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
Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
Starring: Jamie Foxx, Angela Bassett, Tina Fey
Directed by: Pete Doctor
Rating: 4 stars
UAE currency: the story behind the money in your pockets
Top 10 most polluted cities
- Bhiwadi, India
- Ghaziabad, India
- Hotan, China
- Delhi, India
- Jaunpur, India
- Faisalabad, Pakistan
- Noida, India
- Bahawalpur, Pakistan
- Peshawar, Pakistan
- Bagpat, India
Tips to stay safe during hot weather
- Stay hydrated: Drink plenty of fluids, especially water. Avoid alcohol and caffeine, which can increase dehydration.
- Seek cool environments: Use air conditioning, fans, or visit community spaces with climate control.
- Limit outdoor activities: Avoid strenuous activity during peak heat. If outside, seek shade and wear a wide-brimmed hat.
- Dress appropriately: Wear lightweight, loose and light-coloured clothing to facilitate heat loss.
- Check on vulnerable people: Regularly check in on elderly neighbours, young children and those with health conditions.
- Home adaptations: Use blinds or curtains to block sunlight, avoid using ovens or stoves, and ventilate living spaces during cooler hours.
- Recognise heat illness: Learn the signs of heat exhaustion and heat stroke (dizziness, confusion, rapid pulse, nausea), and seek medical attention if symptoms occur.
Six tips to secure your smart home
Most smart home devices are controlled via the owner's smartphone. Therefore, if you are using public wi-fi on your phone, always use a VPN (virtual private network) that offers strong security features and anonymises your internet connection.
Keep your smart home devices’ software up-to-date. Device makers often send regular updates - follow them without fail as they could provide protection from a new security risk.
Use two-factor authentication so that in addition to a password, your identity is authenticated by a second sign-in step like a code sent to your mobile number.
Set up a separate guest network for acquaintances and visitors to ensure the privacy of your IoT devices’ network.
Change the default privacy and security settings of your IoT devices to take extra steps to secure yourself and your home.
Always give your router a unique name, replacing the one generated by the manufacturer, to ensure a hacker cannot ascertain its make or model number.
Newcastle United 0 Tottenham Hotspur 2
Tottenham (Alli 61'), Davies (70')
Red card Jonjo Shelvey (Newcastle)
EXPATS
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match info
Chelsea 2
Willian (13'), Ross Barkley (64')
Liverpool 0
Mohammed bin Zayed Majlis
Read more about the coronavirus
JOKE'S%20ON%20YOU
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Women & Power: A Manifesto
Mary Beard
Profile Books and London Review of Books
Founder: Ayman Badawi
Date started: Test product September 2016, paid launch January 2017
Based: Dubai, UAE
Sector: Software
Size: Seven employees
Funding: $170,000 in angel investment
Funders: friends
The distance learning plan
Spring break will be from March 8 - 19
Public school pupils will undergo distance learning from March 22 - April 2. School hours will be 8.30am to 1.30pm
Staff will be trained in distance learning programmes from March 15 - 19
Teaching hours will be 8am to 2pm during distance learning
Pupils will return to school for normal lessons from April 5
Who has lived at The Bishops Avenue?
- George Sainsbury of the supermarket dynasty, sugar magnate William Park Lyle and actress Dame Gracie Fields were residents in the 1930s when the street was only known as ‘Millionaires’ Row’.
- Then came the international super rich, including the last king of Greece, Constantine II, the Sultan of Brunei and Indian steel magnate Lakshmi Mittal who was at one point ranked the third richest person in the world.
- Turkish tycoon Halis Torprak sold his mansion for £50m in 2008 after spending just two days there. The House of Saud sold 10 properties on the road in 2013 for almost £80m.
- Other residents have included Iraqi businessman Nemir Kirdar, singer Ariana Grande, holiday camp impresario Sir Billy Butlin, businessman Asil Nadir, Paul McCartney’s former wife Heather Mills.
Hunting park to luxury living
- Land was originally the Bishop of London's hunting park, hence the name
- The road was laid out in the mid 19th Century, meandering through woodland and farmland
- Its earliest houses at the turn of the 20th Century were substantial detached properties with extensive grounds
RESULTS
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How to play the stock market recovery in 2021?
If you are looking to build your long-term wealth in 2021 and beyond, the stock market is still the best place to do it as equities powered on despite the pandemic.
Investing in individual stocks is not for everyone and most private investors should stick to mutual funds and ETFs, but there are some thrilling opportunities for those who understand the risks.
Peter Garnry, head of equity strategy at Saxo Bank, says the 20 best-performing US and European stocks have delivered an average return year-to-date of 148 per cent, measured in local currency terms.
Online marketplace Etsy was the best performer with a return of 330.6 per cent, followed by communications software company Sinch (315.4 per cent), online supermarket HelloFresh (232.8 per cent) and fuel cells specialist NEL (191.7 per cent).
Mr Garnry says digital companies benefited from the lockdown, while green energy firms flew as efforts to combat climate change were ramped up, helped in part by the European Union’s green deal.
Electric car company Tesla would be on the list if it had been part of the S&P 500 Index, but it only joined on December 21. “Tesla has become one of the most valuable companies in the world this year as demand for electric vehicles has grown dramatically,” Mr Garnry says.
By contrast, the 20 worst-performing European stocks fell 54 per cent on average, with European banks hit by the economic fallout from the pandemic, while cruise liners and airline stocks suffered due to travel restrictions.
As demand for energy fell, the oil and gas industry had a tough year, too.
Mr Garnry says the biggest story this year was the “absolute crunch” in so-called value stocks, companies that trade at low valuations compared to their earnings and growth potential.
He says they are “heavily tilted towards financials, miners, energy, utilities and industrials, which have all been hit hard by the Covid-19 pandemic”. “The last year saw these cheap stocks become cheaper and expensive stocks have become more expensive.”
This has triggered excited talk about the “great value rotation” but Mr Garnry remains sceptical. “We need to see a breakout of interest rates combined with higher inflation before we join the crowd.”
Always remember that past performance is not a guarantee of future returns. Last year’s winners often turn out to be this year’s losers, and vice-versa.
MATCH INFO
Manchester City 3 (Silva 8' &15, Foden 33')
Birmginahm City 0
Man of the match Bernado Silva (Manchester City)
FA%20Cup%20semi-final%20draw
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