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Gulf Business Sectors Required to Develop Plans and Rectify Investment Imperfections to Cope with New Local, Regional and Global Circumstances

Investors are heading to Canada and Australia in search for fresh markets

Diversifying investment projects is a significant factor that ensures success, sustainability and development. The development of solid and well-thought plans and strategies is essential to maximise financial and business gains and achieve set targets. It has become crystal clear that GCC states are following coherent approaches that help them efficiently respond to world developments, particularly with regards to investments, with the objective of developing certain mechanisms that have a direct impact on their investment environment and local economies.

In its weekly real estate report, Al Mazaya Holding noted that different business sectors need to develop their investment environment by enhancing competitiveness and attracting more capital and cash flows in order to ensure success for their small and medium-term business plans. Current data and statistics show that the region’s markets boast economic, financial and political stability that is likely to help the region’s countries safely maintain their investment quotas over the coming period with no risk exposure.

The report also noted that the Gulf countries are not classified among the markets that are suffering negative effects, nor are they able to adopt and accommodate all types of foreign investment plans. This is due to the fact that they differ in their business preparedness, readiness and capabilities. In addition, modernization and development plans are impacted by several factors, primarily financial, economic and political stability. It is this stability that directly affects competitiveness and whose absence widens the gap with top world business organisations.

The report highlighted the successes made by the UAE and Qatari markets over the past period, thanks to their readiness and adaptability to foreign business trends as well as the support given by their governments in terms of streamlining legislations, developed infrastructure facilities and high spending plans – advantages that have all reflected positively on the high growth levels secured by the two countries.

A country’s competitiveness is measured by a number of factors, atop of which comes innovation and creativity, according to the report. Cash flow freedom, bureaucracy levels and tax and customs laws are other factors that play a major role in ranking the world’s most competitive countries, with investment companies commissioning thorough studies before launching their businesses to identify a country’s ranking on the global competitiveness index guided by these factors.

The report noted that the policies adopted to privatise the public sector play a significant role in expanding private sector activities, elaborating that the stability of the stock markets and their ability to yield positive returns is of a vital importance in attracting investments. Investment-friendly laws and environment help create the required momentum on all production and service sectors.

The report highlighted the growing business opportunities created by increasing competitiveness as well as the decline in economic growth levels across the region and the whole world. Such economic circumstances have led to more synergies, mergers and acquisitions in the Gulf and global markets. Mergers are considered an efficient option that helps enhance competitiveness, growth and economic expansion amidst such a state of economic deceleration.

The region’s countries now witness a growing tendency toward synergies and mergers, with the total value of integrations concluded during 2015 amounting to $ 40 billion, while 2016’s total value of integration processes is not expected to be less than that in 2015. Such mergers aim to enhance operational efficiency and productivity vis-à-vis the current stage of economic deceleration. The tendency toward acquisition, integration and mergers steadily continues among major world companies. The region has recently witnessed 80 such processes where local companies have either been acquired or merged. In addition, Gulf companies have completed 108 mergers and acquisitions overseas worth around $17.3 billion.

The report noted that GCC states need to reinvigorate their business plans on a regular basis, redefine their marketing plans in the way that can cope with the fast-paced market changes, and opt for markets that enjoy more political and financial stability.

In this regard, the report said that Australia offers investment opportunities that entail huge capital like sovereign wealth fund investments in areas of infrastructure, ports, roads, railways, power generation, and so on. The Australian economy enjoys a highly competitive edge especially in the US, British and Japanese markets, with the Australian government now tending to attract Gulf investments. Recent data revealed that the UAE investments in Australia have exceeded $26 billion, with the bilateral trade exchange edging to more than $22 billion.

Foreign trade and economic relations mainly come through government agreements and deals, while individual investments are concentrated in areas of stock and money exchange and real estate, said the report. The Canadian market is now an investment favorite in areas of energy and maritime trade.

Recent data put UAE investments in Canada at more than AED 85 billion and trade exchange at more than AED 6 billion in 2015. A series of discussions has been held over the past period to provide momentum to Gulf-Canada economic relations and engage the Gulf’s private sector to play a more efficient role in strengthening business partnerships.

Canada and Australia are considered among the most favored investment destinations, especially in areas of real estate, which have secured positive growth over the past few years. This is a direct result of the sustained demand over different categories of residential property fueled by the increasing number of new immigrants who have triggered a demographic change in these countries and accelerated growth in the property sector.

Conclusion

In conclusion, the report said that Gulf countries are required to place more emphasis on innovation, state-of-the-art technology and strengthening their brand identity while targeting those markets that enjoy tax incentives, adding that they have to be well geared for more feasible investments.