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Wealthy investors are “deeply concerned” about the impact of the war in Ukraine and are likely to make changes to their portfolios should financial markets continue to decline, according to a new survey by UBS.
The investor sentiment study, which polled more than 2,500 high-net-worth investors and 1,000 business owners across 14 markets globally, found that many are now more likely to shift or increase their holdings in gold, domestic stocks and oil.
Investors still consider technology and energy as among the top sectors to invest in, while those who own businesses are not hiring and investing aggressively and are instead focusing on higher employee benefits, IT spending and upgrading talent.
“Investors globally are clearly concerned about the personal and economic impacts of one of the largest humanitarian crises in decades,” said Iqbal Khan, President of UBS Europe, Middle East and Africa and Co-President of UBS Global Wealth Management.
UAE findings
In the UAE, the top concerns for investors are geopolitics, market downturn and global trade conflict, with 85 percent saying they expect the war to increase inflation.
More than a third of investors (33 percent) said they would increase investments in case of further stock market declines, while another 30 percent said they would shift to different sectors.
As for investment themes and top sectors, the most attractive in the UAE at the moment are real estate, sustainable investing and healthcare.
Global results
Overall, 92 percent of investors said they expect the war in Ukraine to fuel higher inflation, with more than half expecting inflation to last longer than one year. The majority (66 percent) are also expecting higher energy prices, while 64 percent foresee more global instability and 60 percent are worried about more cyber attacks
Among business owners, the sources of concern have increased, with geopolitical instability joining rising material costs, tax increases, heightened regulations and supply chain issues. As a result, confidence in their own businesses for the next 12 months declined by 11 percentage points.
“The impact of the war in Ukraine and rising inflation have forced business owners to again adapt to an unprecedented and unpredictable situation, after managing the effects of the pandemic on their business,” said Tom Naratil, President of UBS Americas and Co-President of UBS Global Wealth Management.
(Reporting by Cleofe Maceda; editing by Seban Scaria )
