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Industry Reports

2017
2016
2015
2014
2013
2012
2011
2010
2009
GCC Food Industry Report

GCC Food Industry Report
February 2017

GCC Retail Industry Report

GCC Retail Industry Report
May 2017

GCC Healthcare Industry Report

GCC Healthcare Industry Report
February 2016

GCC Healthcare Industry Report

GCC Education Industry Report
May 2016

GCC Healthcare Industry Report

GCC Hospitality Industry Report
August 2016

GCC Automobile Industry Report

GCC Automobile Industry Report
December 2016

GCC Retail Industry Report

GCC Retail Industry Report
January 2015

GCC Food Industry Report

GCC Food Industry Report
April 2015

GCC Construction Industry Report

GCC Construction Industry Report
June 2015

GCC Construction Industry Report

GCC Insurance Industry Report
October 2015

GCC Aviation Industry Report

GCC Aviation Industry Report
March 2014

GCC Healthcare Industry Report

GCC Healthcare Industry Report
April 2014

GCC Education Industry Report

GCC Education Industry Report
July 2014

GCC Hospitality Industry Report

GCC Hospitality Industry Report
September 2014

GCC Investment Destination

GCC Investment Destination - Opportunities for Indian companies

GCC Aviation Industry Report

GCC Pharmaceutical Industry Report
March 2013

GCC Food Industry Report

GCC Food Industry Report
May 2013

GCC Insurance Industry Report

GCC Insurance Industry Report
July 2013

GCC Investment Destination

GCC as an investment destination
November 2013

GCC Construction Industry Report

GCC Construction Industry Report
March 2012

Trade and Capital Flows - GCC and India

Trade and Capital Flows - GCC and India
May 2012

GCC Education Industry Report

GCC Education Industry Report
June 2012

GCC Hospitality Industry Report

GCC Hospitality Industry Report
October 2012

GCC Retail Industry Report

GCC Retail Industry Report
December 2012

GCC Hospitality Industry Report

GCC Hospitality Industry Report
April 2011

GCC Food Industry Report

GCC Food Industry Report
June 2011

GCC Insurance Industry Report

GCC Insurance Industry Report
August 2011

GCC Retail Industry Report

GCC Retail Industry Report
November 2011

GCC Healthcare Industry Report

GCC Healthcare Industry Report
December 2011

GCC Takaful Industry Report

GCC Takaful Industry Report
January 2010

Gulf Petrochemicals Industry Report

Gulf Petrochemicals Industry Report
March 2010

GCC Retail Industry Report

GCC Retail Industry Report
May 2010

GCC Education Industry Report

GCC Education Industry Report
September 2010

GCC Pharmaceuticals Industry Report

GCC Pharmaceuticals Industry Report
December 2010

GCC Cement Industry Report

GCC Cement Industry Report
January 2009

GCC Retail Industry Report

GCC Retail Industry Report
April 2009

UAE Insurance Industry Report

UAE Insurance Industry Report
August 2009

GCC Healthcare Industry Report

GCC Healthcare Industry Report
September 2009

GCC Retail Industry Report

GCC Retail Industry Report

May 2017

The GCC retail sector continues to remain an active contributor to the region’s economic development. Although the sector is experiencing a slowdown, the long-term fundamentals of the sector remain strong and are expected to grow steadily through 2021. A favorable demography, high per capita income and an active tourism industry have attracted renowned international retail brands to the GCC. Changing consumer preferences and proliferation of digital devices are further reforming the region’s retail landscape. The numerous mall developments in the pipeline and growing penetration of modern store formats are a testament to immense opportunities in the sector. Furthermore, government efforts to encourage foreign investments, to strengthen tourism infrastructure and prevent entry of counterfeit products are lending impetus to the GCC retail sector.

Industry Outlook

According to Alpen Capital, size of the GCC retail sector is forecasted to grow at a CAGR of 4.6% from US$ 250.5 billion in 2016 to US$ 313.2 billion in 2021. After witnessing a drop in 2016, retail sales are likely to grow at a slow pace in 2017, in view of the prevailing economic environment. Nevertheless, the sector is expected to recover in 2018 and grow steadily through 2021 driven by the expected rise in population, international tourist arrivals and per capita income.

GCC Retail Sales

Between 2016 and 2021, non-food retail sales are anticipated to grow at an annualized rate of 5.3% led by the increasing number of youngsters and expatriates, who are propelling demand for innovative, trendy and international consumer products. During the period, food retail sales are likely to grow a CAGR of 3.5%, driven by the expanding consumer base and demand for health foods. The GCC population is expected to grow at an annualized rate of 2.3% between 2016 and 2021. An expanding consumer base, comprising a high proportion of young and working-class, is the major growth driver for the retail sector. GDP per capita (at current prices) in the GCC is projected to expand at a CAGR of 4.3% during the forecast period and is also likely to drive the growth of the sector. Going ahead, an anticipated recovery in economic conditions is likely to boost consumer sentiments and spending.

Country wise Retail Sales

During the forecast period, total retail sales in the GCC nations are projected to grow in the range of 3.3% to 5%. Saudi Arabia and Bahrain are expected to register the fastest growth, driven mainly by increase in tourism activity and per capita income.

Supermarket/Hypermarket Sales

Sales at supermarkets/hypermarkets are forecasted to grow at a CAGR of 4.3% between 2016 and 2020. A faster growth rate than food retail sales indicate the rising penetration of such stores.

The retail e-commerce market in the GCC is expanding, given the increasing use of internet and social media, better access to secure payment gateways and gradual improvement in the delivery system. The region’s e-commerce sale is expected to touch US$ 41.5 billion by 2020[1]. The UAE is the largest online retail market in the GCC with a market share of 53%, followed by Saudi Arabia (14%), Oman (12%) and Qatar (10%). As demand increases, the region is likely to see emergence of new e-tailers and revamp of online portals by traditional retailers

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GCC Food Industry Report

GCC Food Industry Report

February 2017

An expanding multi-ethnic, young and affluent society, supplemented by a growing tourism sector continue to drive the GCC region’s appetite for food. Furthermore, fast-paced lifestyle and gastronomic diversity of the region have led people to develop a penchant for packaged and international foods. To meet the growing demand, several food processing units, restaurants and modern grocery retail outlets have been establishing presence in the region. Newer food service channels such as mobile trucks and online retail and delivery platforms are also making inroads. Beyond these driving forces, the regional governments’ efforts to adopt new farming practices, develop domestic livestock projects and secure farmlands abroad are reinforcing the GCC food landscape.

Industry Outlook

According to Alpen Capital, Food consumption in the GCC is expected to expand at a CAGR of 4.2% from an estimated 48.1 million MT in 2016 to 59.2 million MT in 2021. This growth is primarily attributable to increase in the consumer base coupled with a higher per capita income, as the GCC economies stage a sustained economic recovery from the recent downturn.

Respective share of most of the food categories in the overall consumption are anticipated to remain broadly unchanged through 2021 with cereals as the most consumed food category in the region.

Saudi Arabia and the UAE are likely to remain the major food consumption centers during the forecast period. The country-wise share in total GCC food consumption is anticipated to remain largely unchanged until 2021.

During the forecast period, food consumption in Saudi Arabia is expected to grow at an annualized average rate of 4.2% to 37.7 million MT and that in the UAE is projected to grow by 4.4% to 10.1 million MT. The expected growth rates largely mirror the population and GDP projections for the countries.

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GCC Automobile Industry Report

GCC Automobile Industry Report

December 2016

The GCC automobile sector is dynamic and one of the faster growing sectors in the world, primarily owing to the growing population and high disposable income coupled with significant infrastructure developments in the region. The sector, however is currently facing a slowdown amid a weak economic environment and low oil prices as consumers scale back new car purchases. Passenger Car sales will remain under pressure in 2017 but are likely to rebound in 2018 and thereon grow at a stable pace in anticipation of a recovery in oil. Other factors fueling growth include increasing disposable income, growing population and availability of attractive financing options in the country.

According to Alpen Capital, number of passenger cars in use in the GCC is expected to grow at a 5.0% CAGR from an estimated 10.3 million in 2015 to 13.2 million in 2020.

New passenger car sales are projected at 1.4 million in 2020, compared to 1.2 million in 2015. Although new sales declined in 2016 and will be under pressure in 2017, we expect to see steady growth starting 2018 as the economic environment stabilizes and creates pent-up demand. The anticipated growth is slower compared to that during last five years in view of the near-term softness in economic activity, as consumers tighten discretionary spending and delay buying new cars.

Country wise projection

Between 2015 and 2020, passenger cars in use in the GCC countries is anticipated to register an annual average growth rate ranging from 3.6%-5.4%. Saudi Arabia, UAE, and Kuwait collectively are expected to continue holding more than 75% of the region’s passenger car fleet in 2020.

Sales of new cars in Saudi Arabia is likely to reach nearly 743,000 in 2020, suggesting a suggesting a CAGR of 2.0% from 2015.

New car sales in the UAE are projected to grow at an annualized rate of 4.5% to over 267,000 in 2020 from an estimated 214,000 in 2015.

A rise in population coupled with demand from car rental or tourism agencies in view of increasing tourist arrivals is also expected to support new vehicles sales growth, going forward.

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GCC Hospitality Industry Report

GCC Hospitality Industry Report

August 2016

Backed by an active tourism market, the GCC hospitality industry remains firm on its growth trajectory. Though drop in oil prices and currency depreciation is currently affecting demand, the sector’s long-term outlook remains strong. Government measures to bolster tourism activities in the region like encouraging private sector investments, building new attractions, expanding airport capacity, and increasing international promotion campaigns are providing impetus to the growth of the Hospitality sector in the region. A thriving segment of meetings, incentives, conferences, and exhibitions (MICE), spate of technological advancements, and brisk development of midscale hotel properties are amongst the key factors elevating the appeal of the GCC hospitality sector.

The GCC Hospitality market is expected to grow at a 7.6% CAGR from an estimated US$ 25.4 billion in 2015 to US$ 36.7 billion in 2020, driven by a robust pipeline of hotels and serviced apartments coupled with a continual rise in tourist arrivals.

The market size of the GCC hospitality sector is anticipated to decline in 2016, however growth is likely to recover from 2017. The key operating metrics of the sector is expected to remain under pressure in the short-term, mainly in the UAE and Qatar, but is likely to rebound in the long-term supported by demand.

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GCC Education Industry Report

GCC Education Industry Report

May 2016

The GCC education sector is witnessing a robust growth in student enrolments coupled with a steady expansion in related infrastructure. Population growth and rise in disposable income have supported the growth of the private education sector. Further, Government measures to encourage private sector investments alongside an increasing preference for international curricula among residents are also attracting renowned foreign education institutes to the region.

Industry Outlook

According to Alpen Capital, the total number of students in the GCC education sector is projected to reach 15.0 million in 2020, registering a CAGR of 3.6% from an estimated 12.6 million in 2015. An expanding base of school and college age population and increase in the Gross Enrollment Ratio (GER) across the education segments are likely to drive the growth.

According to Alpen Capital, the total number of students in the GCC education sector is projected to reach 15.0 million in 2020, registering a CAGR of 3.6% from an estimated 12.6 million in 2015. An expanding base of school and college age population and increase in the Gross Enrollment Ratio (GER) across the education segments are likely to drive the growth.

The number of students at private schools is projected to grow at a 5.1% CAGR from 2015. Enrolments at public schools are anticipated to increase at an annual average of 2.6%.

During the forecast period, the number of students in pre-primary (annual average of 4.5%) and tertiary segments (annual average of 5.5%) is anticipated to increase faster than that in the other segments. However, students at primary and secondary segments will continue to form over three-fourth of the total students.

Saudi Arabia will continue to dominate the education market in the GCC by 2020. From an estimated 9.2 million in 2015, the total number of students in Saudi Arabia is projected to grow at an annualized rate of 3.5% to 11.0 million in 2020. In terms of annualized growth during 2015 to 2020, the number of students in Oman, Qatar, and the UAE are projected to grow faster than the other member nations.

The demand for schools in the GCC region is likely to increase at a 3.0% CAGR from an estimated 43,903 in 2015 to 50,978 in 2020. This signifies requirement of more than 7,000 schools in the next five years, most of which are anticipated in Saudi Arabia. While the demand for public schools in the GCC is expected to increase at an annual average of 2.6%, that for the private schools is anticipated to rise at a faster rate of 5.4% during the forecast period.

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GCC Healthcare Industry Report

GCC Healthcare Industry Report

February 2016

Development of the healthcare sector has taken a center stage in the GCC countries, as they witness an era of demographic transition accompanied by rising prevalence of lifestyle-related diseases. In order to ease the growing pressure on the healthcare system, the GCC governments are injecting huge funds as well as encouraging private sector participation to build hospitals and clinics, upgrade the existing infrastructure, and match the quality of services offered in developed countries. They are also investing heavily in technological advancements as well as rolling out mandatory health insurance schemes in all the countries to further accelerate the growth of the healthcare sector.

The GCC governments’ emphasis on the development of the healthcare sector has resulted in several investment opportunities for the private sector. Over the last year, we have seen a steady flow of private equity funds into the sector and the region has witnessed several successful M&A transactions. The GCC governments’ budgets are increasingly coming under pressure amid falling oil prices thereby opening up investment arenas for regional and international private sector players to make their entry into the healthcare market. We see this trend strengthening as governments and private companies work with each other to benefit from the opportunities presented by the GCC healthcare sector.

The GCC Healthcare Industry Outlook

According to Alpen Capital, the GCC healthcare market is projected to grow at a 12.1% CAGR from an estimated US$ 40.3 billion in 2015 to US$ 71.3 billion in 2020.An increase in the population and rising cost of treatment are the primary factors aiding this growth.

From an estimated US$ 24.0 billion in 2015, the outpatient market is forecasted to reach US$ 42.4 billion in 2020. The inpatient market is anticipated to grow from US$ 16.4 billion to US$ 28.9 billion during the same period.

The healthcare market in each GCC country is anticipated to expand by 11%-13% between 2015 and 2020 in terms of annual average growth rates.

The demand for number of hospital beds in the GCC region is projected to grow at a 2.3% CAGR from an estimated 101,797 beds in 2015 to 113,925 beds in 2020.

The Saudi Arabian healthcare market is forecasted to reach US$ 27.4 billion in 2020, registering a CAGR of 11.0% from 2015.The healthcare market in the UAE is projected at US$ 19.5 billion in 2020, indicating an annual average growth of 12.7% from 2015.

For more details please click here to access the complete version of the GCC Healthcare Industry Report.

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GCC Food Industry Report

GCC Insurance Industry Report

October 2015

Alpen Capital’s GCC Insurance industry report depicts the current scenario of the insurance industry across the GCC countries and major insurance segments, including life and non-life. The report also covers the recent trends, growth drivers, and challenges faced by the industry, in addition to presenting an outlook, in terms of premiums until 2020. It profiles some of the select insurance companies in the region, while evaluating their financial and valuation metrics.

Industry Outlook

The scale and growth of the insurance industry is strongly correlated with a country’s economy. The GDP of the GCC economies is strongly linked to oil prices. We have projected two possible scenarios for the growth of the GCC Insurance Industry based on the economic growth projection of IMF, growth in population and inflation levels.

As per our high growth scenario, the GCC insurance industry is expected to reach US$ 62.1 billion by 2020, registering compound annual growth rate (CAGR) of 18.7% for the period 2014-2020. IMF’s forecasted drop in the GDP of the GCC countries for 2015 and the volatility in oil prices are expected to result in lower growth in premiums for 2015. Between 2014 and 2020, IMF forecasts GDP growth in the region at a CAGR of 2.3%. Additionally, population growth is expected at a CAGR of 2.4% for the same period. The resulting improvement in insurance penetration and density levels (based on historical regression analysis) is likely to bring about growth in GCC insurance premiums for the period 2014-2020. Our conservative growth scenario, assuming that the GCC countries will average non-life premium growth in line with their preceding five years, results in the GCC insurance industry reaching a size of US$ 49.0 billion by 2020 at a 14.1% CAGR.

Growing at a CAGR of 20.2% between 2014 and 2020, the non-life insurance segment is likely to outperform the life insurance segment (CAGR of 5.9%), primarily due to its line of compulsory insurance products and encouraging regulatory reforms.

The insurance penetration in the GCC nations is expected to increase to 3.3% in 2020 from 1.4% in 2014. At the same time, insurance density is expected to more than double. In 2014, eight insurers in Saudi Arabia re-capitalized their balance sheet to comply with the regulatory requirements and fuel future growth, leading to an almost 14.0% increase in the Saudi Arabian insurance industry equity to US$ 2.7 billion. Saudi Arabia, the largest country in terms of population, is likely to overtake the UAE as the largest insurance market in the region and drive the growth of the GCC insurance industry between 2015 and 2020.

Qatar is one of the fastest growing markets and is likely to remain at the third position after the UAE and Saudi Arabia, with a market share forecast of around 10.0% between 2015 and 2020.

For more details please click here to access the complete version of the GCC Insurance Industry Report.

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GCC Food Industry Report

GCC Construction Industry Report

June 2015

Alpen Capital’s GCC Construction Industry report provides a perspective on the overall GCC construction industry, its market structure, and the key sub-segments of the construction market i.e. residential, office, retail, hospitality, healthcare, leisure and infrastructure, The report includes a discussion on the overall fundamental growth drivers, challenges, developments, and recent trends in the construction industry, along with the profiles of leading players in the region. The GCC construction industry foresees growth from 2015-2018, encouraged by factors such as favorable macroeconomics, higher government allocation, positive demographics, and rising tourism activities. Higher budget allocation towards construction sector, as part of the strategic vision of the member nations, lends an added push to the industry.

The GCC Construction Industry Outlook
  • In Saudi Arabia, efforts to boost religious tourism have translated into higher budget allocations towards the hospitality, retail, and infrastructure sectors. The need to create affordable housing options and the recent law allowing for mortgages are expected to result in an increase in construction activities in the near future.
  • Optimistic forecasts for the UAE's construction sector for the next few years is based on an economic recovery, safe-haven status, liberal investment climate, relatively advanced real estate regulatory framework, as well as a buoyant infrastructure project pipeline as part of the country’s strategic vision 2021.
  • The outlook for Qatar’s residential, hospitality, and infrastructure construction markets appears optimistic due to healthy population growth, mega events, and the economy picking up pace.
  • The construction industry in Oman is expected to remain robust driven by a significant increase in infrastructure projects planned by the government, tourism projects, an undersupplied residential market, as well as the construction of commercial space.
  • In Kuwait, the construction industry is set to thrive driven by the infrastructure sector, new projects from the private sector to address the need of affordable housing, and an increase in demand for commercial space.
  • Developing its infrastructure and reducing its affordable housing shortage remains the principal focus of the government of Bahrain in the coming years.

For more details please click here to access the complete version of the GCC Construction Industry Report.

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GCC Food Industry Report

GCC Food Industry Report

April 2015

The report presents the demand-supply dynamics of the GCC food industry across its countries and major food categories. The report also highlights the recent industry trends, growth drivers, and challenges in the industry. It profiles some of the leading food companies in the region while evaluating their financial and market valuation metrics vis-à-vis the regional as well as international industry performance.

The food demand in the GCC is driven by several factors including a growing population base, increasing affluence and rising tourist inflow within the region. High health awareness and a developing taste for a westernized diet, introduced by the increasing expatriate population, are bringing about a change in the region’s dietary habits, creating demand for organic and international foods. In contrast, the GCC’s food production is restricted due to its arid climate, less arable land, and water scarcity, making it heavily reliant on imports. However, the region’s abundant oil revenues have supported its food imports as well as enabled the governments to make multi-billion dollar investments towards improving the country’s food security.

The GCC Food Industry Outlook

The GCC food sector is expected to grow at a 3.5% CAGR between 2014 and 2019 to reach 51.9 million metric tonnes (MT), backed by encouraging macroeconomic drivers. Cereals are likely to remain the most consumed food category, accounting for 46.5% of the region’s total food consumption in 2019. However, rising consumption of high-priced protein-rich and healthy foods is expected to gradually eat into the share of cereals in the total food consumption. Subsequently, cereals consumption is expected to show an annualized growth of 3.0% between 2014 and 2019, slower compared to the 4.4% and 3.8% annual rise in meat and fruit consumption, respectively.

For more details please click here to access the complete version of the GCC Food Industry Report.

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GCC Retail Industry Report

GCC Retail Industry Report

January 2015

Detailing a comprehensive perspective on the retail industry, the report states major market characteristics and changing dynamics of the industry. The report examines the key sub-segments of the retail market by analyzing the fundamental growth drivers and significant challenges and developments. The comprehensive report also profiles some of the big names in the retail industry of countries in the region.

The retail industry continues to maintain a positive momentum attributed to key factors influencing the market like robust economic growth, rising purchasing power, growing population comprising a large proportion of expatriates, changing consumption patterns and increasing penetration of international retail players. Retail structure in the GCC region is undergoing significant transformation, driven by the social and economic developments that has resulted in an increase in modern retail formats such as hypermarkets and supermarkets. The Gulf is also gearing to host events such as World Expo 2020 and FIFA 2022, leading to a growing influx of tourists and creating immense opportunities for existing and new retailers in the region.

The GCC Retail Industry Outlook

The GCC retail industry is expected to grow at a 7.3% CAGR between 2013 and 2018 to reach US$ 284.5 billion. Alpen Capital’s report confirms that Saudi Arabia continues to hold the largest share in the region’s retail industry. Estimated at 46.4% of the region’s total retail sales in 2013, the country’s share in region’s retail sales is likely to increase to 47.1% in 2018. The UAE’s contribution to the total retail sales of the GCC is expected to decline from 26% to 24.6% during the forecast period.

For more details please click here to access the complete version of the GCC Retail Industry Report.

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GCC Aviation Industry Report

GCC Aviation Industry Report

March 2014

The GCC Aviation Industry Report provides a perspective of the GCC aviation sector by presenting the current industry status, key market dynamics, and scope for future growth. It examines the key sub-segments of the aviation market by identifying fundamental growth drivers, significant challenges, and recent trends. Based on reliable third-party estimates, the report also captures the outlook for the GCC’s aviation market. The report also profiles each of the six GCC nations as well as those of the region’s major aviation players.

GCC is emerging as a key aviation hub, which is being capitalised by regional airlines and promoting the overall growth of the aviation sector in the GCC region. The growth is also being fueled by strategic development across sectors like infrastructure, tourism, healthcare, education and sports facilities.

The GCC Aviation Industry Outlook

Alpen Capital in its report predicts that the growth in air passenger and air cargo traffic in the Middle East, between 2012 and 2032, is likely to outperform that across all other regions. Air passenger traffic in the Middle East, in terms of Revenue Passenger Kilometers (RPK), is expected to expand at a compounded annual growth rate (CAGR) of 6.7%, while air cargo traffic, in terms of Freight Tonne Kilometers (FTK), is expected to grow at a 7.2% CAGR.

Air passenger traffic on outbound routes from the Middle East is expected to outpace that on traditional routes such as Europe – Europe, Europe - North America, and North America – North America. Within the Middle East, air passenger traffic in the United Arab Emirates (UAE), Saudi Arabia, and Oman is expected to grow at a 6.6%, 6.9%, and 7.5% CAGR, respectively, between 2012 and 2017.

The Middle East aviation market is expected to receive the delivery of 2,610 aircraft between 2012 and 2032, valued at US$ 550 billion. As a result, the total fleet size in the region is expected to increase at a 4.7% CAGR during the period to reach 2850 aircraft in 2032.The business jet fleet size in the Middle East is projected to grow to 1420 from 400 between 2012 and 2032.The Middle East Maintenance, Repair, and Overhaul (MRO) market is expected to grow at an 8.6% CAGR between 2013 and 2022 to be valued at US$ 8.0 billion.

For more details please click here to access the complete version of the GCC Aviation Industry Report.

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GCC Healthcare Industry Report

GCC Healthcare Industry Report

April 2014

Alpen Capital’s GCC Healthcare Industry Report includes details on current market trends and challenges faced by the GCC Healthcare sector and the on-going initiatives by GCC authorities to address these issues. The report encompasses profiles of each GCC country and highlights the existing market scenario in the healthcare sector. Finally, the study covers profiles of major publicly-listed and private firms (including details about their performance and market position).

The GCC region is poised for an unprecedented surge in healthcare consumption driven by robust population growth and rising income levels. Higher income levels and sedentary life styles have led to poor health conditions, a phenomenon that has been witnessed in most developed economies. The governments, which play the predominant role in healthcare services, are taking steps to ensure continuous development of infrastructure through nurturing management skills, increasing the share of private sector and utilising IT skills to spread the reach and range of healthcare services.

We are bullish on the prospects of the healthcare industry in the region. On the demand side, rising affordability, lifestyle related diseases, the treatment of which is both costlier and lengthier, and increasing insurance penetration will ensure vigorous rise in healthcare spending in the GCC. On the supply side, the government is taking measures to ensure that the infrastructure is equipped to handle the increasing demand. The government is considering PPP models to bring efficiency while reducing financing burden, along with other measures such as e-health and m-health tools. There is dearth of highly qualified medical practitioners in the region and hence influx of foreign practitioners will continue to remain a trend. Private sector has limited presence in the industry at present but will play an important role in the time to come.

The GCC Healthcare Industry Outlook

According to Alpen Capital, the GCC healthcare market is projected to grow at an annual rate of 12.0% to US$ 69.4 billion by 2018 from an estimated US$ 39.4 billion in 2013. Outpatient and inpatient markets are expected to account for 79% and 21%, respectively, of the overall market size.

The demand for number of hospital beds is expected to be 115,544 in 2018, an addition of 11,241 beds from 2013, which is in line with the expected supply looking at the number of projects in the pipeline.

For more details please click here to access the complete version of the GCC Healthcare Industry Report.

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GCC Education Industry Report

GCC Education Industry Report

July 2014

The GCC Education Industry Report presents the growth prospects of the GCC education sector, based on the current developments within the sector, key market dynamics, and the existing investment opportunities in the region. The scope of the report encompasses the pre-primary, primary, secondary, tertiary, and vocational training segments across all GCC nations. Further, the report profiles the six GCC countries as well as some noteworthy private educational institutions in the sector.

The growth of the GCC education sector is driven by factors such as population growth, increasing number of expatriates, the rising importance of high-quality education in the society, and a growing spending propensity. The sector is gaining additional momentum from governments across the GCC that are acknowledging the need for an education system capable of producing industry-ready graduates. Thus, with increased focus on improving the quality and reach of education in the region, the sector presents an interesting investment opportunity.

According to the report, the total number of students in the GCC region is expected to grow at a 3% CAGR between 2013 and 2020 and the total number of schools is expected to rise at a 2.4% CAGR, concurrent with the increasing number of students in the GCC. The UAE is the most developed education market in the region and is an emerging education hub. The Saudi Arabian market is the largest, accounting for more than 75% of the gross enrolment within the GCC. Both the nations account for relatively mature K-12 and tertiary education segments. Following these leaders are the Qatari and the Omani markets, which are growing with support from planned education reforms. The education markets of Kuwait and Bahrain are growing at a modest pace.

For more details please click here to access the complete version of the GCC Education Industry Report.

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GCC Hospitality Industry Report

GCC Hospitality Industry Report

September 2014

The GCC Hospitality Industry report focuses on the key performance indicators of the GCC region’s hospitality industry, such as number of hotel rooms, ADR (average daily rate), occupancy rates, RevPAR (revenue per available room), growth rates, and the industry outlook over the next five years. The report evaluates the current demand and supply situation, growth dynamics, future prospects as well as the challenges faced by the GCC hospitality industry.

The GCC economies are well on their way to recovery from the global economic crisis. With the recent wins in mega events like the Qatar FIFA World Cup 2022 and the Dubai World Expo 2020, the region is gearing up for an increase in tourist arrivals. Due to the forecasted increase in demand, the sector is going through capacity expansion as well as increasing investment into infrastructure. The industry is expected to sustain this growth momentum supported by the regional governments’ initiatives to grow the sector, international tourist arrivals, especially those from the Asian region, and growth in the MICE segment among other factors.

The GCC hospitality industry is expected to grow at an annual rate of 9.5% to US$ 35.9 billion by 2018 compared to the US$ 22.8 billion in 2013. Average occupancy rates are likely to be in the range of 68% and 74% between 2013 and 2018 while ADR is likely to average between US$ 225 and US$ 263 during the same period. Saudi Arabia is expected to continue its dominance as the largest market in terms of revenues, followed by the UAE. Upcoming mega events in Qatar and UAE are expected to be the key growth drivers for the hospitality industry in these countries.

For more details please click here to access the GCC Hospitality Industry online.

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GCC Investment Destination

GCC Investment Destination - Opportunities for Indian companies

The research paper titled GCC as an investment destination - Opportunities for Indian companies explores the favourable characteristics of the GCC and the opportunities it presents to Indian investors.

The GCC offers distinctive advantages for overseas investors. GCC’s investor friendly economic environment, geographical proximity and inherent advantages in energy-intensive manufacturing hold tremendous potential for attracting further investments from Indian industries and strengthened its position as a manufacturing and re-export hub. The reforms and initiatives undertaken by the GCC governments in diversifying their economies by promoting growth of non-oil sectors have also created several investment opportunities in the region.

Investment prospects in GCC

While the oil industry is undeniably a pillar for the GCC economies, the region’s priority is to achieve sustained economic growth through development of non-oil sectors. This can be achieved by increasing private sector participation, strengthening local technological capabilities, developing a skilled workforce, improving the competitiveness of exports in global markets and by attracting substantial overseas investments. GCC offers strategic advantages, such as availability of cheap energy and feedstock supply, low tax environment, well-developed infrastructure, growing population and increasing income levels, conducive for the development of various industries in the region. All these advantages if properly showcased could attract substantial investment flows from Indian corporates, who are looking to expand their global footprint and scouting for distinctive cost advantages to remain globally competitive.

Sector opportunities

Continued government spending to boost competitiveness, self-reliance and developing local skilled work force would offer potential investment opportunities in sectors such as Petrochemicals, fertilisers, plastics, pharmaceutical, sugar refining, Aluminium & Steel. In addition government support and infrastructure is expected to grow in sectors such as Information & Communication technology (ICT) and Agriculture, Food processing, Education, Financial Services and EPC.

For more details please click here to access the GCC investment Destination Report online.

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GCC Pharmaceutical Industry Report

GCC Pharmaceutical Industry Report

March 2013

Alpen Capital’s GCC Pharmaceutical sector report assesses growth potential of the Pharmaceutical industry by examining a variety of driving forces, along with the noteworthy trends and key challenges. The report also provides a long-term industry outlook and proposes recommendations that could help attract higher foreign investments, bring regional drug prices closer to the world average, and aid the overall market growth.

The GCC pharmaceutical industry is expected to experience sustainable growth in the medium to long term. Increased domestic production, foreign investments, and consumption of generics are likely to support the market’s evolution. These factors are supported by growth drivers such as population growth, increasing life expectancy and growing income levels which will further enhance the expansion of the sector.

Industry Outlook

The GCC pharmaceutical sector has witnessed considerable progress over the years on the back of favorable demographic and economic factors, alongside strong government support for healthcare Expansion of pharmaceutical sales in Qatar and Bahrain is projected to outpace the overall regional growth rate, thus translating into a higher market share of these countries at the regional level going forward. The remaining Gulf countries are forecast to either maintain a stable share or experience a decline in their representation in the GCC pharmaceutical industry. Nevertheless, Saudi Arabia is expected to maintain its position as the largest pharmaceutical market within the Gulf in the foreseeable future. The UAE is also likely to retain its ranking as the second largest pharmaceutical market.

For more details please click here to access the complete version of the GCC Pharmaceutical Industry Report.

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GCC Food Industry Report

GCC Food Industry Report

May 2013

Alpen Capital today announced the publication of its GCC Food Industry Report which focuses on production, import and consumption volumes of key food segments and their growth potential. It analyses the growth drivers, trends and future prospects for the sector, shedding light on the challenges that could impact the sector's profitability and growth in the future.

Alpen Capital´s latest report on the GCC Food Industry estimates that the per capita food consumption in the region will expand at a CAGR of 3.1% over 2012-17, reaching 49.1 million metric tonnes by the end of 2017. This increase is attributed to the rapidly growing population in the GCC, increase in foreign tourists as well as the rising income levels of the region.

For more details please click here to access the complete version of the GCC Food Industry Report May 2013.

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GCC Insurance Industry Report

GCC Insurance Industry Report

July 2013

Alpen Capital´s research report on the GCC Insurance Sector assesses the current market scenario in all GCC countries in order to understand demand-supply dynamics, growth drivers and future outlook and analyzes the performance of the industry players.

The insurance industry in the Gulf Cooperation Council (GCC) has experienced steady growth on the back of economic development, population expansion, improved regulatory environment, and increased product awareness. The region´s insurance sector is also expected to structurally mature going forward, in line with positive regulatory developments and efforts by some players towards attaining greater operational scale and efficiency.

Industry Outlook

Alpen Capital estimates that the Insurance industry in the GCC is projected to expand at a compounded annual growth rate (CAGR) of 18.1% between 2012 and 2017 to reach a size of US$ 37.5 billion, split between life (US$ 2.4 billion) and non-life (US$ 35.1 billion) segments.

The life insurance segment is expected to grow at an annual average rate of around 2% during this period. However, the non-life segment is forecast to expand at a much higher rate of 20.0% annually, thus increasing its share in the regional market from 86.6% in 2012 to 93.6% in 2017.

The insurance penetration in the GCC is expected to improve from 1.1% in 2012 to 2.0% in 2017 , as industry growth comfortably exceeds the pace of GDP expansion. Non-life insurance penetration, which is likely to surge from 0.9% to 1.9% during the period, is seen as the main driving factor.

By 2017, insurance density in the Gulf is anticipated to more than double from the 2012 level as increased number of people and businesses avail insurance cover. Industry-wide density is likely to increase from US$ 367.3 in 2012 to US$ 751.4 in 2017. However, the gap between density in the life insurance and non-life segments is projected to widen substantially, going forward.

United Arab Emirates (UAE) and Saudi Arabia remain the largest insurance markets in the GCC while Saudi Arabia may surpass the United Arab Emirates (UAE) as the largest insurance market in the region going forward. The Saudi insurance industry is seen as a major driver behind growth of the GCC insurance industry as it is anticipated to expand at a CAGR of 26.5% between 2012 and 2017.

For more details please click here to access the complete version of the GCC Insurance Industry Report July 2013.

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GCC as an investment destination

GCC as an investment destination

November 2013

Alpen Capital announces the publication of its fourth industry report for the year highlighting the favourable factors that make GCC an ideal investment destination for Indian investors. As Alpen Capital focuses on business opportunities that exist between the GCC–India corridor, the report outlines several characteristics of the region that makes it attractive to Indian companies.

According to the report, GCC offers strategic advantages, such as availability of cheap energy and feedstock supply, low tax environment, well-developed infrastructure, growing population and increasing income levels, conducive for the development of various industries in the region. All these advantages if properly showcased could attract substantial investment flows from Indian corporates, who are looking to expand their global footprints and scouting for distinctive cost advantages to remain globally competitive.

The report also includes quotes from Indian conglomerates who have established a presence in the GCC as well as companies in GCC who are looking to India as an investment destination.

For more details please click here to access the research paper.

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GCC Construction Industry Report

GCC Construction Industry Report

March 2012

Alpen Capital’s GCC Construction Industry report focuses on key emerging trends, fundamental growth drivers, noteworthy challenges in the industry, and profiles of six GCC nations while presenting the outlook for residential and commercial office construction sector based on a supply-side approach.

Though the construction and real estate sector has started recovering from the lows of 2008-2009, growth is still far from pre-crisis levels. The growth is also not uniform across all regions within the GCC and while some countries are leading the recovery; others continue to take a more careful approach. Prospects in the Qatari construction market are looking optimistic on the back of strong GDP growth and the successful bid for the 2022 FIFA World Cup. In Bahrain and Saudi Arabia, the focus of the residential construction sector has shifted to providing affordable homes to the low and middle income group population. UAE’s reputation as a safe and stable country amid the recent ‘Arab Spring’ is likely to have a positive impact on the construction sector despite the current oversupply and cautious approach to new investments.

GCC region continues to enjoy premium on rental yields as compared to the mature markets of the US and Europe, which will keep the overseas investor’s interest intact in the sector. Due to low number of transactions taking place in the marketplace, the determination of the price ranges is a challenging task, thereby making this a buyer’s market. We foresee continuation of this phase in near to mid-term.

For more details please click here to access the complete version of the GCC Construction Industry Report.

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Trade and Capital Flows - GCC and India

Trade and Capital Flows - GCC and India

May 2012

Alpen Capital's research paper - Trade and Capital Inflows between GCC and India analyses the development of bilateral trade (both merchandise and services) and investment capital flows over the last 10 years, thereby highlighting key attributes that have helped foster stronger economic cooperation between the two economies. It also covers the future growth potential of trade and capital flows between the two regions.

Economic relations between India and the GCC date back to several centuries. However, the two-way trade between the two regions has strengthened over the last decade. This is particularly due to the substantial economic power attained by these regions on the global map following the spectacular economic growth since 2003.FDI investment from GCC to India has picked up pace in the recent years but remains negligible relative to trade flows in terms of magnitude. It also represents just a small percentage of total FDI from GCC countries to the world.

With the economic forecasts pointing to strong GDP growth in both the economies, we emphasize that there is an ample scope of strengthening economic ties between GCC and India. While the GCC needs to promote more industrialization and SME participation in order to realize its diversification dream and create jobs for its rapidly expanding population, India needs to further improve its basic infrastructure and reduce complexity in the regulatory practices. We recommend GCC investors to further diversify their investment portfolio by taking positions in the promising Indian investment avenues as the return on investment remain relatively robust. At the same time, due to its locational advantage and abundance of natural resources, GCC has the potential to serve as a manufacturing base as well as an export hub for Indian companies.

For more details please click here to access the research paper.

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GCC Education Industry Report

GCC Education Industry Report

June 2012

All segments of the GCC education sector is poised for consistent growth in the future driven by increased private sector participation, growing focus on quality education, and strategic plans of various governments in the region to improve the education system through reform programs. We expect the higher education segment to witness significant private investment in the long-term, which will result in more private institutions opening across the GCC region. This will also have an impact on improving the higher education standards in the region and help meet the ever growing demand for this segment.

Industry outlook

Alpen Capital in its GCC Education industry report expects the total number of students in the GCC region to grow from an estimated 10.2 million in 2011 to 11.6 million in 2016, registering a CAGR of 2.7%. Total number of students in the pre-primary and tertiary segments is expected to outpace the growth rate of schooling (primary and secondary) segment, witnessing a CAGR of 11.2% and 4.8% respectively during the period. The share of students in the pre-primary segment is expected to increase from 5.3% in 2011 to 7.9% in 2016, while the share of tertiary students is expected to rise from 12.0% to 13.4% during the same period. Growth in the total students in the region is primarily attributed to the increasing population in the region.

Higher demand for education will also propel growth in the number of schools in the region. By 2016, the region is likely to have a total of 51,450 schools; out of which 20.6% will be private schools.

Alpen Capital also forsees that the number of higher educational institutes across the GCC region will rise mainly on the back of rising enrolment rates in the GCC member countries.

For more details please click here to access the complete version of the GCC Education Industry Report.

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GCC Hospitality Industry Report

GCC Hospitality Industry Report

October 2012

The GCC hospitality sector is poised for a healthy growth owing to factors such as favourable economic conditions combined with infrastructure development, increased bids to host high profile global events and government support to the private sector. All these factors have contributed to the steady increase in tourist arrivals which in turn has facilitated the growth of the hospitality industry in the region.

The GCC hospitality industry has been high on the investment radar of businesses given the macroeconomic trends and the rise in business/ leisure visitors to the region. The industry has strong fundamentals and is beginning to realize its potential. Accordingly, we believe that the industry presents itself as an excellent opportunity for all stakeholders.

Industry Outlook

Alpen Capital in its GCC Hospitality industry report estimates that the GCC hospitality market is anticipated to grow at an annual rate of 8.1% to USD28.3 billion by 2016 compared to USD19.2 billion in 2011.

Occupancy rates are expected to average around 67-73% between 2012 and 2016. As business and leisure tourism continues to grow and the up-scale hotel segment account for most of the demand for hotels, ADR is likely to average around USD212-USD247 between 2012 and 2016. Saudi Arabia is expected to remain the largest GCC market in terms of revenues, followed by the UAE. Qatar is expected to be one of the fastest growing market, driven by rising business tourism and leisure tourism as the country prepares itself for the FIFA World Cup 2022, and in order to achieve its 2030 national vision.

For more details please click here to access the complete version of the GCC Hospitality Industry Report.

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GCC Retail Industry Report

GCC Retail Industry Report

December 2012

Retail industry, which is one of the fastest growing sectors in the GCC has thrived over the last several years due to increasing purchasing power, growing expatriate population, changing lifestyle and an expanding tourism & hospitality industry. Retailers have benefited from the government initiatives and progressive policy agenda and have a healthy period of growth ahead of them.

Industry Outlook

According to Alpen Capital, between 2011 and 2016, the GCC´s retail sales are expected to grow at a CAGR of 7.7% to reach US$ 270.3 billion by the end of the forecast period. Food retail sales are anticipated to expand at a CAGR of 8.8% during this period while non-food retail sales are likely to grow at an annual average growth rate of 6.6%. Food sales growth will outperform non-food sales growth during the forecast period as high-value and healthier food products could find greater demand.

Sales of supermarkets and hypermarkets in the GCC are expected to grow at an annual average rate of 10.5% between 2011 and 2016. The relatively under-penetrated markets in terms of modern grocery retail formats like Saudi Arabia, Qatar and Kuwait are likely to outperform the mature UAE market.

Duty free and travel retail sales in the Middle East are forecasted to grow at a CAGR of 11.6% from 2011 to 2016, outperforming the broader retail industry in terms of growth. Although the growth of the luxury segment may be moderate in 2012 due to the global economic uncertainty and high base effect, outlook for the segment remains positive.

The region´s retail sector has displayed strong resilience in the face of global economic downturn and is expected to continue to grow at a steady pace given its attractiveness to tourists and residents, geographic location, developed logistics and availability of diverse shopping options. While the sector presents attractive opportunities, it is highly competitive and retailers need to continue to innovate so that they can achieve sustainable growth and profitability.

For more details please click here to access the complete version of the GCC Retail Industry Report.

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GCC Hospitality Industry Report

GCC Hospitality Industry Report

April 2011

Alpen Capital´s latest report on the GCC Hospitality Industry estimates that room revenues for the GCC hotel industry are growing at a rate of 11% from 2010. Saudi Arabia and UAE are the two biggest markets in the region with 89% share jointly.

The report also projects optimistic and pessimistic scenarios for the room revenues based on different levels of room supply and tourist arrivals and estimating that the GCC Hospitality Industry performance will stabilize at around US$ 173 during this period & average daily rate (ADR) for the region will firm up to US$ 257, while the occupancy rates will be around 67% for the same period.

The GCC Hospitality industry is currently trading at a P/E of 15x average which makes it very attractive in comparison to its global peers.

There are several factors boosting the outlook of the GCC Hospitality Industry wherein the supply side factors include, the total number of rooms expected to be added in the next four to five years and those under development & the demand estimate is based on forecasts of increase in tourist arrivals and leisure & business spending for international and regional visitors.

Secondly, the GCC region has had continued economic growth and a healthy GDP projected for the future from which the Hospitality industry will benefit as its strategic location makes it attractive to tourists from UK, Europe and the GCC itself.

The emerging sports & events based tourism as well as niche tourism offerings such as cultural & heritage tourism, and diving and wild-life oriented tourism is helping in promoting the industry.

One of the main challenges impacting the industry is the wave of political unrest and uncertainty across parts of the GCC region as well as the larger MENA region, which may negatively impact tourist arrivals. Despite these factors, the outlook for the GCC Hospitality industry remains positive for 2011 – 2015 due to the strong growth drivers.

For more details please click here to access the complete version of the GCC Hospitality Industry report.

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GCC Food Industry Report

GCC Food Industry Report

June 2011

Alpen Capital´s latest report on the GCC Food Industry estimates that the per capita food consumption in the region will expand at a CAGR of 2.1% over 2011-15 (as against an estimated CAGR of 0.9% over 2007-10), mainly due to rising incomes in the region. Overall food consumption too will grow at a faster pace than it did over the last three years, owing to the rising incomes as well as fast growing population in the region. It is expected to expand at a CAGR of 4.6% over 2011–15 to 51.5 million metric tonnes in 2015 (as against an estimated CAGR of 4.1% over 2007-10).

The report also expects the consumption of high-value and protein-rich products (meat), fruits, vegetables and other food products (sugar, oil, fish/eggs) to grow at a higher rate compared to that of staples such as cereals. This development is in line with global trends. While per capita cereal consumption is expected to decrease progressively across all countries; cereals will remain the leading segment, by volume. The consumption of milk is also likely to increase considering that the per capita consumption is low in the region compared to that in developed countries.

For more details please click here to access the complete version of the GCC Food Industry Report June 2011.

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GCC Insurance Industry Report

GCC Insurance Industry Report

August 2011

Alpen Capital’s GCC Industry report assesses the current market scenario in all GCC countries in order to understand demand-supply dynamics, growth drivers and future outlook and analyzes the performance of the industry players.

Industry Outlook

Insurance industry in the GCC has not been immune to the financial crisis. The accelerated pace prior to 2007 hit the speed breaker as oil prices troughed on receding global activity and tightening credit markets. While the sector has been resilient, and has registered a modest growth when most other markets were in the red, the pace of growth has shifted to a lower gear. As the region recovers from the downturn, diversified economic growth of the GCC countries, supportive government regulations and favorable demographics are creating an environment that is conducive for growth. We expect the sector to see higher levels of growth during the period 2011 - 2015.

The GCC insurance industry is relatively small with significantly low levels of insurance penetration and density. While this points to the size of the growth opportunity, GCC insurers continue to face a number of challenges. The region has very high cession rates showing a high dependence on reinsurers. At the same time, the investment portfolios of the insurance companies are heavily tilted towards equities, making them vulnerable in a volatile market.

Alpen Capital estimates that the Insurance industry in the GCC to be approximately USD 18 billion in 2011 and will rise to USD 37 billion in 2015 registering a CAGR of 20%. While UAE and Saudi Arabia are the two biggest markets in the region with a 75%(2015) combined share, while Qatar is expected to register the fastest growth at a CAGR of 30% from 2011-15.The report also expects the non-life segments to continue to comprise approximately 86% of total premiums in 2015.

Most GCC countries are experiencing rebounding economic activity. The region continues to diversify away from hydrocarbon dependence and have invested across varied sectors. The diversification has given way for robust growth in non-life insurance segment. With substantial projects underway in multiple sectors, the demand for financial services, especially insurance, is expected to rise steadily in the coming years. Non-life premium penetration is expected to increase from 1.12% in 2011 to 1.81% in 2015.

In addition, increasing growth of Takaful will provide a strong impetus to the Insurance Sector. Takaful, which is Sharia compliant, has significant appeal amongst the local population in the region.

Key Growth drivers

Increasing GDP remains the primary growth driver for the insurance sector. Life insurance will also gain momentum with rising population and increasing per capita income. In addition, as GCC countries continue to diversify and develop new sectors, this will bring in new projects which will increase the demand for non- life insurance. Another growth driver for the sector is the introduction of compulsory health, third party motor and home insurance which has resulted in significant premium growth in the non-life insurance segment.

For more details please click here to access the complete version of the GCC Insurance Industry Report.

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GCC Retail Industry Report

GCC Retail Industry Report

November 2011

Alpen Capital's GCC Retails Industry report provides a perspective of the retail sector in the GCC by examining the current industry status and size, key market dynamics, and scope for growth in the future. In addition, it includes profiles of the six GCC nations identifying country-specific macroeconomic attributes, drivers for retail growth, and recent industry developments.

Industry Outlook

Alpen Capital´s GCC Retail Industry report expects retail sales in the GCC to grow at a CAGR of 8.3% between 2010-2015, reaching US$ 240.3 billion by the end of the forecast period. Growing per capita GDP and disposable income, expanding population base and consistent inflow of tourists will boost the region's retail sector going forward.

Retail sales of supermarkets and hypermarkets in the GCC are estimated to expand at a CAGR of 10.7% between 2010 and 2015, thus outpacing the broader retail industry.

Most GCC countries are experiencing rebounding economic activity. The region continues to diversify away from hydrocarbon dependence and have invested across varied sectors. The diversification has given way for robust growth in non-life insurance segment. With substantial projects underway in multiple sectors, the demand for financial services, especially insurance, is expected to rise steadily in the coming years. Non-life premium penetration is expected to increase from 1.12% in 2011 to 1.81% in 2015.

Middle East duty free and travel retail sales are projected to expand at a CAGR of 9.9% between 2010 and 2015. The Middle East luxury goods market looks poised for strong performance going forward. The region´s luxury goods sector is estimated to expand at a CAGR of 8.5% within the same period.

Having contributed substantially to overall retail sales expansion, the mid-market segment has broadly tracked the overall retail industry growth trajectory and is expected to continue on a similar trend going forward.

Key Growth drivers

There are several factors that are contributing to the growth of the retail sector. Largely urbanized consumer class with a young age profile is likely to drive demand in the retail market. The number of high net-worth individuals in the Middle East increased 10.4% y-o-y in 2010, while their financial wealth increased 12.5% during the same period. The number of individuals in the GCC with more than US$ 50,000 in onshore liquid assets is expected to increase and this will also contribute to the growth of the retail industry.

The region has seen substantial investments in the development of world class infrastructure, tourism, and hospitality sectors. Saudi Arabia is expected to see 9.3 million new visitors between 2011 and 2015, while there will be approximately 3.6 million new arrivals in the United Arab Emirates (UAE) during this period. There are a growing number of tourists from China and India and Chinese travelers have increased their total spending in the UAE by 155% y-o-y. in 2010. Various retail categories including the luxury segment are witnessing a robust demand from Chinese tourists.

Strategic geographic location and government focus on attracting tourists have given a massive boost to the growth of passenger traffic in the GCC. Apart from overnight tourist arrivals, the region´s airports are also witnessing a significant inflow of international transit passengers, making airport retail a flourishing business. Dubai Duty Free is already the single largest airport retailer in the world and Qatar Duty Free has also shown a very high growth rate.

Online retail is a relatively new concept in the GCC retail market however, online sales in the Middle East have registered a significant growth, and are believed to hold a strong potential in the future. We expect the GCC retail sector to continue its pace of growth leading to diversification and sustained economic development in the region.

For more details please click here to access the complete version of the GCC Retail Industry Report.

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GCC Healthcare Industry Report

GCC Healthcare Industry Report

December 2011

Alpen Capital´s GCC Healthcare report encompasses profiles of each GCC country and highlights the existing market scenario in the healthcare sector. In addition, the study covers profiles of major publicly-listed and private firms including details about their performance and market position.

The GCC Healthcare Industry Outlook

According to Alpen Capital, the GCC healthcare market is projected to grow at an annual rate of 11% to USD43.9 billion by 2015 from an estimated USD25.6 billion in 2010. Outpatient and inpatient markets are expected to account for 82% and 18%, respectively, of the overall market size. Saudi Arabia is projected to be the fastest growing market along with the UAE.

The demand for number of hospital beds is expected to be 93,992 in 2015, an addition of 8,669 beds from 2010, which is in line with the expected supply looking at the number of projects in the pipeline. The number of beds remain in line with the current GCC average and below the US and European averages. The gradual improvement of healthcare infrastructure and standards in the GCC along with increasing insurance penetration should see an increase in number of patients opting for treatments locally, thus seeing an increase in demand for hospital beds.

For more details please click here to access the complete version of the GCC Healthcare Industry Report 2011.

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GCC Takaful Industry Report

GCC Takaful Industry Report

January 2010

The GCC Takaful industry report focuses on the opportunities and challenges for growth of the Takaful industry, industry trends, financial performance, valuations, stock liquidity and governance & transparency. The report covers eight of the largest GCC Takaful firms as well as comparative statistics on GCC conventional insurance companies and an international peer group.

Takaful Industry : Growth Potential

The GCC Takaful industry is bucking the trend in the broader economy and continues to growth at a healthy pace.

While there are reasons to remain cautious about economic growth in the near term, we expect the Takaful industry to continue to grow faster than GDP (non-oil) for the foreseeable future. The key factors underpinning the growth potential are regulation, favorable demographics, growing affluence, growth in organized savings and Islamic finance, greater availability of Takaful and Islamic finance products and changing consumer habits. Despite Muslims constituting approximately one quarter of the world population, Takaful contributions account for less than half a percent of total insurance premiums.

The key challenge for the industry is to improve efficiency and reach critical mass. The largest GCC Takaful firms are doing precisely that. In the period from 2006 to the third quarter of 2009, they registered CAGR of 26.5% compared to 19.2% for their conventional peers. Consequently, the average combined ratio of the top GCC Takaful firms fell below 90% for the first time in 2009 - a good level by international standards, but still below the local conventional comparable in the 70% range. The Takaful firms recorded good profitability with an average return on equity of 16.1% in the first nine months of 2009, compared to 21.1% for their conventional peers.

The trend is for the conventional insurers to retain a larger portion of risk, while we see the opposite trend in Takaful. We think this is a sign of the Takaful players increasingly moving into more complex risk categories that requires reinsurance, but could also signal lesser constraint in Re-Takaful capacity.

For more details please click here to access the complete version of the Takaful Industry report.

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Gulf Petrochemicals Industry Report

Gulf Petrochemicals Industry Report

March 2010

The global petrochemical industry is facing an avalanche of new production capacity, largely owing to cost-advantageous feedstock. Alpen Capital estimates additional ethylene and polyethylene production capacity of about 32 million metric tons (mmt) and 23 mmt respectively over the next six years from 139 mmt and 90 mmt in 2009. The supply demand mismatch is expected to worsen in the short run, but gradually improve as the global economy recovers and more downstream projects come on-stream.

The majority of the world´s petrochemical capacity growth is concentrated in the Gulf, which now accounts for around 10% of global supply. The region has natural competitive advantages in access to cheap feedstock and being located relatively close to demand-dense Asian countries.

According to Alpen Capital, the GCC healthcare service sector will witness major improvements in the quality of services provided and in competitiveness on a global scale. The region’s endeavors in setting up integrated healthcare facilities in the form of healthcare cities and medical hubs, coupled with continuous improvement in technology and infrastructure, will significantly improve the availability and quality of healthcare services in the region.

2009 was defined as a year of recovery, when petrochemicals prices moved up from the cyclical trough of 2008. The price trend has also been encouraging over the past quarter. The price trend in 2010 will be a function of downstream sector growth, global economic recovery and new supply initiatives overcoming feedstock, technical and human skill-set constraints.

For more details please click here to access the complete version of the Gulf Petrochemicals Industry Report.

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GCC Retail Industry Report

GCC Retail Industry Report

May 2010

The retail sector is leading from the front in the regions ambition to move away from oil dependency towards a diversified economy. The industry is buoyed by factors such as healthy population growth, rising per capita income, growing middle class, enhanced service sector and a burgeoning travel and tourism sector. Moreover, the modern shopping malls anchoring state-of-the-art hypermarkets, highly developed free trade zones, various shopping festivals/events and favorable taxation provide further growth impetus to the sector.

Currently, retail mall projects of about 6 million square meters of Gross Leasable Area (GLA) are underway scheduled for completion by 2012. The race for more retail space in the GCC is not restricted to local participants; many foreign retailers have initiated retail operation in the region to leverage on the substantial growth prospects.

The rising GLA in the retail space is expected to be matched by demand growth in the sector. Alpen Capital estimates GCC retail demand growth at a CAGR of 9.5% in 2010-12. For 2010, the report projects the industry growth of around 8.3%. Growing population (CAGR of 2.9% until 2012) and rising per capita expenditure (CAGR of 5.6% until 2012) are key underlying reasons for this demand growth. Moreover, Alpen Capital expects robust growth in retail demand from travellers in transit (airport retail) and tourists. Pharmacy and electronic sales, although small in terms of contribution to the total retail scale, are also posting signs of healthy progression.

Non-discretionary retail segment to lead growth frontier

Alpen Capital expects the non-discretionary retail segment to continue to register healthy growth momentum in 2010 while the luxury discretionary segment is likely to remain subdued. The report expects revival in demand generated from tourists and passengers in transit to provide a further boost to retail sales in 2010.

Retailers with focus on non-discretionary goods will continue to outperform in the short term while those promoting discretionary products, large ticket items in particular, may face challenging market conditions for a while still. However, over a medium to longer term horizon, Alpen Capital foresees investment merit also in more cyclical discretionary goods segments.

Growth in retail space to match growth in demand

Assuming that the occupancy rate of 60% for the incremental organized retail space in the GCC region in 2010, 65% in 2011 and 70% by 2012, Alpen Capital's moderate growth scenario projects that the GCC occupied retail space would grow at a CAGR of 9.9% in 2010-12, in-line with its demand side estimate.

For more details please click here to access the complete version of the GCC Retail Industry Report 2010.

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GCC Education Industry Report

GCC Education Industry Report

September 2010

The GCC education sector is on a growth trajectory. The governments in the region display political will and strong intent to create infrastructure and promote innovation. The governments have initiated various policies and regulations to attract higher private sector participation. The GCC countries´ increasing collaboration with foreign universities and institutes to open branches in the GCC region has also significantly impacted efforts to improve higher education. The growing need for quality education and commitment by the governments throws up a number of investment opportunities within this sector. The report highlights that a rising population, coupled with growing number of expatriates, is expected to drive education demand in the GCC region. Raised standard of living in the GCC countries due to increasing urbanisation and rise in income levels have also influenced the attitude of people towards education, leading to improvement in gross enrolment ratios across primary and secondary level in the member countries.

Alpen Capital expects the total students in GCC region to grow at a CAGR of 1.8% during 2010 to 2020 to reach 11.3 million in 2020 from 9.5 million in 2010. Number of tertiary students is expected to grow at a highest CAGR of 5.5%.The share of tertiary education students is expected to rise from 11% in 2010 to 15% in 2020, while primary education share would decline from 46% to 43% during the same period. Private enrolment share is also estimated to rise from 16% in 2010 to 19% in 2020 in primary and secondary education segment.

Increase in student population is expected to drive demand for more schools in the region. Total schools are expected to grow at a CAGR of 1.2% during 2010 to 2020. Alpen Capital expects private schools growth rate to outpace that of public schools. The number of private schools in the region is estimated to increase at a CAGR of 3.2% during 2010 to 2020, while public schools are projected to grow at a significantly lower rate of 0.9% during the same period. The report estimates that by 2020, 6,200 additional schools would be required to meet growing demand.

The report highlights that the requirement for teachers in the Education sector would be around 163,200 by 2020, compared to the 2010 level. As the education participation increases in the region, the tertiary education awareness will increase from 6% in 2010 to 12% in 2020. While 74% demand is expected to be generated from Saudi Arabia, UAE and Oman each account for 11% during the period.

Although the education sector is geared for growth, the report throws light on a few challenges that are likely to be faced by the sector. Currently, the private sector participation is low in education sector. The quality of education still lags behind developed economies, resulting in many students opting to go overseas for higher education. Also, education sector is one of the capital intensive industries with high turnaround time, which acts as a barrier for many investors looking for a quick turnaround. This rising unemployment coupled with preference for government sector job is a challenge for GCC education sector. The GCC countries also lag in absorbing high-skilled labour, thus dis-incentivizing the education attainment levels. However as new government policies are implemented to accelerate the private sector participation and help keep pace with increasing demand in the region, Alpen Capital believes that the GCC education service sector will witness a major transition in the quality of services provided and in competitiveness on the global basis.

For more details please click here to access the complete version of the GCC Education Industry Report.

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GCC Pharmaceuticals Industry Report

GCC Pharmaceuticals Industry Report

December 2010

Alpen Capital expects pharmaceuticals sales in the GCC to grow at a CAGR of 7% to US$ 10.8 billion in 2020 from US$ 5.6 billion in 2010. This growth is driven by favourable demographics such as high life expectancy and sharp population growth, increase in healthcare awareness, increasing incidence of lifestyle diseases, conducive government policies and mandatory medical insurance for employees.

Alpen Capital expects the total students in GCC region to grow at a CAGR of 1.8% during 2010 to 2020 to reach 11.3 million in 2020 from 9.5 million in 2010. Number of tertiary students is expected to grow at a highest CAGR of 5.5%.The share of tertiary education students is expected to rise from 11% in 2010 to 15% in 2020, while primary education share would decline from 46% to 43% during the same period. Private enrolment share is also estimated to rise from 16% in 2010 to 19% in 2020 in primary and secondary education segment.

While the healthcare expenditure is expected to rise, as the sector matures, pharmaceuticals sales as a percentage of healthcare expenditure in the region are expected to decline and eventually reach that of the developed nations. Alpen Capital estimates the ratio to fall from 14.3% in 2010 to 12.4% in 2020.

Industry Trends

There will be a shift in the drug consumption pattern due to the shift in the disease prevalence rate. Urbanization and rising per capita income have led to the consumption of unbalanced diets and a more sedentary lifestyle in the GCC, thereby aggravating the prevalence of lifestyle ailments such as diabetes and cardiovascular diseases. The average treatment cost in the case of lifestyle-related ailments is higher than treating communicable diseases. This will impact the pharmaceutical industry and lead to higher per capital healthcare costs.

The GCC region imports most of its pharmaceutical products and patented drugs dominate the market, with generic drugs accounting for just 5-6%. Most of the GCC manufacturing plants are focused mainly on production of generic drugs and face difficulties in competing with foreign multinationals importing branded pharmaceuticals products.

Challenges

As local manufacturing is limited, it not enough to meet the growing demand and this creates a strong need for private sector participation; making the GCC pharmaceuticals sector an attractive investment destination. The governments of GCC countries are planning to raise their domestic production via investments in the pharmaceutical industry and adaptation to liberal trade policies and international healthcare standards. Moreover, the private pharmaceuticals sector in the region, which tends to favour branded pharmaceuticals, is marked by tight price controls.

Although plenty of opportunities exist for the pharmaceuticals sector in the GCC, they are punctuated by a few challenges. These include high dependence on imports, growth barriers for OTC medicines and high & uneven price distribution of drugs across GCC countries.

Although the sector is still in a nascent stage compared with international standards, it is undergoing a massive change through reforms, simplified government regulations, and upgradation and expansion of healthcare infrastructure. Alpen Capital believes that the GCC pharmaceutical sector will witness a major transition in the coming years and will provide interesting investment opportunities.

For more details please click here to access the complete version of the GCC Pharmaceuticals Industry Report.

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GCC Cement Industry Report

GCC Cement Industry Report

January 2009

Despite the cloud hanging over the GCC real estate and construction sectors, the report highlights that the regional cement sector offers favorable long term investment opportunities. Notably, GCC cement producers are expected to add around 50 million metric tons of additional capacity over the next three years. The cement supply-demand forecast of the report also suggests that the market will move from a production deficit in 2008 to a broadly balanced market in near term, but back to a deficit over the medium to long term. Therefore, 2009 could be a good time to enter the sector. Relatively strong volume and earnings growth and attractive dividend yields should support valuations over the long term.

However, there has been a sharp drop in revenue and earnings growth in the last three quarters of 2008. Revenue and earnings growth are expected to moderate from a very high level as weakening demand and liquidity constraints force many developers to slow down the pace of new developments.

Some of the key industry trends identified and discussed in the report includes rising local clinker production, falling energy prices, production-consumption gap, rising imports, alternative energy sources, increased plant size, weaknesses in transparency, etc.

For more details please click here to access the complete version of the GCC Cement Industry Report.

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GCC Retail Industry Report

GCC Retail Industry Report

April 2009

According to the report, opposing forces are currently at work in the GCC retail market. A growing population, rising tourism and huge investments into new retail destinations will encourage increased consumption, while falling equity and real estate prices, slower economic growth and reduction in consumer credit work in the opposite direction.

The report forecasts that the GCC retail market will continue to grow at a nominal CAGR of about 6.6% in 2009 to 2011, a lower pace than that over the past five years. Rising income levels contribute about two-thirds of the growth while population growth accounts for the balance. GCC retail players are trading at a lower average valuation multiple than our emerging and developed market peer groups. Furthermore, GCC retailers boast a dividend yield of 8.5%, significantly higher than both emerging and developed market peers.

According to the report, it is expected that budget retailers focused on non-discretionary products would outperform in the short to medium term as consumers tighten their budgets in view of job uncertainties and weak sentiment. Retailers focused on discretionary luxury goods will face more challenging trading conditions in the short to medium term. Consequently, it suggest investors with a short term investment horizon focus on the non-discretionary consumer goods segments, while foreseeing interesting long term investment opportunities emerging in the next two years in the more cyclical discretionary luxury goods segments".

For more details please click here to access the complete version of the GCC Retail Industry Report.

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UAE Insurance Industry Report

UAE Insurance Industry Report

August 2009

The UAE Insurance Industry report of Alpen Capital talks about the current status of the UAE insurance industry and how the economic slowdown has impacted the business. Although weakness in new car and home sales and construction project delays and cancellation will result in weaker growth in 2009 than over the past five years, the sector is expected to resume double digit growth rates in 2010 to 2012. The key factors underpinning the strong growth potential are low insurance penetration, relatively strong economic growth and favorable demographics.

According to the report, the UAE insurance companies are responding to slower growth in 2009 by ceding less business to reinsurance companies. There was a clear deceleration in gross premium growth in 2009, down from about 15% in the first quarter to only 1% in the second quarter. Meanwhile, net premium income (after reinsurance and provisions for unearned premiums) continued to grow at about 20% in the first and second quarters. This suggests the UAE insurers are retaining a greater part of risks that they have traditionally ceded to reinsurance companies due to concentration risk, technical complexity or lack of historic claims data.

The UAE insurers continue to perform very well in terms of underwriting performance, although rapid growth, increasing competition and cross-subsidization of unprofitable lines has resulted in gradually weaker underwriting margins over the last three years. Most of the UAE insurance companies are closely held and their stocks are inherently illiquid. The reports highlights that there is potential to unlock significant value by addressing relatively simple shortcomings in terms of investment strategy and transparency.

According to the report, conventional insurance continue to dominate the UAE market, but more and more players are also establishing Islamic compliant units. The report favours players that are present in both segments’, given the somewhat higher growth rates for Islamic insurance.

For more details please click here to access the complete version of the UAE Insurance Industry Report.

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GCC Healthcare Industry Report

GCC Healthcare Industry Report

September 2009

The GCC Healthcare industry report of Alpen Capital caters to investors looking for equity investment opportunities in local healthcare industry and projects strong growth for the sector. The report talks about how we see this relatively recession proof industry evolving over the next decade.

The GCC healthcare industry is poised for unparallel and consistent growth accompanied by a fundamental shift in the industry structure, infrastructure quality, payer model and funding options. The GCC countries are likely to experience a sharp increase in healthcare needs primarily led by a growing and ageing population and a rise in chronic non-communicable ‘lifestyle’ diseases. It is expected that the industry will register about 9% CAGR over the next decade to reach a market size of US$ 47-55 billion by 2020. The GCC hospital project pipeline is very significant. Presuming announced healthcare projects are delivered on time, we see a sufficient supply of hospital beds in all GCC countries, except Oman, to meet the expectation of strong growth in demand. The UAE and Qatar have the most ambitious pipelines as measured by the number of hospital beds per capita, and are banking on medical tourism from within and outside the GCC countries to maintain adequate hospital occupancy rates across the industry.

According to Alpen Capital, the GCC healthcare service sector will witness major improvements in the quality of services provided and in competitiveness on a global scale. The region’s endeavors in setting up integrated healthcare facilities in the form of healthcare cities and medical hubs, coupled with continuous improvement in technology and infrastructure, will significantly improve the availability and quality of healthcare services in the region.

For more details please click here to access the complete version of the GCC Hospitality Industry report.

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