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GCC exchanges and listed companies are experiencing a boom

These are exciting times for local exchanges. In early November, Dubai announced plans to launch a $545 million market-maker fund and initial public offerings

Dubai plans to list its "Salik" road toll system on the Dubai Financial Market Listed companies in the GCC region saw their financial earnings hit a record high of $55.5 billion The Banking sector reported higher profits during the quarter at $9.6 bn

These are exciting times for local exchanges. In early November, Dubai announced plans to launch a $545 million market-maker fund and initial public offerings.

The Dubai government started off with plans for a stock market flotation of Dubai Electricity & Water Authority (DEWA), among 10 state-backed companies to be listed as part of plans to boost activity on the local bourse.

DEWA has selected Citigroup, HSBC Holdings, and Emirates NBD Bank to lead its initial public offering, Bloomberg reported. The state-owned company is expected to become the biggest listing in Dubai, with plans to seek a valuation between $20 billion to $25 bn.

Dubai, as well, plans to list its “Salik” road toll system on the Dubai Financial Market,  deputy ruler, Sheikh Maktoum Bin Mohammed, said on Twitter in mid-November 2021.

Salik has eight toll gates and 3 million registered vehicles, out of which 1.8 million are registered in Dubai, according to the Dubai Media Office.

Dubai Holding is also considering taking business parks operator TECOM Group public, according to Reuters.

That’s Dubai and it may explain the boost UAE exchanges are witnessing, but other GCC exchanges and their listed companies are themselves racking massive wins

Top financial earnings

Listed companies in the GCC region saw their financial earnings hit a record high of $55.5 bn during Q3 2021, more than double on a year-on-year (y-o-y) and 23% on a quarter-on-quarter (q-o-q) basis.

A report on corporate earnings by Kamco Invest said: “The Covid-19 pandemic has largely remained under control over the last few months with declining  and as a result, the bulk of the economic sectors are back at pre-pandemic capacities barring a few that include Tourism and Hospitality sectors.”

The energy sector reported the biggest absolute profits in the region at $29.7 bn, more than double y-o-y and 19 percent higher q-o-q. Profits for Saudi Aramco were up more than 146% y-o-y during Q3 at $29 bn, whereas the rest of the companies in the sector reported profits of $596 million compared with a loss of $145.4 mn in Q3-2020.

The Banking sector also reported higher profits during the quarter at $9.6 bn; a growth of over 36% y-o-y and 17% q-o-q. Dubai-listed banks reported a more than a two-fold increase in net profits in Q3-2021 followed by Kuwaiti and Bahraini-listed banks.

Year-to-date, the DFM has risen by almost 31%, while ADX had exceptional gains of 65%

Banks saw an 8% rise in revenue among major sectors while profits spiked 53%. The sharp increase in banking sector profits was due to a reduction in staff costs and related administration expenditure. Emirates NBD, the largest bank by revenue, saw its profits soar by 61%, while First Abu Dhabi Bank observed a 29% and 54% surge in revenue and profits, respectively.

The transportation sector notched up a net profit of $3.34 bn in Q3-2021 versus $0.04 bn in Q3-2020.

Airline companies also saw a 109% and 1,526% jump in revenue and profit due to the normalization of travel. Air Arabia’s revenue rose 174%, while Abu Dhabi Aviation witnessed a 46% gain.

In a sign of recovery, the real estate sector witnessed a 41% and 219% rise in revenue and profits, respectively. RAK Properties showed the most significant advancement in sales of 178% while its earnings spiked 449%. Emaar Properties, the most prominent company by revenue, saw a 65% rise in topline and a 183% surge on the bottom line.

Top-performing exchanges

In terms of countries, aggregate net profits for Kuwait listed companies rose five times y-o-y to $5.6 bn in Q3-2021.

In the UAE, the companies listed on DFM saw net profits double in the quarter to $2.3 bn. Abu Dhabi ADX-listed corporates had a y-o-y growth of over 75% to $4.4 bn.

Aggregate net profits for Saudi Arabian listed companies rose over 123% y-o-y to $39 bn in Q3-2021.