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Key takeaways

  • The Middle East region is growing—fast. Countries in the Gulf Cooperation Council (GCC) have successfully reduced their dependence on oil and gas, opened their capital markets and diversified their economies.
  • Of the six members of the GCC, Saudi Arabia, UAE, Qatar, Oman, Kuwait and Bahrain, four are constituents of the MSCI Emerging Market Index, with a fifth, Oman potentially joining in 2027.
  • Saudi Arabia’s Vision 2030 is driving investment and economic growth, positioning the Kingdom as the premier destination for international events and enhancing its tourism offering.
  • Dubai’s new airport and solar power investment is fulfilling its sustainable tourist development plan with a goal of raising renewables share of the energy mix and tourism’s contribution to GDP.
  • Investment in Qatar’s North Field gas expansion will double liquified natural gas production by 2030.
  • Kuwait is showing signs of a long-awaited economic awakening. Its recently approved a sovereign debt law and new mortgage law, could unlock growth in the banking, real estate and construction sectors.

The structural reforms, improved governance and rising investor confidence have contributed to a decline in the equity risk premium from a 10 year high of 6.6% in 2016 to 2.4% in March 2025. A lower equity risk premium should, other things equal, lead to a decline in the cost of capital for a company, potentially increasing returns for shareholders in GCC companies.

WHAT ARE THE RISKS

All investments involve risks, including possible loss of principal.

Equity securities are subject to price fluctuation and possible loss of principal.

International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Investments in companies in a specific country or region may experience greater volatility than those that are more broadly diversified geographically.

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