US technology companies attracted the highest trading volumes among Saxo Bank investors in the UAE and around the world in 2020 amid the coronavirus pandemic and rising demand for electric vehicles, the Danish investment bank said on Tuesday.
Tesla and Apple tied for first as the most popular stocks for UAE investors, followed by Microsoft, Amazon and Chinese electric vehicle manufacturer Nio.
"The strict lockdowns and prolonged work-from-home trend which arose from the Covid-19 pandemic suited the business models of the US tech companies, reflected by the Nasdaq 100 being up more than 40 per cent for 2020," Saxo Bank said.
"EV companies ruled supreme as the best performers of 2020, with Tesla up more than 640 per cent and Nio skyrocketing by an astonishing 1,069 per cent."
Apple’s shares climbed 70 per cent this year, while Microsoft rose 33 per cent and Amazon by 67 per cent.
“Part of the Tesla story was the increase in EV sales globally despite the pandemic and the rise of 'green transformation' stocks highlighting a powerful new theme in financial markets,” Peter Garnry, head of equity strategy at Saxo Bank, said.
As climate-friendly Joe Biden takes over as the new US president on January 20, “there is more in store” for Tesla, according to Saxo Bank.
Tesla is by far the most traded stock by value on Wall Street, with $18 billion worth of its shares exchanged on average in each session over the past 12 months, easily beating Apple in second place with average daily trades of $14bn, Refinitiv data showed.
“The strategic shift towards cloud-based services has paid off” for Microsoft, Mr Garnry said. “If the work-from-home trend grows as expected, Microsoft will be a key facilitator for years to come."
Amazon, on the other hand, hired 175,000 new employees as online orders rose amid the pandemic. However, “regulators around the globe are setting up roadblocks, which could mean trouble in 2021”, Mr Garnry said.
Apple benefitted from the sale of its latest iPhone 12, while Nio is aiming to expand into Europe.
“While Tesla is trying to gain a foothold in China, Nio is already there,” Mr Garnry said. “While Musk makes the headlines, Nio benefits from the tailwind. [The] next step is punching their way into the European market.”
Mr Garnry also said Covid-19 has amplified the participation rate of retail investors in equity markets, mainly driven by younger people.
“The growing influence of retail traders has altered equity markets and created a new environment that has made it more difficult for traditional institutional investors to navigate,” he said.