UAE retail investors traded US technology stocks the most last year, despite Big Tech companies being hammered globally on excessive valuations and doubts over their earnings outlook, as they cut thousands of jobs amid monetary tightening by central banks and recession concerns.
Meta Platforms was the most-traded stock among Saxo Bank’s customers in the GCC last year, followed by Apple, Amazon, Tesla and Microsoft, the Danish investment bank said on Tuesday.
“The best long-term performance has been found in the technology sector,” Peter Garnry, head of equity strategy at the investment bank, said.
“In addition, many of the large technology companies are household names among consumers, making them more recognisable than some industrial companies.
“Many retail investors were still positive on the technology sector during 2022, with retail investors being net buyers of these stocks despite the declines.”
Technology and growth stocks led US equity markets for years following the 2008 global financial crisis, aided by near-zero interest rates.
However, they struggled along with broader markets last year, as the US Federal Reserve raised rates to fight surging inflation.
Global stocks recorded a $18 trillion rout last year. The Nasdaq 100 fell 33 per cent in 2022, while the S&P 500 lost 19.4 per cent.
Expensively valued technology stocks suffer more when interest rates rise. But other trends that supported technology’s advance in recent years may also go into reverse — economic recession risks affecting iPhone demand, while a slump in online advertising could hit Meta and Alphabet.
The top six stocks by market value in late 2021 — Apple, Microsoft, Alphabet, Amazon, Meta and Tesla — have seen their collective weight in the S&P 500 fall to 18 per cent from 25 per cent, according to Strategas Research Partners.
Fourth-quarter earnings in the tech sector are expected to have declined 9.1 per cent from a year ago, compared with a 2.8 per cent decline for S&P 500 earnings overall, according to Refinitiv IBES.
In Bloomberg’s annual survey of 134 fund managers last year, only about half the respondents said they would buy stocks in the technology sector — and even then, selectively.
Amid recent optimism that inflation has peaked — and that the Fed could soon start to change its tone — 71 per cent of respondents in the Bloomberg survey expect equities to rise in 2023, versus 19 per cent forecasting declines. For those seeing gains, the average response was a 10 per cent return.
Saxo Bank expects technology stocks to remain popular this year, especially if the Fed scales back its tight monetary policy at some point, according to Mr Garnry.
Similar to the most traded stocks in the GCC, Saxo Bank’s most traded stocks globally for 2022 also included Tesla, Apple and Meta.
“There has always been a noticeable comparison within the trade of tech stocks versus other assets,” said Damian Hitchen, Saxo Bank's chief executive for the Mena region.
“There is no surprise there as growth in technology is constant and consistent. Companies in all fields are always looking to increase their productivity with the help of technology.”
Regardless of the macroeconomic headwinds caused by Russia's war in Ukraine, the after-effects of Covid-19 and rising interest rates, the general population continue to find safety in tech shares, Saxo Bank said.
Top five most-traded shares by Saxo Bank’s UAE customers in 2022
- Meta
- Apple
- Amazon
- Tesla
- Microsoft
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
THE SIXTH SENSE
Starring: Bruce Willis, Toni Collette, Hayley Joel Osment
Director: M. Night Shyamalan
Rating: 5/5
Coming soon
Torno Subito by Massimo Bottura
When the W Dubai – The Palm hotel opens at the end of this year, one of the highlights will be Massimo Bottura’s new restaurant, Torno Subito, which promises “to take guests on a journey back to 1960s Italy”. It is the three Michelinstarred chef’s first venture in Dubai and should be every bit as ambitious as you would expect from the man whose restaurant in Italy, Osteria Francescana, was crowned number one in this year’s list of the World’s 50 Best Restaurants.
Akira Back Dubai
Another exciting opening at the W Dubai – The Palm hotel is South Korean chef Akira Back’s new restaurant, which will continue to showcase some of the finest Asian food in the world. Back, whose Seoul restaurant, Dosa, won a Michelin star last year, describes his menu as, “an innovative Japanese cuisine prepared with a Korean accent”.
Dinner by Heston Blumenthal
The highly experimental chef, whose dishes are as much about spectacle as taste, opens his first restaurant in Dubai next year. Housed at The Royal Atlantis Resort & Residences, Dinner by Heston Blumenthal will feature contemporary twists on recipes that date back to the 1300s, including goats’ milk cheesecake. Always remember with a Blumenthal dish: nothing is quite as it seems.
Tickets
Tickets start at Dh100 for adults, while children can enter free on the opening day. For more information, visit www.mubadalawtc.com.
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Normcore explained
Something of a fashion anomaly, normcore is essentially a celebration of the unremarkable. The term was first popularised by an article in New York magazine in 2014 and has been dubbed “ugly”, “bland’ and "anti-style" by fashion writers. It’s hallmarks are comfort, a lack of pretentiousness and neutrality – it is a trend for those who would rather not stand out from the crowd. For the most part, the style is unisex, favouring loose silhouettes, thrift-shop threads, baseball caps and boyish trainers. It is important to note that normcore is not synonymous with cheapness or low quality; there are high-fashion brands, including Parisian label Vetements, that specialise in this style. Embraced by fashion-forward street-style stars around the globe, it’s uptake in the UAE has been relatively slow.
