Dubai-listed companies increased earnings by a whopping 88.2 percent in 2012, leading the GCC’s economic recovery, according to an analysis by Kuwaiti-based Global Investment House.
Corporate earnings rose an average 4.5 percent across the six GCC countries to US$55.4 billion last year compared to 2011, the report found.
The overall performance was pulled down by declines in Bahrain (-34.6 percent) and Qatar (-0.3 percent).
Saudi Arabia remained the largest contributor to overall GCC corporate earnings, accounting for 46 percent, followed by the UAE (21.2 percent) and Qatar (18.7 percent).
The UAE’s overall corporate earnings grew by 28.8 percent, influenced by a strong recovery in the real estate markets of Dubai and Abu Dhabi.
Earning from Dubai’s real estate market grew by 282 percent, well ahead of telecommunications (up 80.4 percent), banking (up 24.1 percent) and insurance (16.4 percent).
Banking was the largest contributor to earnings in the emirate at 47.5 percent, while the real estate sector accounted for one-fifth.
Abu Dhabi corporate earnings put on 13.6 percent, led by banking (up 9.3 percent), real estate (104.4 percent) and telecommunications (12.9 percent).
Despite reasonable growth, the banking sector has slowed since 2011 under the pressure of tougher regulations, according to Global Investment House, a subsidiary of the National Bank of Kuwait.
Consolidated earnings by companies on the Saudi Arabian exchange TASI remained flat at US$25.5 billion, primarily due to a 16.8 percent decline in earnings of petrochemical companies, which accounted for 35.4 percent of all earnings.
The kingdom’s banking sector grew 11.9 percent, while telecommunications companies increased earnings by 6.8 percent and the agriculture and food industries sector grew 16.2 percent. Meanwhile, the largest developer, Dar Al Arkan Real Estate Development Co’s earnings decreased 9.1 percent on rising operating expenses and finance costs.
Kuwait continued its steady growth in corporate earnings, growing 12 percent, despite large declines in the telecommunications sector (down 50.3 percent).
Robust growth in the banking and investment sectors saw Oman increase corporate earnings by 14.3 percent.
A significant 56 percent decline in the real estate sector in Qatar caused its overall corporate earnings to fall 0.3 percent.
Bahrain – marred by social unrest – suffered significant losses in the industrial sector (down 53.9 percent), including 53.9 percent decline in major player Aluminium Bahrain.
The commercial banks sector, which accounts for 61.4 percent of Bahrain Stock Exchange’s earnings, rose 7.7 percent.