Over the medium to long term, it is structural change driven by economic diversification that will deliver continued growth.
Saudi Arabia’s Vision 2030 exemplifies the region’s transformative ambitions, with plans for a thriving economy that includes leveraging the country’s location, attracting talent, and increasing global investment. There are similar plans in the United Arab Emirates: the “We the UAE 2031” plan aims to double the size of the national economy, while the Dubai “D33” plan sets the ambition to be a number one world city in logistics, manufacturing, finance and tourism – with enhanced trade with Asia a key policy goal.
In Asia, the next generation of growth drivers are emerging. Take electric vehicles for example, a rapidly growing sector that combines sustainability and innovation. The EV supply chain is currently being built across the region, creating attractive openings for investment in miners, battery makers, and car companies. Other major themes include renewable energy, ecommerce, and FinTech.
In financial markets, all these secular economic trends have resulted in robust pipelines for IPO deals. In 2022, there were 48 listings in the GCC, up from 20 in the previous year, raising $23.4 billion3. These deals were popular among Asian investors, who were able to gain exposure to companies in a diverse range of sectors – including healthcare, real estate, and capital goods. Early in 2023, the flow of GCC IPOs remained strong4.
At the other end of the investment corridor, Asia-Pacific leads the world’s equity capital markets. In the first half of 2023, the region had the highest volume and value of IPOs in the world, of which half were from mainland China5. Middle Eastern investors are active participants in many of the region’s IPOs, as they look to gain stakes in companies involved in technology and sustainability.