The best GCC companies to invest in

Buying shares in the Gulf? Heed our financial guru's advice.

Jason Cook August 3, 2016

The GCC market is unique for many reasons and it's volatility can bring you great returns or hurt you fast. Therefore it’s wise to stick to reasonably well-known names with good stories and good outlooks.

With two of the Emirates biggest banks merging – National Bank of Abu Dhabi and First Gulf Bank – investors are speculating there will be further consolidation in the region.

Here are some of the best companies to have in your portfolio. 

Qatar National Bank
Great growth potential and reasonable dividend income

QNB is the biggest bank in the region and has consistently high profitability levels, supported by its dominant market position and government relationships. 

Qatar’s biggest bank has strong asset quality and sound capitalisation, together with increasing business diversification from non-domestic operations; QNB is a GCC stock you should buy.

Emaar Properties
Great growth potential and low dividend income 

Over the past 17 years, Emaar has redefined the dynamics of property development, being regarded as the best end-to-end developer in the GCC. Up 17 per cent year to date, it’s share price has shown resilience to losses last year. Emaar must be a stock you own as part of a diversified portfolio of shares.

Emirates Integrated Telecommunications Company (Du)
Great growth potential and low dividend income

Du is taking more and more of the UAE communications market share every day. At just over 10 years old the company is perhaps a little younger than you would imagine, however their strength lies in the diverse and dynamic workforce, led by a visionary leadership team.

The brand is great and with an ever-expanding range of services and a growing market base to sell to; this is the communications stock you should back.

Saudi Basic Industries Corp
Great growth potential and high dividend income

SABIC is one of the world’s top petrochemicals companies. The company is among the world’s market leaders in the production of polyethylene, polypropylene and advanced thermoplastics, glycols, methanol, and fertilizers – and one of the largest producers of steel in the Middle East. With their costs under close scrutiny after the loss of government subsidies, SABIC has the potential to grow back stronger than ever before. 

If you are unsure about buying individual stocks you could always ask your advisor to diversify. iShares offer a number of Middle Eastern investments that are diversified, and are cost effective which will be better suited for the average investor.

As always when making financial decisions take advice, yes you pay a little, but a professional advisor does this every day and will be likely to make you more money!

Jason Cook is a financial advisor and head of High Net Worth at Guardian Wealth Management; financial-advice.ae.