GCC earnings growth 'flat in 2009'

ZERO GROWTH: Markaz says it anticipates flat GCC earnings growth in 2009. (Getty Images)

Average company earnings growth across the GCC is expected to be flat in 2009, with “severe stress” on banks, real estate companies and investment services, the Kuwait Financial Centre (Markaz) said on Wednesday.

The countries likely to witness significant negative earnings growth rates are Bahrain, Kuwait and the UAE, with predicted rates of minus 11 percent, minus six percent, and minus five percent, respectively, Markaz said.

“The slowdown in earnings growth across GCC started from the third quarter of 2008, coinciding with declines in commodity prices, freezing in the credit markets and a downturn across stock markets,” Markaz said in a research note.

GCC earnings growth for 2008 is expected to fall into negative territory at minus eight percent, down from 30 percent growth seen in 2007 and marking the first negative growth period since 2003.

Markaz predicts earnings growth of zero percent of 2009, forecasting a 26 percent slump in earnings of investment services companies, a six percent fall in banks and a 10 percent slide in real estate earnings.

The sectors which Markaz expects to cushion GCC economies from further damage are telecommunications, utilities and commodities, with projected growth rates of 21 percent, 10 percent, and 10 percent, respectively.

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READERS' COMMENTS

Hits just keep on coming!
Posted by John Doe on Thursday 15 January 2009 at 11:48 UAE time


This should come as a respite to all those who suffered (specifically expats)! It can't be clearer then this.....

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