Middle East Industry Verticals: Where to Invest
International research disclosed that the top industry verticals in the Middle East are the following:
Ì Oil, Gas and Petrochemicals
Ì Energy
Ì Banking and Finance
Ì Information Technology, Communications and Electronics
Ì Government and Public Sector Utilities
Relatively, these are all the same for the United Arab Emirates, Kingdom of Saudi Arabia, Qatar, Kuwait and Bahrain. In other words, foreign investors should focus first and foremost on these verticals.
The oil, gas and petrochemicals sector has emerged as a primary commodity and is expected to grow more beyond 2015. This is the trend notwithstanding the sudden decrease of crude oil prices in the world market in 2014 and subsequent volatility during the last few months. Analysts in the financial services industry also project a significant increase in demand within the next few years.
Why go for oil and energy? According to the International Renewable Energy based in Abu Dhabi, expansion of alternative energy resources will receive substantial funding from the so-called public private partnerships. The PPP model was organized in UAE's embryonic clean energy industry. The key here is US$256 billion worth of investments were channeled to this sector in 2014 alone and it has emerged as a trillion-dollar industry right now.
Meanwhile, Saudi Arabia’s leading industry is energy and is all set for unparalleled growth, diversification and productivity. High oil revenues have generated a sudden increase in oil as well as non-oil development initiatives. Compared to prior investment cycles, this present series of investment projects has seen massive involvement of the private sector. In fact, a total of USD $79 billion worth of private-sector energy is still being developed. Economic analysts forecast that business activities in the world’s primary energy economy will surge ahead as huge capital spending is being undertaken in coming up with new capabilities along with opening out of current facilities. The Arab Oil and Gas register has projected new energy investments in the Middle East. The major role player will be Saudi Arabia. These are the following:
Ì Petrochemical - $90 billion
Ì Power Generation-$90 billion
Ì Natural Gas - $50 billion
Financial market institutions in Kuwait are ideal prospects for overseas investors. For one, the Kuwait Stock Exchange already has a market capitalization of US$ 104 billion although this dropped compared to the US$130.6 billion five years ago. The Exchange has 215 listed corporations with services/investments being the highest and real estate following closely. The Kuwait Capital Market Authority makes sure that regulations are stringent and transparent to uphold the financial system of the country.
For Qatar, the top industry is oil and natural gas. While production is close to its peak, prospective opportunities still abound in natural gas exploration. Reserves have been discovered in the northeastern coast of Qatar. Industrial development concentrates on main oil refineries and seaports. The nation’s 2030 National Vision is centered on the capitalization of massive gas reserves as well as producing a diverse economic system by means of supporting competitive industries and services.
In Bahrain, the prominent vertical industries are banking and investment; mineral resources; and, telecommunications. All these give investors an idea of where to put their money in the short, medium and long-term.