You might think that investing was a loser’s game in 2020, but the year has thrown up a surprising number of winners.
China's stock market, US technology giants and cryptocurrency Bitcoin have all flown this year, while the gold price hit a record high in August.
There were plenty of losers, too, as oil and banking stocks fell, and the UK trailed badly. However, even these underperformers showed signs of recovery as vaccine hopes grew.
Investors are backing stock markets to recover next year as the pandemic recedes, but it will be a long and bumpy road. So will this year’s winners prove to be next year’s losers?
2021 likely winners
Emerging markets
The great irony of 2020 is that the pandemic first struck in China, but the country’s stock market has been the best performer of the year, with share prices up a third. Asia-Pacific is close behind.
Asia is bouncing back strongly from the pandemic, says Chetan Sehgal, lead portfolio manager at Templeton Emerging Markets Investment Trust.
Samsung, Baidu, Tencent and Alibaba should do well as Asian growth is driven by technology, especially in “e-commerce, internet services, artificial intelligence, robotics, high performance computing and cloud computing”, adds Mr Sehgal.
Emerging Asia boasts a growing middle class who are keen to buy better-quality goods. “They want to upgrade their consumption patterns and buy a better watch, go to a bigger cinema screen and drive a better car.”
Verdict: As the US, Europe and UK struggle, Asia is the one to back.
Property
Commercial property had a tough 2020, as the trend for working and shopping from home destroyed demand for office space and shopping centres.
The MSCI World Real Estate Index fell by 6.42 per cent in the year to November 30, although it has picked up lately on vaccine hopes.
Property may recover further as people return to working from offices, says Faisal Al Omran, co-founder and managing partner at Neo Capital.
“We don’t believe in full-time work from home.”
Low returns on cash and bonds, combined with a red-hot equity market, will encourage more investors to try property for steady returns, Mr Al Omran says.
Verdict: It's a big contrarian call. Shops and offices have fallen out of favour, so approach with caution.
Oil
A barrel of Brent crude at the start of the year was trading at around $65 but dipped below $20 in April at the height of the pandemic. The oil price even turned negative in the US, as producers paid people to take deliveries off their hands, but has revived in recent months.
Vaccine news has brightened growth and oil demand prospects
Brent now trades at around $50, while Goldman Sachs forecasts it will hit $65 next year.
Norbert Rücker, head of economics and next generation research at Julius Baer, also expects price growth as demand outstrips supply again. “Vaccine news has brightened growth and oil demand prospects.”
“Risk assets” such as oil are ending the year in a jubilant mood as confidence returns, says Fawad Razaqzada, market analyst at ThinkMarkets. “I expect that trend to continue, unless something fundamentally changes.”
Oil companies still face challenges as they transition to a low-carbon economy, says Romain Boscher, global chief investment officer for equities at Fidelity International.
Verdict: If the pandemic eases and the world gets moving again, the oil price rally could accelerate.
2021’s likely losers
US tech titans
The US did it again in 2020. The S&P 500 index has climbed another 15 per cent this year, as tech giants such as Amazon, Apple, Microsoft, Netflix, Tesla and Google-owner Alphabet powered on.
Andrew McCaffery, global chief investment officer of asset management at Fidelity International, warns the sector is looking expensive. “Valuations of some US mega caps appear to be detached from reality, with some stocks trading at over 100 times earnings,” he says.
Any correction could have an outsized impact on the wider market given that tech giants now account for more than a fifth of the S&P 500 index, he adds.
Verdict: The tech titans look vulnerable to a crash. Some will see any dip as a long-term buying opportunity.
Green energy
Clean energy stocks have enjoyed a dizzying rally in recent months, but Mr Rücker fears recent enthusiasm has been overdone. “Growth prospects are solid and the theme is popular among investors. However, today’s valuations imply too much optimism, while massive inflows of capital risk are overwhelming businesses,” he says.
Investors expect unreasonably high growth rates, particularly for wind turbine makers and solar module suppliers, Mr Rücker warns.
Verdict: Green energy has been highly cyclical and the sector looks expensive after recent outperformance.
Bitcoin
Bitcoin has roughly tripled this year to hit an all-time high of more than $23,000, and some claim this is only the start.
Where the crazy crypto goes next is anybody’s guess, but Simon Peters, an analyst at multi-asset investment platform eToro, reckons it could hit $70,000 to $90,000 by next Christmas.
However, it might fall back to $13,000 to $14,000 first, he adds. As ever, investors will need strong stomachs.
Verdict: The last time Bitcoin hit $20,000 in December 2017, it crashed in January. Approach with caution.
Gold and silver
The gold price flew in the first half of the year, as investors fled to the traditional safe haven during the worst of the pandemic.
In August, gold hit an all-time high of $2,084 an ounce. It has since plunged to $1,878 as investors look forward to a brighter 2021.
Gold still trades around 27 per cent higher than a year ago, while silver is up more than 50 per cent.
They could struggle next year if the recovery drives up bond yields on government bonds, as many anticipate, says Carsten Menke, head of next generation research at Julius Baer.
Gold does not pay any interest, so this will make holding the precious metal relatively less attractive.
Mr Menke says demand for gold as a safe haven should also fade as the pandemic eases. “We still do not see a revival of this year’s rally.”
Verdict: If investor confidence continues to recover, gold could lose its shine.
Cash
Cash has been a loser ever since interest rates were cut almost to zero after the financial crisis in March 2009, and this year things got even worse as rates turned negative in many countries.
Verdict: 2021 looks like another tough year for cash.
Wild card
The UK
Who would be crazy enough to invest in the UK right now, given Brexit, the mutant Covid-19 strain and Prime Minister Boris Johnson’s erratic performance?
The UK stock market underperformed again in 2020 after suffering a bigger hit from the pandemic than any other developed economy, while being torn in two over Brexit.
The smallest hint of a turnaround will see investors flock to UK shares, which are relatively cheap
London’s benchmark FTSE 100 Index looks set to end the year about 12 per cent lower, in contrast to the US S&P 500, which will rise around 15 per cent.
However, the UK has made a fast start on its vaccine programme, and soon Brexit should be settled either way.
There is so much bad news about the UK that investors risk missing a golden opportunity, says Stephen Thomas, associate dean of MBA Programmes at City, University of London’s Business School (formerly Cass). “The smallest hint of a turnaround will see investors flock to UK shares, which are relatively cheap. The sky is darkest just before dawn.”
There is another reason for the FTSE 100’s underperformance. It has plenty of exposure to banking and oil stocks, which have been hard hit this year. “If the UK comes back into favour in 2021, the speed of the recovery may surprise investors,” says Mr Thomas.
Verdict: The UK is a major gamble, but its current woes could be a great chance to get back into this overlooked market.
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
- Avoid suspicious social media ads promoting fraudulent schemes.
- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
- Only use reputable platforms that have a track record of strong regulatory compliance.
- Store funds in hardware wallets as opposed to online exchanges.
How to donate
Text the following numbers:
2289 - Dh10
6025 - Dh 20
2252 - Dh 50
2208 - Dh 100
6020 - Dh 200
*numbers work for both Etisalat and du
Representing%20UAE%20overseas
%3Cp%3E%0DIf%20Catherine%20Richards%20debuts%20for%20Wales%20in%20the%20Six%20Nations%2C%20she%20will%20be%20the%20latest%20to%20have%20made%20it%20from%20the%20UAE%20to%20the%20top%20tier%20of%20the%20international%20game%20in%20the%20oval%20ball%20codes.%0D%3Cbr%3E%20%0D%3Cbr%3E%3Cstrong%3ESeren%20Gough-Walters%20(Wales%20rugby%20league)%3C%2Fstrong%3E%0D%3Cbr%3EBorn%20in%20Dubai%2C%20raised%20in%20Sharjah%2C%20and%20once%20an%20immigration%20officer%20at%20the%20British%20Embassy%20in%20Abu%20Dhabi%2C%20she%20debuted%20for%20Wales%20in%20rugby%20league%20in%202021.%0D%3Cbr%3E%20%0D%3Cbr%3E%3Cstrong%3ESophie%20Shams%20(England%20sevens)%3C%2Fstrong%3E%0D%3Cbr%3EWith%20an%20Emirati%20father%20and%20English%20mother%2C%20Shams%20excelled%20at%20rugby%20at%20school%20in%20Dubai%2C%20and%20went%20on%20to%20represent%20England%20on%20the%20sevens%20circuit.%20%0D%3Cbr%3E%20%0D%3Cbr%3E%3Cstrong%3EFiona%20Reidy%20(Ireland)%3C%2Fstrong%3E%0D%3Cbr%3EMade%20her%20Test%20rugby%20bow%20for%20Ireland%20against%20England%20in%202015%2C%20having%20played%20for%20four%20years%20in%20the%20capital%20with%20Abu%20Dhabi%20Harlequins%20previously.%0D%3C%2Fp%3E%0A
Results
6.30pm: Mazrat Al Ruwayah Group Two (PA) US$55,000 (Dirt) 1,600m; Winner: Rasi, Harry Bentley (jockey), Sulaiman Al Ghunaimi (trainer).
7.05pm: Meydan Trophy (TB) $100,000 (Turf) 1,900m; Winner: Ya Hayati, William Buick, Charlie Appleby.
7.40pm: Handicap (TB) $135,000 (D) 1,200m; Winner: Bochart, Richard Mullen, Satish Seemar.
8.15pm: Balanchine Group Two (TB) $250,000 (T) 1,800m; Winner: Magic Lily, William Buick, Charlie Appleby.
8.50pm: Handicap (TB) $135,000 (T) 1,000m; Winner: Waady, Jim Crowley, Doug Watson.
9.25pm: Firebreak Stakes Group Three (TB) $200,000 (D) 1,600m; Winner: Capezzano, Mickael Barzalona, Salem bin Ghadayer.
10pm: Handicap (TB) $175,000 (T) 2,410m; Winner: Eynhallow, Mickael Barzalona, Charlie Appleby.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
RESULT
Bournemouth 0 Southampton 3 (Djenepo (37', Redmond 45' 1, 59')
Man of the match Nathan Redmond (Southampton)
Killing of Qassem Suleimani
Libya's Gold
UN Panel of Experts found regime secretly sold a fifth of the country's gold reserves.
The panel’s 2017 report followed a trail to West Africa where large sums of cash and gold were hidden by Abdullah Al Senussi, Qaddafi’s former intelligence chief, in 2011.
Cases filled with cash that was said to amount to $560m in 100 dollar notes, that was kept by a group of Libyans in Ouagadougou, Burkina Faso.
A second stash was said to have been held in Accra, Ghana, inside boxes at the local offices of an international human rights organisation based in France.
The years Ramadan fell in May
The biog
Most memorable achievement: Leading my first city-wide charity campaign in Toronto holds a special place in my heart. It was for Amnesty International’s Stop Violence Against Women program and showed me the power of how communities can come together in the smallest ways to have such wide impact.
Favourite film: Childhood favourite would be Disney’s Jungle Book and classic favourite Gone With The Wind.
Favourite book: To Kill A Mockingbird for a timeless story on justice and courage and Harry Potters for my love of all things magical.
Favourite quote: “We make a living by what we get, but we make a life by what we give.” — Winston Churchill
Favourite food: Dim sum
Favourite place to travel to: Anywhere with natural beauty, wildlife and awe-inspiring sunsets.
More from Neighbourhood Watch:
The specs
Engine: 2.4-litre 4-cylinder
Transmission: CVT auto
Power: 181bhp
Torque: 244Nm
Price: Dh122,900
Navdeep Suri, India's Ambassador to the UAE
There has been a longstanding need from the Indian community to have a religious premises where they can practise their beliefs. Currently there is a very, very small temple in Bur Dubai and the community has outgrown this. So this will be a major temple and open to all denominations and a place should reflect India’s diversity.
It fits so well into the UAE’s own commitment to tolerance and pluralism and coming in the year of tolerance gives it that extra dimension.
What we will see on April 20 is the foundation ceremony and we expect a pretty broad cross section of the Indian community to be present, both from the UAE and abroad. The Hindu group that is building the temple will have their holiest leader attending – and we expect very senior representation from the leadership of the UAE.
When the designs were taken to the leadership, there were two clear options. There was a New Jersey model with a rectangular structure with the temple recessed inside so it was not too visible from the outside and another was the Neasden temple in London with the spires in its classical shape. And they said: look we said we wanted a temple so it should look like a temple. So this should be a classical style temple in all its glory.
It is beautifully located - 30 minutes outside of Abu Dhabi and barely 45 minutes to Dubai so it serves the needs of both communities.
This is going to be the big temple where I expect people to come from across the country at major festivals and occasions.
It is hugely important – it will take a couple of years to complete given the scale. It is going to be remarkable and will contribute something not just to the landscape in terms of visual architecture but also to the ethos. Here will be a real representation of UAE’s pluralism.
Kat Wightman's tips on how to create zones in large spaces
- Area carpets or rugs are the easiest way to segregate spaces while also unifying them.
- Lighting can help define areas. Try pendant lighting over dining tables, and side and floor lamps in living areas.
- Keep the colour palette the same in a room, but combine different tones and textures in different zone. A common accent colour dotted throughout the space brings it together.
- Don’t be afraid to use furniture to break up the space. For example, if you have a sofa placed in the middle of the room, a console unit behind it will give good punctuation.
- Use a considered collection of prints and artworks that work together to form a cohesive journey.
Know your Camel lingo
The bairaq is a competition for the best herd of 50 camels, named for the banner its winner takes home
Namoos - a word of congratulations reserved for falconry competitions, camel races and camel pageants. It best translates as 'the pride of victory' - and for competitors, it is priceless
Asayel camels - sleek, short-haired hound-like racers
Majahim - chocolate-brown camels that can grow to weigh two tonnes. They were only valued for milk until camel pageantry took off in the 1990s
Millions Street - the thoroughfare where camels are led and where white 4x4s throng throughout the festival
Nancy 9 (Hassa Beek)
Nancy Ajram
(In2Musica)
Diriyah%20project%20at%20a%20glance
%3Cp%3E-%20Diriyah%E2%80%99s%201.9km%20King%20Salman%20Boulevard%2C%20a%20Parisian%20Champs-Elysees-inspired%20avenue%2C%20is%20scheduled%20for%20completion%20in%202028%3Cbr%3E-%20The%20Royal%20Diriyah%20Opera%20House%20is%20expected%20to%20be%20completed%20in%20four%20years%3Cbr%3E-%20Diriyah%E2%80%99s%20first%20of%2042%20hotels%2C%20the%20Bab%20Samhan%20hotel%2C%20will%20open%20in%20the%20first%20quarter%20of%202024%3Cbr%3E-%20On%20completion%20in%202030%2C%20the%20Diriyah%20project%20is%20forecast%20to%20accommodate%20more%20than%20100%2C000%20people%3Cbr%3E-%20The%20%2463.2%20billion%20Diriyah%20project%20will%20contribute%20%247.2%20billion%20to%20the%20kingdom%E2%80%99s%20GDP%3Cbr%3E-%20It%20will%20create%20more%20than%20178%2C000%20jobs%20and%20aims%20to%20attract%20more%20than%2050%20million%20visits%20a%20year%3Cbr%3E-%20About%202%2C000%20people%20work%20for%20the%20Diriyah%20Company%2C%20with%20more%20than%2086%20per%20cent%20being%20Saudi%20citizens%3Cbr%3E%3C%2Fp%3E%0A
Specs
Engine: Duel electric motors
Power: 659hp
Torque: 1075Nm
On sale: Available for pre-order now
Price: On request
Juventus v Napoli, Sunday, 10.45pm (UAE)
Match on Bein Sports
Star%20Wars%3A%20Episode%20I%20%E2%80%93%20The%20Phantom%20Menace
%3Cp%3E%3Cstrong%3EDeveloper%3A%3C%2Fstrong%3E%20Big%20Ape%20Productions%3Cbr%3E%3Cstrong%3EPublisher%3A%3C%2Fstrong%3E%20LucasArts%3Cbr%3E%3Cstrong%3EConsoles%3A%3C%2Fstrong%3E%20PC%2C%20PlayStation%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%202%2F5%3C%2Fp%3E%0A
Origin
Dan Brown
Doubleday
Avatar: Fire and Ash
Director: James Cameron
Starring: Sam Worthington, Sigourney Weaver, Zoe Saldana
Rating: 4.5/5
Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
What is the Supreme Petroleum Council?
The Abu Dhabi Supreme Petroleum Council was established in 1988 and is the highest governing body in Abu Dhabi’s oil and gas industry. The council formulates, oversees and executes the emirate’s petroleum-related policies. It also approves the allocation of capital spending across state-owned Adnoc’s upstream, downstream and midstream operations and functions as the company’s board of directors. The SPC’s mandate is also required for auctioning oil and gas concessions in Abu Dhabi and for awarding blocks to international oil companies. The council is chaired by Sheikh Khalifa, the President and Ruler of Abu Dhabi while Sheikh Mohamed bin Zayed, Abu Dhabi’s Crown Prince and Deputy Supreme Commander of the Armed Forces, is the vice chairman.
Paltan
Producer: JP Films, Zee Studios
Director: JP Dutta
Cast: Jackie Shroff, Sonu Sood, Arjun Rampal, Siddhanth Kapoor, Luv Sinha and Harshvardhan Rane
Rating: 2/5
Bio
Born in Dubai in 1994
Her father is a retired Emirati police officer and her mother is originally from Kuwait
She Graduated from the American University of Sharjah in 2015 and is currently working on her Masters in Communication from the University of Sharjah.
Her favourite film is Pacific Rim, directed by Guillermo del Toro
