Dubai: There is growing optimism regarding growth prospects for 2012 among Middle East intermediaries and investors, according to the latest poll carried out by Invesco Asset Management Limited.
The results of the poll conducted during Invesco's sixth annual Dubai Investment meeting, which was attended by 329 intermediaries, reveal that more than two fifths (38 per cent) of the respondents feel positively or very positively about growth prospects for 2012. One in five (19 per cent) is generally being instructed by their clients to buy in these volatile market conditions.
"The fact that such a sizeable number of intermediaries are confident on growth prospects suggests there is optimism in the region for the year ahead. It is also encouraging that clients are requesting their brokers to buy rather than sell, suggesting they believe there is value in markets today and they are embracing the current environment as a buying opportunity," said Nick Tolchard, Head of Invesco Middle East.
A recent study by Friends Provident International (FPI) showed that the number of UAE investors adopting a ten-year-plus strategy has significantly increased.
The study shows that UAE investors are adopting longer term investment strategy, with the percentage of respondents opting for a ten-year-plus strategy almost doubling since the last survey conducted in the third quarter of 2011.
The trend suggests that individuals are taking responsibility for their future and saving over the longer term to achieve their financial goals, the study said.
"There is growing maturity among UAE investors, who — it is clear from the report — are taking a longer-term approach to investing and consequently appear less concerned about short-term market fluctuations," said Matthew Waterfield, General Manager, Middle East and Africa at Friends Provident International.
The Invesco findings showed some interesting trends in investment strategy, specifically equity income. According to the intermediary poll, nine out of ten (92 per cent) utilise an equity income strategy, demonstrating how it is integral to many Middle East investors' portfolios. Two fifths (37 per cent) use it for diversification purposes and 35 per cent as part of a total return strategy, while one in five (20 per cent) specifically use it to generate income.
In addition, almost half (43 per cent) of the respondents view dividends to be the primary driver of total returns over the long term, in terms of dividend yield (for 29 per cent of the intermediaries) and dividend growth (for 14 per cent of the intermediaries).
"Dividends are an important part of total return. Income investing is about building portfolios which exhibit above market yield and underlying dividend growth, whilst taking advantage of the opportunities that exist in a low interest world. In these uncertain times, it can make sense to invest in companies that pay dividends," said Nick Mustoe, chief investment officer at Invesco Perpetual.
