Stock - DFM / Dubai Financial Markets
UAE's on track to rack up an impressive GDP growth number in 2023. And the reforms that keep on happening should resonate with global investors. Image Credit: Bloomberg

A month into 2023, I find myself looking back at 2022 in awe. There was a war in Europe. There was inflation we hadn’t seen in years, if not decades. There were interest rate hikes by central banks, institutions that most of us had forgotten about.

In the first six months of 2022, the S&P 500 fell 21 per cent, becoming the worst six-month start to a year since 1970. The euro hit its lowest level against the USD in 20 years, falling to parity with the dollar for the first time since 1999. And that’s not all - digital currencies had lost most of their value in a matter of one year. In fact, they lost about $2 trillion since 2021.

There was certainly global gloom and doom. But it wasn’t like this everywhere.

Regional strengths

In this unstable global scenario, the region, particularly the UAE continued to defy the global context and set benchmarks, including a record-breaking number of IPOs, which were oversubscribed. What’s more, we witnessed IPOs and listings both from the government and private sector, in industries ranging from utilities to health care.

The IMF in its annual forecast also expects the UAE’s non-oil economy to grow by about 4 per cent in 2023 and accelerate over the medium-term as ongoing reforms are implemented. This figure will make the UAE outpace Saudi Arabia (3.7 per cent), Bahrain (3 per cent), Kuwait (2.6 per cent) and Qatar (2.4 per cent).

So what about 2023?

I’ve been in the financial industry for almost 30 years now, living the markets every single day. And while 2022 was shock and awe, 2023 will probably be a year of indecision. A seasoned investor knows that markets change, economies go through cycles, currencies rise and fall. Neither bull nor bear markets last forever.

Same with recessions and booms. But it’s certainly good to have nerves of steel.

Investors and traders will be trying to test the ground here and there. There might be volatility and no clear direction. Volatility might be quite high, and investors might not have a clear idea of what’s coming up. There might be a lot of indecision.

Local twist

The UAE’s performance over the last year has not gone unnoticed by investors and venture capitalists. The country is working hard to be a strong regional financial powerhouse and gain more footing on the global scale. This will certainly continue as we see more people and business flowing in search of better conditions, quality of life or access to markets.

Many will be eyeing Dubai’s Economic Agenda D33, a 10-year growth plan unveiled recently. Here are some key goals to watch out for:

  • Support 100 transformative projects;
  • Add Dh32 trillion to the economy;
  • Double foreign trade to Dh25 trillion;
  • Trade with 400 new cities;
  • Scale-up 30 private companies;
  • Lead them to global unicorn status;
  • Bring 65,000 Emiratis into the labor market;
  • Attract the world’s best universities;
  • Double tourist numbers to 40 million; and
  • Place Dubai in Top 3 cities.

New to the financial world? Keep these tips in mind:

How much

It’s not a bad idea to hold in some finances in case of an emergency, but it doesn’t take as much as you think to start investing. A fixed monthly portion is enough to get you started. Some brokers don’t even demand a minimum deposit, so do your research.

Which tool to use

When investing, it is quite important to choose a platform that is transparent, easy to use and, at the same time, offers learning tools to help you make the best informed decisions as possible. This way you can make sure you can learn as you go, if you need to.

What to choose

Your grandma might have been telling you this. ‘Don’t put all your eggs in one basket…’ This is very true. Diversification is one of the best strategies you can take. And remember, as a rule of thumb, the sooner you need the money back in your pocket, the less risk you should take.

A basic tracker fund is also a good way to start out in the financial world. What they do is follow the performance of a stock market, and so can provide you with the information you need on companies you have heard and know of.

Understand the fee structure. Research and compare before you choose.