UAE investors are among the world’s most optimistic – survey

Up to 83 per cent of UAE investors are optimistic about the local economy, emerging as the bullish among investors worldwide, a new survey has found.

The survey by wealth management firm UBS found that 78 per cent of UAE investors are also optimistic about the global economy.

In terms of asset classes, UAE investors were found to be extremely bullish on equities, with 80 per cent of respondents in favour of local stocks. They are also among the most likely to have plans to invest more (62 per cent), second only to Latin American investors (66 per cent).

The survey, which polled more than 3,600 wealthy investors and entrepreneurs in 17 countries, found a rebound in bullish sentiment in the first three months of 2019 as markets recovered from the late-2018 slump.

Globally, 51 per cent of respondents were optimistic on the global economy versus 21 per cent who were pessimistic. Business owners were especially positive, with 62 per cent optimistic and 15 per cent pessimistic.

Meanwhile 60 per cent of investors and 68 per cent of business owners expressed optimism about their own region’s economy.

Investors globally were bullish on stocks, with 56 per cent confident about stocks in their own regions versus 49 per cent about stocks globally.

Meanwhile 74 per cent saw recent market volatility as an investment opportunity, compared with 67 per cent who were still concerned about volatility witnessed in Q4 2018.

While 42 per cent planned to invest more in the next six months, 17 per cent planned to invest less.

The survey also found that investors expressed worries about domestic issues. Some 44 per cent cited their country’s politics as a top concern and 40 per cent cited their national debt. In the UAE, investors’ top concerns were the possibility of a global trade war, market volatility and inflation.

Investors’ cash holdings also remained high. On average, 32 per cent of portfolios globally were allocated to cash. In the UAE, cash levels were similarly high with 32 32 per cent.

“Cash is a safe asset for a liquidity strategy but a risky one for longevity. Right now, we see high levels of cash globally. This is a good time for investors to consider a more diversified portfolio,” said Paula Polito, client strategy officer at UBS Global Wealth Management.

Mark Haefele, chief investment officer at UBS added:”‘Buy local’ works well for vegetables, but we are more optimistic on the global economy and this survey confirms investors sometimes focus too much on their home region.

“Diversification is still the best way to access opportunities and side-step domestic risks.”