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Emerging markets still most popular asset class for MENA investors

United Arab Emirates: Thursday, September 29 - 2011 @ 10:56

Three-quarters of those surveyed will be investing in the popular asset class in the next twelve months, in line with the percentage who implied as much in the 2010 prequel Gulf Professional Adviser Survey.

The sample of 225 senior executives, analysts and financial advisers from retail banks, private banks, independent firms, investment companies and family offices, also revealed an appetite for infrastructure funds and commodities and a hesitance towards investing in hedge funds and private equity.

Although sentiment amongst those surveyed was positive that the Shariah-complaint investment space would grow in the next twelve months, few will be backing this impetus with their clients’ funds.

Regulatory structures a challenge

When questioned on challenges facing the financial services industry in the Middle East, a substantial 75% agreed that the regulatory structure was the key hurdle, ahead of political volatility.

Opportunity for International Asset Management Companies

84% of advisers surveyed for the MEIP reported that they regularly require the services of international asset management companies or international life companies. In comparison, less than half of the same sample require the services of regional firms.

In a notoriously opaque space, the report has also attempted to quantify the market opportunity in terms of value. The study concludes that gross sales of investment funds in the GCC and MENA countries are several times bigger than figures previously published by other sources, this is due to indirect business written by international life companies and private banks via offshore centres.

Nigel Sillitoe, CEO of Insight Discovery, comments, “In addition to the appetite for emerging market equity products, one of the most important findings in this year’s study is the advisory market’s concerns about the changing regulatory environment in the Middle East. This can only be seen as a positive sentiment which may add pressure to the call for the introduction of some new best practices and greater transparency in the region.”

Confirming that the Middle East remains a growth opportunity for financial services companies, this year’s MEIP study attracted sponsorship partners from some of the biggest names from the world of international asset management companies, including: J P Morgan Asset Management, Fidelity, Franklin Templeton, HSBC Asset Management, Russell Investments and UBS Asset Management. Regional partners include asset management company, Mashreq and the Qatar Financial Centre Authority.

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Thursday, September 29- 2011 @ 10:56 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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