MEIP: Advisers cutting GCC allocations
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A year ago, most advisers were looking to maintain or increase their allocations to the various asset classes. In late 2014, significantly larger numbers than previously are looking to reduce positions, Middle East Investment Panorama (MEIP) finds. Advisers are reducing equity investments, but also allocations to Shariah-compliant equities, sukuks, gold, and various alternative investment strategies.
A further downward revision of global economic growth forecasts by the International Monetary Fund (IMF); an escalation of the sectarian conflict in Iraq and Syria; slippage in the price of oil; volatility in emerging markets and the fact that the US Federal Reserve has ended its asset purchase programme and is considering to increase the federal funds target from the current level of 0.00-0.25 percent. All of this has translated into a tougher investment environment for advisers Insight Discovery surveyed through Q3, 2014 for its MEIP 2014. Times have become more uncertain over the last 12 months, the research firm finds.
GCC allocation cuts
As was the case in late 2013, some 40-50 percent of the advisers are looking to lift their clients’ allocations to equities this year. Also unchanged – at 25 30 percent – are the numbers of advisers who expect to lift their clients’ allocations to the various kinds of fixed-income assets. Relative to last year, the numbers of advisers who are looking to redeploy their client’s cash has surged from 18 percent to 39 percent, states the report.
Over the year to 30 September 2014, Morgan Stanley Capital International (MSCI) indices for Qatar rose by 22.66 while the UAE’s equity market was up by 42.2 percent.
“However, we do not think that the promotion of Qatar and UAE markets has had much impact on the attitudes of advisers. In late 2013, we found that 49 percent of advisers were looking to lift their clients’ allocations to GCC region equity strategies..
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