Investors in the Emirates are showing "a surge in optimism" about the market as the regional and global economies continue on the road to recovery, according to a new report.
The latest Investor Attitudes Report, which features an index that tracks investor sentiment, found that confidence increased a full 4 points, to 11, during the last quarter. That is in stark comparison to earlier last year when confidence inched up just one notch, from 6 to 7 points, between April and July. The report is produced by Friends Provident International, a provider of financial products, with an office in Dubai.
"Expats are here to create wealth, and we've seen [them] saving on a regular basis out of their monthly salary," says Matt Waterfield, the general manager (Middle East and Africa) at Friends Provident International. "Now, their confidence is rising and they're looking to invest that money they've already created."
In a sign that investors are still being cautiously optimistic, many of them said they preferred to put their money in lower-risk investments such as cash and gold.
But they also showed a "burgeoning interest in bonds", according to the report, and that was mirrored by a hungrier appetite for stocks.
"They're more confident to start investing money in other areas besides pure cash and gold," said Mr Waterfield.
The report, which relied on a survey of more than 700 investors across the Emirates, said the UAE faced a "relatively slow recovery" after the financial downturn, but the Government's bid to boost the economy had helped to improve the attitudes of investors.
Sentiment also changed as a majority of investors for the first time turned to stockbrokers and insurance sales agents for financial advice, rather than relying on their family and friends. Overall, two in five respondents from the Emirates said they believed the investment market had improved compared with six months ago, while nearly half agreed it would improve in the short term.