Putting your money into the Middle East

16 Aug 2015

The new trend of investments is looking towards the Middle East. Violence and instability notwithstanding, the Middle East is slowly being viewed as a lucrative market for investments. This belief has got a further impetus from the International Monetary Fund, which stated in a report that the region’s economy would expand at a 5.1%. The energy market isn’t the only available option of investment today. Investors can also put their bets on construction, technology, tourism, banking, healthcare and other new businesses.

Construction is one of the most preferred and lucrative sectors for investors today. There is an enormous change in the Middle East with many nations spending on developing their infrastructure. For example, Saudi Arabia’s King Abdullah bin Abdulaziz Al Saud has launched a massive program to build up to 500,000 new houses for Saudi citizens. Qatar alone is expected to open 35 new hotels this year, and 75 more are already open or about to come online in Abu Dhabi, the capital of the United Arab Emirates. Similar infrastructure projects have been started, or are on the drawing boards, in other countries throughout the region.

The financial sector is also not far behind with increasing trading activity and market values. Although most Middle Eastern stock exchanges restrict foreign access or have limited listings of public companies, Abu Dhabi and Dubai are trying to change that by forging a new identity. The Saudi Stock Exchange – recently reached a total value of $360 billion. Even nations like Iraq are participating in creating funds and investments that will help bring in foreign funding into their nation. IPOs are slowly making a comeback and banks and healthcare companies are the leading investor recommendations.

Real estate is another sector that is finding many investors from Westerners and other rich nations around the world. Commercial investments have risen significantly in all Arab nations in the past 5 years. Middle East investors are the major drivers of increased activity in the European commercial real estate market too. The Arab nations are also increasing their property holdings around the world including Europe, Japan and the United States of America.

The six-member GCC — Saudi Arabia, United Arab Emirates (UAE), Kuwait, Qatar, Bahrain and Oman — represent possibly the wealthiest country grouping in the world. The interest in diversification by the GCC has forced them to open up their markets and nations to foreign investments. A recommended nation by analysts for investment is Bahrain because it is less rigid and more modern than its counterparts. In terms of currency investments Kuwait is the recommended nation as its currency is not pegged to the USD.

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