroeconomic situation in GCC in the last one and a half years.

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Road ahead

Persistent low oil prices have forced GCC governments to fast-track reforms, both on the revenue and expenditure side. In future years, we can expect major changes in the region such as the implementation of taxes, removal or reduction of subsidies and a greater emphasis on diversification plans implemented by various governments.

As per Marmore’s estimates, corporate earnings in the GCC are expected to contract by 3.6 per cent in 2016. Earnings in the banking sector are expected to be flat and commodities sector earnings will decline by nearly 14 per cent.

GCC markets continue to face headwinds as oil prices hover around $50 per barrel, almost 50 per cent lower than price levels in 2013 and 2014. With earnings growth expectations remaining weak, the performance of GCC markets is forecast to remain dull in the coming months.

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Also read: Revealed: Top 10 companies in the UAE in 2016

Revealed: Top 10 companies in Saudi Arabia in 2016

Revealed: Top 10 companies in Qatar in 2016