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Trading floor of Dubai Financial Market. Most UAE investors are altering their investment portfolios ahead of the upcoming US election, placing their bets on stocks in the region to outperform over the next six months. Image Credit: Gulf News

Dubai: Most UAE investors are altering their investment portfolios ahead of the upcoming US election, placing their bets on stocks in the region to outperform over the next six months, as opposed to waiting after the election to do so, a UBS survey showed.

As investors worldwide await a highly contested US election in just over a weeks’ time, 72 per cent of investors globally and 87 per cent in the UAE are considering a shift in their holdings well ahead of the US vote, a new study on investor sentiments by global wealth manager UBS, showed.

“The US elections are a global event with repercussions across the globe, including in the Middle East,” said Ali Janoudi, Head of Middle East and Africa at Switzerland-based UBS Global Wealth Management. “UAE investors are watching closely and the vast majority consider portfolio changes both ahead and after the elections, depending on results.”

Some to decide based on result

The study, which polled more than 4,000 investors and business owners across 14 markets globally in late September and early October, also showed that 62 per cent are planning to make additional changes on the basis of the election result, and not before the much-awaited November 3, Election Day.

As the world continues to fixate on the COVID-19 pandemic, UAE investors – albeit cautious of the risks surrounding the contagion – has evidently been growing increasingly hopeful of the economy’s prospects, with 68 per cent of the respondents optimistic about their region’s stocks in the short-term.

A significant 83 per cent consider the UAE as an attractive region for investment opportunities followed by the US and Europe, regions wherein 68 per cent of investors expressed confidence in for moving their money to. The study showed that investors’ optimism over their regions’ short-term economic and market prospects significantly increased in the past few months, mainly in the US and Switzerland.

Upbeat view on economy, markets

Latin American and Asian investors are also upbeat about their economies and markets as well. Compared with their international peers, European investors are more likely to be planning to adjust their portfolios after the US elections, with 65 per cent saying they will do so, the survey further showed.

“Amid uncertainty over the US election and COVID-19, investors appear to be more positive on their own region than on the world at large,” said Iqbal Khan, Co-President of UBS Global Wealth Management. “In the period surrounding the election, we believe they should diversify globally and avoid falling prey to their own home bias.”

The overall sentiment among investors worldwide continued to be bullish, with risk appetite growing among them as they refocus their portfolios on high-risk/high-return assets, with the study showing that 61 per cent of them aim to get more yield in the next six months, while 30 per cent look to play it safer by reducing the level of risk in their portfolio by moving money to comparatively low-risk assets.

5G, hedge funds, healthcare in focus

Most UAE-based investors would consider investing in 5G networks, hedge funds and a green recovery over the next six months. The survey also showed that 66 per cent of investors are considering allocations to the healthcare sector in the short-term, while 62 per cent are considering 5G networks and 56 per cent are considering investments in a green recovery.

UBS surveyed 2,852 investors and 1,150 business owners with at least $1 million (Dh3.7 million) in investable assets – for investors – or at least $1 million in annual revenue and at least one employee other than themselves, for business owners, from September 22 to October 12, 2020.

Investors in the study were spread across 14 markets, namely Argentina, Brazil, France, Germany, Hong Kong, Italy, Japan, Mainland China, Mexico, Singapore, Switzerland, the UAE, the UK and the US.