The average cost of capital has declined across GCC countries due to the improved economic outlook on the back of rapid vaccination roll-out across the U.S and Europe and the low-interest rate environment.
Sovereign risk premium and CDS spreads have narrowed for most GCC countries in H1 2021, compared to H1 2020.
The implied equity risk premium for Saudi Arabia, Kuwait and Dubai have increased due to an increase in the levels of equity index and a decline in risk-free rate.
The increase in 10-year U.S. treasury yield has consequently increased the risk-free rates for Saudi Arabia, Kuwait, Qatar and Abu Dhabi.
Why purchase the report?
- COVID-19 Impact: Our latest Equity Risk Premium values incorporate the impact of COVID-19.
- 3 Approaches: Robust analysis of Equity Risk Premium of GCC countries using three different approaches. Sovereign ratings approach, Equity market Implied and CDS spread based methods.
- 6 GCC Nations: Equity Risk Premium calculated for all the six member countries of the GCC region
- Risk Evolution: Trend on risk premium provided for all the six countries to better understand the risk evolution in these markets.
Table of Contents
- Executive Summary
- Why worry about WACC (Weighted Average Cost of Capital)?
- Country wise Commentary
- Saudi Arabia