Power Letters 2022: Bal Krishen, chairman, Century Financial

2021 was an eventful year for the financial markets, with all three major averages recording all-time highs, the crypto-mania continuing with Elon Musk’s favourite – dogecoin taping a 200 per cent surge. The year witnessed record-high trading volumes, much of which was driven by retail investors who were continuing the high level of engagement that began in 2020, benefiting Century Financial Consultancy. New offers such as fractional trades and record market volatility helped brokerage companies to capitalise on a new class of retail investors. The ongoing stimulus, Fed’s dovish stances, and swift vaccine programmes enabled index averages to continue the upward momentum, and any minor correction was viewed as a ‘buying the dip’ moment.

On the regional front, Abu Dhabi’s bourse ADX marked a milestone by crossing the Dhs1 trillion market cap threshold, making it one of the best-performing indexes, right before the mega event Expo 2020. Additionally, Abu Dhabi has proposed a regulatory framework to allow the listing of blank-cheque companies, potentially opening the door to a slew of Gulf-focused deals involving special-purpose acquisition companies, prompting more companies to go public and eliminating the pre-IPO hassles. ADX had a historic IPO year with four mega-companies listed on the local bourse. These new listings likely opened further avenues for new entrants, including citizens and expats, to participate in the UAE growth story. Even Dubai launched a new initiative to list Dubai government-owned companies on the DFM that will likely help the local bourse leapfrog to the next level.

As the pandemic enters its third year in 2022 and everyday life takes on some semblance of normalcy, the Fed’s hawkish decision may spark market volatility. In addition, four-decade-high inflation could induce the Fed to announce a more rapid tapering of its bond purchases and potential rate hikes in 2022 that could slow economic growth. A sudden policy shift by central banks anxious to tame surging inflation could be one of the downside risks for global stocks next year. Nevertheless, 2021 was a year of recovery, and 2022 could be a year of resilience – investing in reshoring supply chains, digitalising businesses, innovating in healthcare, and building a more sustainable planet.

Moreover, with the number of vaccinated individuals increasing across the globe and Covid-19 variants such as omicron reportedly causing milder symptoms in those who have received the shots, the re-opening of the economies worldwide will remain amidst changes occurring in major countries. 2022 could be a year where we see several breakthrough technologies and trends gaining momentum such as Metaverse, decarbonisation, blockchain, robotics and electric vehicles, among others. Century Financial Consultancy will benefit from the investor’s quest to participate in the new wave of technology. It may be challenging for layman investors to keep abreast of the latest trends in the financial markets owing to their dynamic nature; that is when the professional services of firms such as ours could help more than ever.