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According to CFA Institute and CFA Society Emirates Middle East Market Sentiment Survey
Debt and Shariah compliant issuances as well as Mergers & Acquisitions expected to increase
Survey results revealed ahead of Middle East Investment Conference in Kuwait
United Arab Emirates, 9 February 2015 - CFA Institute, the global association of investment professionals, and CFA Society Emirates, the local UAE society of CFA Institute, have launched the results of its fifth annual Middle East Market Sentiment Survey, which provides insights from CFA charterholders and CFA Institute members from across the Middle East region.
Nearly half (47%) of investors expect equities in the global market to have the highest total return in 2015 (compared to other asset classes such as bonds, cash, commodities, precious metals and real estate). Nearly one-third (31%) of investors expect equities in local Middle East markets to have the highest total return this year while one-quarter (26%) of respondents expect real estate to have the highest total return.
The survey results were unveiled at a press conference today ahead of the CFA Institute Middle East Investment Conference (MEIC), which is being held for the first time in Kuwait on 10th February 2015 under the patronage of His Excellency Anas K. Al-Saleh, Minister of Finance, State of Kuwait.
Nitin Mehta, CFA, Managing Director of CFA Institute in Europe, the Middle East, and Africa, stated:
"For the fifth consecutive year, the Middle East Market Sentiment Survey provides useful insights into the expectations of some of the most senior finance and investment professionals working in the region. Interestingly, opinions related to public disclosures are a major theme in this year's survey results. Given its importance in analysing listed companies, the majority of investment professionals in the region (68%) believe that both governments and corporations should increase efforts to create extensive systems for collecting data and disclosing information in order to help investors make informed investment decisions."
Amer Khansaheb, CFA, President of CFA Society Emirates, commented:
"The survey offers regional financial insight and assesses forecasted outcomes of some of the region's most pressing priorities and concerns such as real estate and oil. The results of the survey show that the vast majority of respondents (88%) in the UAE believe that the drop in oil prices is not beneficial to the sustainability of the UAE economy while 57% of respondents in the UAE expect that real estate prices will not increase over the next year. Overall, more than two-thirds (67%) of respondents expect debt issuing activities to increase in 2015, while 49% of respondents expect mergers & acquisitions to increase and 56% of respondents expect Shariah compliant issues to increase."
Five key findings from the survey include:
1. Real estate, hospitality, and construction sectors will be the main drivers of foreign direct investment (FDI) over the next two years, according to nearly half (47%) of respondents. Following these sectors, 18% of respondents expect energy and only 9% expect transportation to be the main driver of FDI.
2. Fragmented views on the most insightful metric for tracking near-term economic corrections. One-third (34%) of respondents indicated that commodities pricing provides the most insight into potential near-term economic corrections while another one-third (33%) of respondents believe that equity markets provide the most insight. At the same time, another one-quarter (27%) use real estate as the best indicator of near-term economic corrections.
3. Political differences are a significant obstacle to one consolidated regional stock exchange. The vast majority of respondents (75%) cite political differences among countries as the most important hurdle for creating one stock exchange, which represents all GCC markets.
4. Real estate prices in the UAE not expected to increase during the next three years. The majority of respondents (57%) expect that real estate prices will not increase during the next three years. While a majority of respondents (60%) expect a potential increase in real estate prices will boost the UAE economy, views on the effect of a potential stagnation or decrease in real estate prices are more varied with 40% of respondents expecting it to slow economic growth and 25% of respondents expecting it to boost growth.
5. Split views among UAE investors on the oil price per barrel by the end of 2015: Half of respondents (51%) expect the oil price per barrel to fall within the range $61-$90, while slightly less than half (47%) expect the oil price per barrel to fall within the range $30-$60. Of respondents based in the UAE, one-third believe that financing for UAE will tighten between $31-40 per barrel while another one-third believe this would happen at $41-$50 per barrel.
Methodology
An online survey was conducted from 13 January to 22 January 2015. 166 CFA Institute members and those with charters pending in eight countries across the Middle East participated in the survey, including: Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
Media Contacts
For and on behalf of CFA Institute in the GCC and Middle East
Erica Pettit/Vadia Rai @ FTI Consulting
T: +971 (0)4 4372110
Erica.Pettit@fticonsulting.com / Vadia.Rai@fticonsulting.com
CFA Institute
Nicole Haroutunian (Europe, Middle East, Africa)
T: + 44 (20) 7330 9550/9551
Nicole.Haroutunian@cfainstitute.org
About CFA Institute
CFA Institute is the global association of investment professionals that sets the standard for professional excellence and credentials. The organization is a champion for ethical behavior in investment markets and a respected source of knowledge in the global financial community. The end goal: to create an environment where investors' interests come first, markets function at their best, and economies grow. CFA Institute has more than 128,000 members in 147 countries and territories, including 121,000 CFA charterholders, and 144 member societies. For more information, visit www.cfainstitute.org.
About CFA Society Emirates
The CFA Emirates Society is an association of local investment professionals consisting of portfolio managers, investment advisors, educators and other financial professionals. With 600 members, CFA Society Emirates is the largest member society in the GCC region comprising over half of the total number of CFA charterholders in the Gulf. The society also represents a majority of the 4,773 candidates from the region who took the CFA exams in 2009. With CFA membership in the GCC anticipated to double over the next decade, a significant share of this growth is expected to be in the UAE.
© Press Release 2015