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Many high-net-worth individuals (HNWIs) in the UAE continue to have a positive outlook despite mounting concerns over the spread of the deadly coronavirus.
In a global survey among wealthy respondents, more than a third (33 percent) of those in the UAE said they intend to maintain their existing portfolio, while nearly half (43 percent) expressed plans to invest more.
The poll, conducted by wealth manager UBS, included more than 4,000 investors with at least $1 million in investable assets and business owners with at least $1 million in annual revenue and at least one employee.
The global sample was split across 14 markets that include the UAE, United Kingdom, United States, France, Germany, Hong Kong, Switzerland and China, among others.
The deadly virus that has infected more than 3 million people has sent the financial markets into a tailspin and emptied many of the world’s airports, shopping malls, restaurants, cafes, parks, beaches, museums and other public venues.
Many anxious investors have withdrawn their holdings from stocks and other investment vehicles and shifted their fortunes to safe-haven assets like gold.
As a result of all the chaos, billions of US dollars have been wiped out from the equity markets. As early as March, the S&P fell to historic lows, while the stock market in Dubai plunged 9 percent and oil prices headed south.
Despite the grim outlook, a portion of the investment community remains unperturbed. While about 3 in 10 of respondents surveyed by UBS in the UAE said they would stick to their portfolio, the majority (69 percent) are just waiting to buy until the stocks drop more.
Overall, UBS’ survey showed, the general sentiment among investors and business owners in the UAE and around the world is positive.
“[They] are remaining optimistic about the longer-term despite a sharp dip in short-term confidence due to the coronavirus,” UBS said in a statement.
Globally, 47 percent of the investors said they want to keep their stock market investments the same in the next six months, while 37 percent plan to invest more. Nearly a quarter (23 percent) believe now is a good time to buy stocks, while another 61 percent see an opportunity to buy if stocks fall another 5 to 20 percent.
Financial experts contacted by Zawya said that the best thing investors can do at the moment is to stay calm and not do anything about their investments. If they have more idle cash at the moment, they can even invest more.
“We believe that the pain is temporary and offers an attractive entry point to the investors,” Iyad Abu Hweij, managing partner at Allied Investment, told Zawya.
“Investors should remain calm, refrain from any panic selling and focus on their long-term investment objectives. One should not forget that any correction is also an opportunity for wealth creation,” he added.
About six in 10 (61 percent) of business owners said they are optimistic about their business, while 27 percent plan to hire more.
Both investors (52 percent) and business owners (60 percent), however, admitted that the coronavirus pandemic is their top concern.
“COVID-19 has clearly had an impact on the local economy and understandably clouded our clients’ shorter-term view on economic perspectives. However, we also know that our local clients and prospects are resilient and fundamentally optimistic, with 43 percent even considering investing more,” said Niels Ziikens, head of the Arabian Gulf for UBS Wealth Management.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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