Last Updated on 21 November, 2023 by Samuelsson
The Middle East is a region that has historically been challenged by economic instability. The region is comprised of several countries, each of which has its own unique economic challenges.
High levels of poverty and inequality are two of the biggest economic issues facing the Middle East. According to a World Bank report, almost a quarter of the region’s population lives below the poverty line. This is compounded by the region’s high levels of income inequality, with the top 10 per cent of earners accounting for over 36 per cent of total income.
The region is also heavily reliant on oil as a primary source of income, but the global price of oil has fluctuated dramatically over the past decade. This has caused major economic disruption in the region, with some countries experiencing significant declines in their GDP and other economic indicators.
The political instability in the region is also a major factor in its economic situation. The Arab Spring of 2011, and subsequent civil wars and uprisings, have created an environment of uncertainty and instability. This has had a significant impact on the region’s economies, with the World Bank predicting that political instability could cause the region’s GDP to shrink by 2.5 per cent in 2015.
Finally, corruption is another major economic issue in the region. According to Transparency International, the Middle East is one of the most corrupt regions in the world, with several countries ranking near the bottom of the Corruption Perceptions Index. This has had a negative impact on economic growth and development, as corruption undermines trust in institutions, reduces foreign investment and reduces the effectiveness of government policies.
Overall, the Middle East is confronting a range of economic challenges, from poverty and inequality to political instability and corruption. While the region has made some progress in recent years, there is still much to be done in order to create a more stable and prosperous economic environment in the Middle East.
The 11 best dividend stocks in the Middle-East
1. Emaar Properties: Emaar Properties is one of the leading real estate developers in the Middle East, with a presence in over 25 countries across the region. Its excellent dividend yield of around 4.5% makes it one of the best dividend stocks in the Middle East. It’s a great choice for investors who want to benefit from the growth of the real estate sector in the Middle East.
2. Qatar National Bank: Qatar National Bank (QNB) is the largest financial services provider in the Middle East and Africa. It has a strong dividend yield of around 4.6%. It’s a great choice for investors who want to benefit from the rapid growth of the banking sector in the Middle East.
3. Saudi Basic Industries Corporation: Saudi Basic Industries Corporation (SABIC) is the largest publicly-traded company in the Middle East. It’s a great choice for income-seeking investors, as it has a dividend yield of around 3.4%. SABIC is a leader in petrochemicals and is well-positioned to take advantage of the growing demand for energy in the region.
4. Dubai Financial Market: Dubai Financial Market (DFM) is the largest stock exchange in the Middle East. It’s a great choice for dividend investors, as it has a dividend yield of around 4.7%. It’s a great choice for investors who want to benefit from the growth of the stock markets in the Middle East.
5. Etisalat: Etisalat is one of the largest telecommunications companies in the Middle East. It has a strong dividend yield of around 4.3%. It’s a great choice for investors who want to benefit from the growth of the telecommunications sector in the Middle East.
6. Majid Al Futtaim: Majid Al Futtaim is one of the leading retail and entertainment companies in the Middle East. It has a dividend yield of around 3.7%. It’s a great choice for investors who want to benefit from the growth of the consumer and leisure sectors in the Middle East.
7. National Bank of Abu Dhabi: National Bank of Abu Dhabi (NBAD) is one of the largest banks in the Middle East. It has a solid dividend yield of around 5.5%. It’s a great choice for investors who want to benefit from the growth of the banking sector in the Middle East.
8. Saudi Telecom Company: Saudi Telecom Company (STC) is one of the largest telecommunications companies in the Middle East. It has a dividend yield of around 4.3%. It’s a great choice for investors who want to benefit from the growth of the telecommunications sector in the Middle East.
9. Abu Dhabi National Energy Company: Abu Dhabi National Energy Company (TAQA) is one of the largest energy companies in the Middle East. It has a dividend yield of around 5.2%. It’s a great choice for investors who want to benefit from the growth of the energy sector in the Middle East.
10. Abu Dhabi Commercial Bank: Abu Dhabi Commercial Bank (ADCB) is one of the largest banks in the Middle East. It has a dividend yield of around 4.9%. It’s a great choice for investors who want to benefit from the growth of the banking sector in the Middle East.
11. Emirates NBD: Emirates NBD is one of the largest banks in the Middle East. It has a dividend yield of around 4.4%. It’s a great choice for investors who want to benefit from the growth of the banking sector in the Middle East.
What is the average dividend yield historically in the Middle–East?
The average dividend yield in the Middle East tends to vary depending on the region. Generally, the average dividend yield for the Middle East is between 2.5% and 4%, with markets in the Gulf Cooperation Council (GCC) countries generally having higher dividend yields than other countries in the region.
In Saudi Arabia, the largest economy in the Middle East, the average dividend yield is around 3.9%, compared to 3.3% in the UAE and 3.2% in Qatar. The average dividend yield in Kuwait is slightly higher at 4.1%, while Bahrain’s is at 3.7%. In Oman, the average dividend yield is 3.2%, while in Jordan it is 2.9%.
The average dividend yield in the Middle East is lower than the global average of 4.3%, but still relatively attractive compared to other regions. The relatively high dividend yields in the Middle East are largely due to the region’s relatively large oil and gas sector, which typically has higher dividends than other sectors.
The dividend yield of a company or market can change over time due to a variety of factors, such as changes in the economy, political environment, and interest rates. As such, investors should do their own research and monitor the dividend yields in the Middle East in order to make informed decisions about their investments.
Pros and cons of buying dividend stocks in the Middle–East?
1. Dividend yields in the Middle East are often higher than in other countries. This offers investors the opportunity to earn a higher return on their investments.
2. The Middle East is home to some of the largest and most profitable companies in the world. This gives investors access to a wide range of profitable opportunities.
3. The region is politically safe and stable. This means investments are less likely to be affected by political upheaval or economic instability.
4. The region has a long history of strong economic growth and stability. This means investors can expect their investments to be more resistant to downturns in the global economy.
5. There are a variety of tax incentives available in the Middle East, allowing investors to make their investments even more profitable.
1. Investing in the Middle East can be risky due to the region’s political and economic instability. This can make it difficult for investors to accurately gauge the potential returns on their investments.
2. There is a lack of transparency in the Middle East when it comes to the financial activities of the companies listed on exchanges. This can make it difficult for investors to make informed decisions.
3. The region’s stock markets are not as well developed as those of other countries. This makes it more difficult for investors to access the latest market information and make informed decisions.
4. Many of the Middle Eastern markets are still in the early stages of development. This means that there is a lack of liquidity and the markets are more prone to large price swings.
5. Investing in the Middle East is only recommended for investors with a high risk tolerance. It is not suitable for conservative investors who are looking for low-risk investments.
The historical return of Middle–East stocks vs Middle–East dividend stocks
The historical returns of Middle-East stocks and Middle-East dividend stocks vary depending on the time frame and the specific stocks that are being examined. Historically, stocks in the Middle-East have had higher returns than those of dividend stocks. Since the beginning of 2004, Middle-East stocks have returned an average of more than 10% per year, while Middle-East dividend stocks have returned an average of around 8% per year.
The performance of Middle-East stocks has been driven primarily by the rapid economic growth in the region in recent years. This growth has been supported by abundant oil resources and robust domestic demand for goods and services. The high demand for goods and services has led to higher prices for Middle-Eastern stocks, resulting in higher returns.
However, the performance of Middle-East dividend stocks has been more subdued than that of Middle-East stocks. Due to their high dividend yields, dividend stocks tend to offer less potential for capital appreciation than stocks that do not pay dividends. Nevertheless, Middle-East dividend stocks have still managed to outperform the broader markets in recent years, as they have benefited from the consistent dividend payments and the attractive yields they offer.
Overall, Middle-East stocks have historically provided higher returns than Middle-East dividend stocks. However, the performance of Middle-East dividend stocks has been more consistent and has still managed to outperform the broader markets in recent years. As such, investors looking for long-term capital appreciation may want to consider investing in Middle-East stocks, while those looking for income and stability may want to consider Middle-East dividend stocks.
How often do Middle–East companies pay a dividend?
The frequency of dividend payments by Middle-East companies varies greatly. While some companies pay dividends on a regular basis, such as quarterly or annually, other companies may not pay dividends at all or pay dividends only occasionally. Generally, dividend payments tend to be more common among larger, more established companies in the region than among smaller, less established companies.
The decision to pay a dividend is ultimately up to the individual company. Companies with higher revenues and higher profits may be more likely to pay dividends, as they are viewed as having sufficient resources to do so. On the other hand, companies with lower revenues and lower profits may be less likely to pay dividends, as they may be unable to afford to do so.
In addition, dividend payments may be affected by the economic and political situation in the region. In times of economic or political uncertainty, companies may be less likely to pay dividends, as they may be uncertain about their future prospects.
Overall, the frequency of dividend payments by Middle-East companies is highly variable and depends on a variety of factors. Companies may pay dividends on a regular basis, such as quarterly or annually, or they may pay dividends only occasionally or not at all. It is ultimately up to the individual company to decide whether to pay dividends and how often.
Middle–East small–cap dividend stocks
Middle-east small–cap dividend stocks offer investors the potential for above-average returns due to their smaller size and lower liquidity. Although these stocks can be more volatile than their larger, blue-chip counterparts, they can also give investors an attractive opportunity to earn attractive dividend yields with the potential for strong capital appreciation.
Investors who are looking to add Middle-east small-cap stocks to their portfolios should do their research to identify quality companies with stable management teams and growing future prospects. They should also consider their risk tolerance, as these stocks can be more volatile than large-cap stocks.
When choosing a Middle-east small-cap dividend stock, investors should consider factors such as the company’s fundamentals, financial health, dividend history and payout ratio. The company’s track record of dividend payments and the stability of its dividend payments should be looked at carefully. Additionally, investors should consider the company’s competitive position, its industry dynamics and its competitive advantages.
Investors should also consider the liquidity of Middle-east small-cap dividend stocks. Since these stocks are typically less liquid than larger-cap stocks, investors may be unable to find buyers or sellers in the market at times. This can be especially true when the stock is not widely followed or when the stock is trading at a low price.
Finally, investors should consider the tax implications of investing in Middle-east small-cap dividend stocks. Depending on the country in which they are based, investors may be subject to different tax rates or other considerations. It is important to understand the tax implications of investing in these stocks before investing.
Overall, Middle-east small-cap dividend stocks offer investors the potential for attractive yields and the potential for strong capital appreciation. However, it is important to do due diligence and understand the risks involved before investing in these stocks.
How to buy stocks in the Middle–East
The Middle East is an emerging market that offers plenty of investment opportunities for savvy investors. The region boasts a vibrant economy, a growing population, and a wealth of natural resources. With the right strategy and research, you can potentially make significant gains in the stock market. Here are some tips on how to buy stocks in the Middle East.
1. Choose a Broker: The first step is to find a reliable broker to work with. Make sure your broker is licensed and regulated by the relevant authorities in the region. Consider the fees, commissions, and other costs associated with the broker’s services to make sure you don’t overpay.
2. Research the Markets: Investing in the Middle East requires knowledge of the region’s politics, economics, and financial markets. Familiarize yourself with the region’s stocks, bonds, and other financial instruments. Read up on the local news and follow the performance of specific stocks and sectors.
3. Consider Exchange-Traded Funds (ETFs): ETFs are a type of investment fund that tracks a basket of stocks. They allow investors to benefit from exposure to the Middle Eastern markets without having to pick individual stocks. ETFs can also be traded on major exchanges, making them a convenient and cost-effective way to get exposure to the region.
4. Follow the Rules: Make sure you understand the tax implications of investing in the Middle East. Be aware of the regulations, restrictions, and other rules that apply to the region.
5. Develop a Strategy: Once you understand the risks and rewards associated with investing in the Middle East, develop a strategy to maximize your returns. Decide which stocks and sectors to focus on, and how much capital to allocate to each.
By following these tips, you can get started on buying stocks in the Middle East. But remember, investing involves risk and you should only invest money you can afford to lose. Good luck and happy investing!
What is the average payout ratio for Middle–East dividend stocks?
The average payout ratio for Middle-East dividend stocks can vary widely depending on the individual company and the region in which it is located. Generally, Middle-East dividends tend to be higher than those in other regions due to the higher oil prices in the region and the larger size of the region’s economy.
Recent studies have shown that the average payout ratio for Middle-East dividend stocks is typically around 50%. This is significantly higher than the average payout ratio in the U.S., which is typically around 30%.
However, individual companies in the Middle-East can have much higher or much lower payout ratios than the average. For instance, some of the larger Middle-East companies, such as Saudi Basic Industries Corp, have payout ratios as high as 80%. Smaller companies, on the other hand, may have payout ratios as low as 10%.
Thus, while the average payout ratio for Middle-East dividend stocks is typically around 50%, it can be significantly higher or lower depending on the individual company and its size.
How big is the Middle–East stock market?
The Middle-East stock market is a complex and varied landscape. It is made up of over 40 different stock exchanges located in countries across the Middle East, from Algeria to the United Arab Emirates. These exchanges include some of the world’s largest, such as the Saudi stock exchange, Tadawul, which had a market capitalization of $1.5 trillion in 2017.
The total size of the Middle-East stock market is estimated to be around $2.4 trillion. This makes it the fourth-largest stock market in the world, behind the US, China, and Japan. This figure is comprised of the combined market capitalization of all the Middle-East stock exchanges, which includes the two largest exchanges, Tadawul and the Qatar Exchange.
The Middle-East stock market is a dynamic and fast-growing market, with many countries making significant efforts to encourage more investment within the region. Since the start of this decade, the Middle-East has seen a rapid rise in foreign investment, with many investors taking advantage of the opportunities presented by the region’s attractive economic, political, and demographic characteristics.
In recent years, the Middle-East has become an increasingly attractive destination for investors looking to diversify their portfolio. With its low taxes, liberal regulations, and abundant natural resources, many investors find the Middle-East stock market an attractive option, particularly when compared to other markets in the region.
Overall, the Middle-East stock market is an attractive option for investors looking to diversify their portfolio and take advantage of the opportunities presented by the region. With its large size and fast-growing economy, the Middle-East stock market is one of the most dynamic and diverse markets in the world.
The Middle East is a complex region with a wide range of stock markets. In general, the answer to the question of whether Middle-East stocks are shareholder friendly depends on the specific country in question. Some countries, such as Qatar and the United Arab Emirates, have well-developed stock markets that are open to foreign investors, and these markets tend to be relatively shareholder friendly. However, other countries, such as Saudi Arabia, have markets that are still in the early stages of development and may not be as friendly to shareholders.
In general, Middle Eastern stock markets are far less regulated than those in many other parts of the world. This lack of regulation can create some risks for shareholders, but it can also be an opportunity for those who are willing to take the time to understand the market and the companies in which they are investing. The lack of regulation also means that there is a greater degree of freedom for companies to create their own corporate governance policies, which can be beneficial for shareholders.
In addition, Middle Eastern stock markets often have low liquidity and high trading costs. This can make it difficult for shareholders to buy and sell shares without incurring significant costs. As such, it is important for shareholders to be aware of these costs before investing. Furthermore, Middle Eastern companies often do not provide the same levels of transparency and disclosure as companies in other parts of the world, which can make it difficult for shareholders to make informed decisions about their investments.
Overall, whether Middle-East stocks are shareholder friendly will depend on the specific market in question. In general, however, they tend to be less regulated and may present some challenges for investors in terms of liquidity and trading costs. Additionally, the lack of transparency and disclosure can make it difficult for shareholders to make informed decisions about their investments. For these reasons, it is important for investors to understand the specific market they are investing in and the associated risks before investing.