UAE Investor Confidence at Highest

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Investor confidence in the UAE is at its highest, rising by five points to eighteen, according to a report by Friends Provident International (FPI).

Due to the recent Middle East unrest, investor confidence sees an uplift, with 70 percent of local investors saying that their investment views had remained the same or grown stronger in the last quarter, according to the new research.

The Friends Provident International Investor Attitudes report showed that the country rose by five points to 18, outperforming Hong Kong (15) and lying just behind Singapore(21).

The UAE score has trebled since the survey began its quarterly reports in the second quarter of last year.

Gold and cash remain by far the most popular asset classes, although interest in every asset class is increasing, highlighting an expanded risk appetite among local investors.

More than 70% of investors surveyed said that their view of investing in the UAE market had either remained unchanged or become more positive due to political and civil unrest in the MENA region, suggesting following an impressive recovery since the 2009 real estate crash, UAE could now be seen as a safe haven among investors.

Rocco Sepe, managing director International at Friends Life, said, A year on since we launched the Friends Provident International Investor Attitudes Report, we are seeing strong Index results for the UAE and Singapore and a steady return to confidence among investors. The Index is developing trend data, which tracks the recovery of international markets following the global economic crisis. It continues to provide an insight into how investors feel about various investment options. The results reveal an optimistic outlook that suggests local markets are becoming increasingly attractive.

Commenting on the surge in the Index, Matthew Waterfield, general manager, Middle East and Africa for Friends Provident International said: “The UAE has weathered the fallout from the global financial crisis admirably with the Index showing a progressively confident investor base. This wave we have investigated this increase in confidence in more depth and see the unrest in the MENA region has made the UAE an even more attractive market to invest in, with its political stability, economic security and firmly regulated financial institutions.”

Confidence in the current and future state of the market increased significantly, in this wave, both showing a gain of eight percentage points since April 2011.

Investors willing to take more investment risk increased by five percentage points, the biggest quarter on quarter increase since June 2010, and the number of risk-averse investors decreased by four percentage points from April 2011.

Asian market optimism strong

The report findings for Hong Kong paint a different picture with the Index for the country dipping for a second time this wave to a score of 15 points. Investors demonstrated the lowest confidence in future market performance since the launch of the report, with only 52% of respondents predicting an improvement in the investment market within the next six months.

In the wake of the recent earthquake and resulting situation in Japan, Hong Kong investors were asked about their view of the Japanese investment market. Not surprisingly, over half indicated that they were at least slightly less positive about investing, or wouldnt invest at all in the Japanese market. However, a relative amount of optimism remains for the wider Asian market, with 78% of investors in Hong Kong having an either more positive or unchanged view about investing in the Asian market now.

Reflecting growing confidence in local markets, most asset classes in UAE and Singapore increased in popularity, with money and property seeing the biggest rises in the UAE, and collectables having the biggest hike in Singapore. Conversely, low confidence in Hong Kong has contributed to a broad decline in favour across most asset classes, with property experiencing the biggest decline, followed by collectables and equities and shares. Gold however, remained the most popular asset class across all three regions.

The upbeat investor confidence about the UAE has also been revealed by another study conducted by management consultants Oliver Wyman and polling firm Zogby International. Despite the tumult witnessed across the Middle East and North Africa in the wake of the Arab Spring, senior executives in the UAE, Saudi Arabia and Qatar remain confident in the regions business climate, the study said.

FPI

The Friends Provident International Investor Attitudes report is a quarterly publication that provides a detailed study of attitudes toward current investment conditions, investment strategy, investment time horizons and attitudes to risk in UAE. FPI uses the research to develop the Friends Investor Attitudes Index, a reliable indicator of investor attitudes and sentiment.

The research was conducted by ICM Research, part of the Creston Group of companies and members of the Worldwide Independent Network of Market Research. The sample size for wave 5 in UAE was 764, to ensure the collection of robust data representative of investor attitudes.

Sources: arabianbusiness, bi-me, newsinsurance, khaleejtimes

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