Affluent investors in the UAE and around the world are now feeling less upbeat amid recession concerns and inflation worries, according to a new study.

Nearly half (45%) of high-net-worth investors (HNW) in the country are holding off on big purchases, while 72% are concerned about the long-term impact on retirement savings and funds for future generations, UBS' new investor sentiment survey found.

The global wealth manager had polled more than 2,800 investors and 1,100 business owners across 14 markets worldwide, including 200 respondents in the UAE. 

Survey findings showed that optimism among HNW investors across the globe has dipped to early-pandemic levels due to continuing concerns about the economic and market impact of inflation and the war in Ukraine.

Nearly three out of four investors are now worried about making bad investment decisions in the current environment and are holding onto cash.

UAE findings

In the UAE, investors aren't just concerned about inflation and the likelihood of an economic recession, they are also worried about cybersecurity risks.

"UAE investors remain vigilant as volatility, inflation pressures and geopolitical risks continue to contribute to a sense of uncertainty,” said Ali Janoudi, Head of UBS Wealth Management for the Middle East, Turkey and Africa.

Despite their concerns, investors still see potential opportunities to make money. Should the markets decline further, investors are likely to invest in energy security, smart mobility and automation/robotics as part of their long-term strategy.

Business owners

While investor optimism has dropped, entrepreneurs are still optimistic, particularly about the regional economy. 

Overall, the optimism among individuals with businesses has rebounded after recording the largest decline in two years.

According to UBS, most business owners plan to continue hiring and invest in their business over the next 12 months. Nearly half of business owners also expect to raise prices in the next six months, as they take into account rising materials costs and wage inflation concerns.

(Reporting by Cleofe Maceda; editing by Brinda Darasha)