About 46 per cent of UAE investors expect inflation to pick up over the next 12 months while 92 per cent believe it will affect their portfolios, according to new research by Switzerland-based investment bank UBS.
The sentiment corresponds with investors globally, with 46 per cent saying that inflation will rise over the next 12 months and they plan to adjust their portfolios by buying more stocks and property assets, according to UBS's quarterly global Investor Sentiment survey.
The Swiss bank surveyed 2,999 investors with at least $1 million in investable assets and 1,201 business owners with at least $1m in annual revenue and at least one employee other than themselves from June 23 to July 12 across 15 markets, including China, Germany, Singapore, Switzerland, the UAE, the UK and the US.
Globally, central banks and governments have pumped $25 trillion into their economies to soften the blow of the pandemic. However, the flow of money has raised concerns about rising inflation, with economists expecting upward pressure on prices during the summer as countries reopen amid easing Covid-19 restrictions.
“Investors in the UAE are looking for investment opportunities to protect their purchasing power against inflation, with many eyeing real estate and sustainable investments,” said Ali Janoudi, head of wealth management Middle East and Africa at UBS.
“They are also optimistic about their own region’s economy. We believe a continued risk-on stance in equities is warranted and sustainable investing is our preferred approach to investing globally.”
To counter inflation, 35 per cent of UAE investors said they are interested in property while 34 per cent are considering sustainable investments and 32 per cent are considering hedging their portfolios, the survey found.
Additionally, 83 per cent of UAE investors have expressed confidence in the stock market and 47 per cent said they intend to increase their allocation to stocks in the coming six months.
Other top concerns for UAE investors include Covid-19 (66 per cent), climate change (62 per cent) and cyber security (61 per cent), the UBS survey said.
Investors in the UAE are looking for investment opportunities to protect their purchasing power against inflation, with many eyeing real estate and sustainable investments
Ali Janoudi,
head of wealth management Middle East and Africa, UBS
“Although we expect the recent rise in inflation to ease, the outlook for inflation remains uncertain and therefore building inflation protection into portfolios is an appropriate step for investors to be taking now,” said Tom Naratil, president of UBS Americas and co-president of UBS Global Wealth Management.
“This includes investing in commodities, private market infrastructure and stocks with pricing power, as these areas tend to perform better in an inflationary environment and will help to preserve purchasing power over the long term.”
About 35 per cent of global investors plan to add stocks while 33 per cent plan to add precious metals, 32 per cent plan to make sustainable investments and 32 per cent are looking at property, the UBS survey found.
Although inflation is a concern, seven in 10 investors are optimistic about their own region's economic prospects over the next 12 months while 67 per cent are bullish are the performance of the stock market over the next six months, the study found.
Globally, business owner optimism also remained high but dipped slightly by three percentage points, with 77 per cent remaining positive about their own business over the next 12 months.
Plans to hire also fell, with 35 per cent planning to actively recruit employees, compared with 37 per cent in the first quarter, according to UBS.
Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
MATCH INFO
Asian Champions League, last 16, first leg:
Al Ain 2 Al Duhail 4
Second leg:
Tuesday, Abdullah bin Khalifa Stadium, Doha. Kick off 7.30pm
Ain Dubai in numbers
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
Picture of Joumblatt and Hariri breaking bread sets Twitter alight
Mr Joumblatt’s pessimism regarding the Lebanese political situation didn’t stop him from enjoying a cheerful dinner on Tuesday with several politicians including Mr Hariri.
Caretaker Culture Minister Ghattas Khoury tweeted a picture of the group sitting around a table at a discrete fish restaurant in Beirut’s upscale Sodeco area.
Mr Joumblatt told The National that the fish served at Kelly’s Fish lounge had been very good.
“They really enjoyed their time”, remembers the restaurant owner. “Mr Hariri was taking selfies with everybody”.
Mr Hariri and Mr Joumblatt often have dinner together to discuss recent political developments.
Mr Joumblatt was a close ally of Mr Hariri’s assassinated father, former prime minister Rafik Hariri. The pair were leading figures in the political grouping against the 15-year Syrian occupation of Lebanon that ended after mass protests in 2005 in the wake of Rafik Hariri’s murder. After the younger Hariri took over his father’s mantle in 2004, the relationship with Mr Joumblatt endured.
However, the pair have not always been so close. In the run-up to the election last year, Messrs Hariri and Joumblatt went months without speaking over an argument regarding the new proportional electoral law to be used for the first time. Mr Joumblatt worried that a proportional system, which Mr Hariri backed, would see the influence of his small sect diminished.
With so much of Lebanese politics agreed in late-night meetings behind closed doors, the media and pundits put significant weight on how regularly, where and with who senior politicians meet.
In the picture, alongside Messrs Khoury and Hariri were Mr Joumbatt and his wife Nora, PSP politician Wael Abou Faour and Egyptian ambassador to Lebanon Nazih el Nagari.
The picture of the dinner led to a flurry of excitement on Twitter that it signified an imminent government formation. “God willing, white smoke will rise soon and Walid Beik [a nickname for Walid Joumblatt] will accept to give up the minister of industry”, one user replied to the tweet. “Blessings to you…We would like you to form a cabinet”, wrote another.
The next few days will be crucial in determining whether these wishes come true.
The Book of Collateral Damage
Sinan Antoon
(Yale University Press)
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