Despite the rundown in the oil price, the world still travels to the GCC seeking investment capital. The strategy may seem counter-intuitive for those looking to identify investors. Arab investors—now constrained by less financial liquidity—are unlikely to invest in far-flung opportunities, right? The truth is that there is a substitution effect taking place. Names are eager to diversify exposure to replace high-return opportunities that may no longer be available in the local economy. Emerging market-based investors are traditionally less defensive than those based in the major economies. One recent example was the “Pakistani Investors Forum” held in Riyadh, in which Pakistani officials aimed to build on otherwise strong socio-political ties between the nations. Immediate results are seldom evident from roadshow events, but future study will likely pinpoint specific outcomes. ■
Learn more at Arab News.
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