Investors in the UAE are still cautious when it comes to making investment decisions, according to a new report commissioned by Friends Provident International (FPI).
The Friends Provident International Investor Attitudes report shows that UAE investors are sceptical about investing in current market conditions and currently prefer to put their money in low-risk assets with government bonds, cash and gold the favoured investment vehicles.
The FPI Investor Attitudes report will be a regular quarterly publication and the intention is to build an index that over time becomes a reliable indicator of investor attitudes.
Generated through in-depth surveys conducted by ICM Research in three of FPI's key markets – UAE, Hong Kong and Singapore – the report's findings detail the investment strategy of over 2,750 respondents, their current view of investment market conditions, their attitude towards risk and their investment time horizon.
In terms of investment strategies, 20% of respondents in the UAE said they are investing for the short-term, 12% said they were investing for the long-term and 22% said that they would never invest in the UAE, or would not invest in the current climate, highlighting the uncertainty in current investor sentiment.
When asked which products respondents currently prefer, endowments – or savings plans – were the first choice, with 55% of those surveyed preferring them over government bonds (43%), Fixed Term Deposits (42%), annuities (34%) and corporate bonds (25%).
Perhaps unsurprisingly a large proportion (62%) of people surveyed in the UAE believes that it is important to use ethically screened investments, including Sharia'h compliant products.
Matt Waterfield, general manager (Middle East and Africa) at Friends Provident International said:
"The region's investment markets are still quite unpredictable, and this is reflected in investor sentiment. Attitudes have certainly changed over the past year and investor caution has resulted in savings plans becoming the top choice of investment.
"When planning medium to long-term investments, investors are being more selective and are carefully researching their options. This is a very good practise to undertake. When managed properly there are still good opportunities to invest and earn returns."
The report shows that in the UAE, almost half of Abu Dhabi based respondents said they are still happy to invest in the region, whereas less than one third of Dubai respondents said the same.
Interestingly, the research highlighted that 57% of investors in the UAE rely on friends and/or family for financial advice.
Whilst caution seems to be the current trend in the UAE, the research does indicate that investor confidence is likely to return soon, with more than half of those surveyed (53%) of the opinion that market conditions will improve within six months. Only 12% of those questioned expected it to worsen.
Commenting on this finding, Matt Waterfield added:
"Optimism amongst investors in the UAE is improving and residents are becoming a little more bullish about investment markets. This in turn means there is an even greater need for careful financial planning."
To view a copy of the report please go to www.fpinternational.com/me
