GCC corporate earnings will be negatively affected in the first half (H1) of 2020 due to the economic fallout from the coronavirus pandemic, Zawya news platform quoted analysts as saying.
“Though many GCC countries have introduced strong measures to contain the coronavirus outbreak, we expect corporate earnings to take a meaningful hit in 1H of the year,” Salah Shamma, head of Investment, MENA, Franklin Templeton Emerging Markets Equity told Zawya.
He added, “that being said, even a severe decrease in near term profitability should not alter the long-term prospects for larger corporates in the GCC, who can absorb the current shock.”
As for asset prices, the pandemic outbreak continues to add significant volatility in MENA, while stock markets fell sharply in March following a slump in global markets. This is due to uncertainty triggered by COVID-19 which reflected the investors’ sentiment worldwide.