GCC business leaders are more confident of growth than their global peers and this is reflected in their rise in investment, according to the result of a survey conducted by Full Circle Investments (FCI), an independent and dynamic strategy consulting and corporate finance advisory firm based in Dubai.
The results of this timely study were issued this morning, underscoring indicators of the return to economic and corporate growth.
Cited as the most comprehensive survey conducted in the region and based on in-depth interviews with CEOs and captains of industry representing over 150 companies of high net value, it has been designed specifically to assess their confidence in global and regional economic growth and examine the challenges they face.
The survey showed that 67% of the GCC’s business leaders are in agreement that things are now much brighter and moving speedily in the right direction. The measure of the interest in investing is reaffirmed by the fact that they are confident of growth in the global economy versus an average of just 40% of global corporate leaders. This attitude is further strengthened by the data in which as high as 90% are convinced that the GCC economies will grow exponentially in the next 12 months. The optimism is echoed in their belief that where corporate growth is concerned, 86% stressed that they are ‘very confident’ or ‘confident’ of their own company’s growth in the next 12 months.
“We are privileged and honored to have had access to the highest level of corporate leaders in the region at a critical time of decision-making and strategizing amidst global economic and political uncertainty. Our survey has highlighted that a healthy amount of decoupling exists in the GCC region which is poised to enter into a renewed period of growth that has the potential, this time round, to catapult certain regional companies on to the global stage,” said Ghassan Medawar, founding partner, Full Circle Investments.
“The result of our survey is heartening and highlights the growing optimism in the region. The common sentiment is that this region will do well. It has the requisite geographic location, the oil, the population growth and stable and able governments, all of which make it an attractive proposition,” he added.
This confidence is predicated on the premise that “oil is paramount,” with 70% of respondents ranking high oil prices as the most important driver for GCC economic growth.
Political uncertainty in the wider region does currently serve to maintain high oil prices. This situation, in turn, has prompted unprecedented government spending and economic reforms, the benefits of which are now expected to flow through the region. In brief, the GCC will benefit from political uncertainty with stronger fiscal and current account balances and a higher GDP growth.
Most of the decision makers clearly believe that companies are emphasizing smarter, more considered growth in the short and long term scenarios.
Although this is not the first time the GCC is experiencing a strong economic growth outlook underpinned by government spending there are both qualitative and quantitative differences this time around. Market dynamics have changed, competition has increased and funding is less readily available.
Companies are looking inwards and increasingly focusing on their own resources for funding growth (72%). As a result, they are also primarily relying on organic growth in the next 12 months (81%).
While 14% view M&A as the primary growth driver as high as 73 % expect to close an M&A transaction in the next 12 month period.
The growth, however, is not without its own set of challenges. These include constraints on obtaining the right talent and addressing ‘organization health issues.’
Forward looking companies are of the opinion that as more opportunities become available, those businesses that are flexible and can navigate these issues and strengthen their corporate fabric will be in a strong position to capture unprecedented growth in their markets. These corporations are destined to be the fresh spearhead of the industrial push but also become globally competitive.
For more info please visit FCI website: www.fullcircleinvest.com
About Full Circle Investments
Full Circle Investments specializes in conducting detailed company diagnostics including strategic, commercial and financial reviews. We are privileged to be working with several of the leading family groups, investment firms and corporations in the MENA/GCC region. Full Circle Investments is an independent, entrepreneurial and integrated advisory firm providing a unique synthesis of strategy consulting and corporate finance support.