• Investors maintain a positive economic outlook for Saudi Arabia and the UAE over the coming 12 months.

SICO BSC (c), a leading regional asset manager, broker, market maker, and investment bank licensed as a conventional wholesale bank by the Central Bank of Bahrain “CBB”, published its second annual investor return assessment survey, offering an inside look into the economic and return expectations of investors across the GCC.

In its second year running, the online survey commenced this year in September and compiled data from C-Suite executives, investment and fund managers, business owners, and institutional investors representing a diverse mix of GCC enterprises, multinational companies, listed and private companies, and government entities. The survey sought responses on the overall economic outlook and minimum unleveraged return requirements for various asset classes, including listed equities, government bonds, real estate, private equity, and cash deposits for all six countries in the GCC. The survey also touched on the issues which are currently of the most concern to investors.

SICO’s CEO, Najla Al-Shirawi, said, “As a trusted provider of top research in the region for over two decades, SICO distinguishes itself with its ability to deliver high quality and objective research, which includes economic reports, sector reports, and company-specific valuation reports of listed companies across the GCC. We were keen on producing our annual investor returns requirements survey, expanding our respondent base to get a better pulse on investors’ economic expectations, which further reinforced our ability to fairly value various assets. The results confirmed our insights and provided a basis for us to develop suitable products and investment opportunities in line with investor expectations that can deliver positive returns for our clients, as we’ve consistently done throughout the years.”

Based on SICO’s analysis, all investors throughout the GCC expect cash deposit returns of above 3%, compared to less than 3% in 2021, and see inflation as the key concern for the next 12 months. Private equity remained the asset class requiring the highest returns, at 14%, reflecting its significance to investors, despite the higher risk associated with it compared to other asset classes.

With regards to 10-year USD government bonds, required returns in Saudi Arabia, the UAE and  Kuwait, stood between 3-5% annually. While the majority of respondents maintained their annual return expectations in their 2022 responses at a similar level to 2021 for Oman and Bahrain between 6-8%, a considerable number of investors this year also expect higher returns of between 9-11% for this asset class.

Within income-generating real estate, investors required 9-11% in the UAE – the highest across GCC markets – while investors required a lower return of 6-8% in Kuwait, Bahrain, and Saudi Arabia.

Return requirements for listed equities increased to 9-11% in Saudi Arabia and the UAE from 6-8% last year. Similarly, higher return expectations are trending for the other GCC markets as well. 

The survey also concluded that investors are generally optimistic about the economic outlook of Saudi Arabia and the UAE while being broadly neutral on other countries such as Kuwait, Bahrain, and Oman.

“2022 has been a challenging year globally, but we see the GCC faring better than most regions. A positive economic outlook for Saudi Arabia and the UAE and a neutral one for Bahrain are great news for us, as we strengthen our foundation as a leading player in Bahrain and grow our business in both Saudi Arabia through our recently acquired subsidiary, SICO Capital, a full-fledged investment bank, and our subsidiary, SICO Financial Brokerage, in the UAE,” added Al-Shirawi.

In 2022, economic performance in GCC countries was cushioned by government reforms, fiscal surplus, relatively higher oil prices, diversification of the economy, and a strong non-oil momentum, which led to less inflationary pressures compared to global peers.

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About SICO

SICO is a leading regional asset manager, broker, market maker and investment bank, with USD 4.4 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 SICO Capital, a Saudi-based investment banking company. 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.

Media Contact:
Ms. Nadeen Oweis
Head of Corporate Communications, SICO
​​​​​​​Email: noweis@sicobank.com