GCC millionaires bullish on UAE market
Majority of wealthy people in GCC prefer to invest in region over global markets.
Dubai: High net worth individuals in the GCC voiced strong sentiments towards investing in the UAE and Qatar while most of these rich people with $2 million or more in investable assets are upbeat about the long-term regional outlook, the latest GCC Wealth Insight Report revealed.
Khaled Sifri, CEO of Emirates Investment Bank, which released the report, said that amid a period of significant volatility and depressed oil prices, confidence of HNWIs in markets such as the UAE and Qatar remains very strong.
"With the global economy currently going through a period of significant volatility and with depressed oil prices, it comes as no surprise that this year's report is more sombre than in previous years. However, confidence in markets such as the UAE and Qatar remains very strong. When taking a longer-term view, HNWIs say they are optimistic about the Gulf region as a whole. Consistent with previous years, the majority of GCC HNWI investors prefer to invest in the region over global markets, despite any geopolitical concerns," Sifri said.
He said there is a clear shift towards conservative investments, with GCC HNWIs appearing to be more risk averse and adopting a defensive approach to their wealth allocations. This is evidenced in the notable shift this year towards cash and deposits as well as gold and precious metals.
The report shows that GCC retains its appeal for HNWIs. Similar to the 2015 report findings, a significant majority of HNWIs (76 per cent) prefer to keep their assets closer to home. Among HNWIs who prefer to keep their assets close to home, almost half (47 per cent) say this is because they are confident that investments in the region are secure. Other reasons cited include the ability to oversee investments (18 per cent) and familiarity with the risks and regulations (16 per cent).
The wealth report, based on a survey of HNWIs, said 36 per cent of the respondents see the regional economy worsening, a four-fold increase from the nine per cent in 2015.
Most HNWIs showed a clear shift towards conservative investments. They have raised their average allocation to cash and deposits up to 24 per cent from 17 per cent in 2015, with 62 per cent of HNWIs expecting to increase this allocation going forward.
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