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Mena managers return to local equities
08 April 2013
Research by the QFC Authority shows the region’s asset managers are optimistic about 2013
Asset managers in the Mena region are returning to a risk-on approach as they increase their exposure to local equities according to new research by the Qatar Financial Centre (QFC) Authority.
The research comes from the regulator’s newly-launched Mena Asset Management Barometer that surveys asset managers in the region to give an overview of market sentiment.
A more risk-on approach was the biggest investment trend mentioned by respondents who said they were moving from fixed income to equities or re-weighting their portfolios to an equity parity or bias. More than 40% (42%) said equities will be the best performing asset class this year.
The survey also showed that more than 70% of respondents are confident about 2013. This was characterised mostly by GCC-based firms that said the combination of higher government investment and dynamic local equity markets would increase attractiveness of the six GCC states. The survey showed that asset managers see the most potential in Qatar and the UAE.
Four fifths (80%) of all respondents said the higher government spending has the biggest positive impact on local markets, while 33% said political unrest has the biggest negative impact on these markets.
Yousuf Mohammed Al-Jaida, chief strategic development officer, said amid the optimism from government investment and progress in developing the region’s financial centres, regulation is still a concern for asset managers.
“[Asset managers would like] to see more regulatory convergence. Regulation is seen as having the biggest impact on the conduct of business and as the major cost. There is strong support for Shariah-compliant finance, but again fragmented regulation is a hindrance.”