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LONDON: Retailers, insurers and car hire companies are among the potential winners from the decision to allow women to drive in ��������Ƶ.
Investors inside and outside the Kingdom are today assessing the impact of the momentous move on the Kingdom’s $650 billion economy.
��������Ƶ on Tuesday said it would allow women to drive in the Kingdom, in the latest of a string of social and economic reforms in the country as it seeks to modernize.
Analysts expect it will produce a massive economic windfall as more women are able to enter the workplace with the trickledown providing a boost for everything from the insurance sector to banks.
“We see long term support for growth in retailers and sellers of discretionary items, due to increased mobility and employment among women in ��������Ƶ,” said Mohammad Kamal, a director at Arqaam Capital.
Among the companies picked by Arqaam as potential beneficiaries are Fawaz Al Hokair, one of the leading retail conglomerates in the country.
Tawuniya, the insurance group is also set to cash in as the potential pool of insurable drivers doubles.
Other publicly traded companies picked by Arqaam include Saudi Budget, Saudi Marketing, Al Othaim, Al Rajhi and Axa.
Abu Dhabi based NBAD Securities also sees Al Hokair as a potential winner as well as retailer Jarir.
“Insurance stocks were surging yesterday, when the market first learned of the official announcement, as demand for auto insurance coverage is expected to increase,” said Sanyalaksna Manibhandu, head of research at NBAD Securities in Abu Dhabi.
“Other industry sectors that could benefit include banks, in the event that the demand for auto loans increase. On the flip side, male chauffeurs may need to find new jobs as female passengers become drivers. If the decree merely leads to the replacement of a chauffeur by the passenger, auto dealers may not see demand increase as much as they would like.”
The economic empowerment of women in the Kingdom is seen as a crucial part of that process.
King Salman issued the decree, according to a royal court statement carried by the Saudi Press Agency (SPA).
“The royal decree will implement the provisions of traffic regulations, including the issuance of driving licenses for men and women alike,” the SPA said.
The decree highlighted the “negative effects of not allowing women to drive vehicles.”
��������Ƶ’s ambassador to the US, Prince Khaled bin Salman, described the decision of allowing women to drive as a “huge step.”