Investors in the UAE are becoming even more uncertain when it comes to making investment decisions, according to the second wave of the Friends Investor Attitudes Report commissioned by Friends Provident International (FPI).
The report shows that UAE investors remain sceptical about investing in current market conditions and still prefer to put their money in low-risk assets. The report has revealed a significant increase in the percentage of respondents who feel that gold is the most suitable asset class in the current climate, gold is closely followed by cash.
The Friends Investor Attitudes report is a quarterly report that FPI is using to build the Friends Investor Attitudes Index which will become a reliable indicator of investor attitudes.
Generated through online interviews conducted by ICM Research in three of FPI's key markets – UAE, Hong Kong and Singapore – the report's findings detail the investment strategy of over 2,750 respondents, their current view of investment market conditions, their attitude towards risk and their investment time horizon.
In terms of investment strategies, 22% of respondents in the UAE said they are investing for the short-term, 11% said they were investing for the long-term and 21% said that they are not interested in investing, or would not invest in the current climate, highlighting the continuing uncertainty in investor sentiment.
When asked which investment vehicles they prefer, respondents selected endowments – or savings plans – as their first choice, with 52% of those surveyed preferring them over government bonds, fixed term deposits, annuities and corporate bonds.
Consistent with wave 1 of the report a large proportion (62%) of people surveyed in the UAE believes that it is important to use ethically screened investments, including Sharia'h compliant products.
Matt Waterfield, general manager (Middle East and Africa) at Friends Provident International said:
"Overall, the Friends Investor Attitudes Index has seen a slight improvement for the UAE and now stands at 7 – up from 6 in the first wave. This statistic, combined with similar overall results from the first wave is a sign that the region's investment markets could be beginning to stabilise, without any drastic shifts in either direction.
"It is interesting to see the increased preference for gold as a safe haven asset. This is consistent with the strength of the gold price over the last quarter."
However, there has been a reduction in the percentage of UAE investors who believe the investment market improved over the preceding six months and a significant reduction in the percentage of those who think markets will improve over the coming six months.
Commenting on this reduction in confidence Matt Waterfield added:
"It just goes to show that investor confidence is a fragile thing. Whilst our research shows that the markets are becoming more stable, investors appear even more uncertain about the future, and are continuing to invest in 'safe haven' assets."