CAIRO: Egyptian and Bahraini equities have the least optimistic outlook in the region, according to a recent survey of Chartered Financial Analysts (CFA). Amid political waves and economic turbulence seeping through the Middle East, equities are predicted to be the best performing asset class this year followed by commodities, the survey found. Of those surveyed, however, 74 percent predicted that the local equity markets in Egypt and Bahrain will see a negative or flat growth this year, with Jordan and Lebanon behind at 72 percent and 65 percent, respectively. Dubai followed by 59 percent and Kuwait at 56 percent pessimism. Equities present in Qatar are projected to be the strongest performers, with Saudi Arabia and Abu Dhabi right behind to make up the most confident equity markets in the region. The Middle East Market Sentiment Survey was conducted by CFA Emirates among around 200 charter holders, which including senior portfolio managers, analysts, chief investment officers, chief executive officers, investment advisers, pension plan investment officers as well as other senior financial consultants. The members come from nine Middle Eastern countries, including Bahrain, Egypt, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia and the United Arab Emirates. The results come just as the CFA commences its Institute Middle East Investment Conference being held in Abu Dhabi for the next two days. “The survey is a useful indicator of sentiment amongst senior investment professionals based around the Middle East,” said Domluke Da Silva, an executive committee member and chair-advocacy for the local CFA Emirates society in a statement released with the survey. “Whilst it is difficult to forecast outcomes in the current environment, it shows strong belief in equities as an asset class.” The respondents in UAE seemed to have more confidence in economic growth for their business this year with a 59 percent confidence vote than others in the region at 43 percent. About 54 percent of those surveyed believe that the member countries of the Gulf Cooperation Council (GCC) should unite together in a monetary union, with more than half (56 percent) deeming this good for the region. As far as initial public offering (IPO) activities, about 36 percent of respondents forecasted an increase in activity and 48 percent said there will be no increase. Sixty-nine percent predicted an increase in debt raising activity and about 66 percent said they thought there will be more consolidation in the market as far as mergers and acquisitions are concerned. About 38 percent estimated an increase in foreign investor participation in the local and regional capital markets, while only 32 percent thought it would stay the same and 26 percent forecasting a decrease in activity. As far as institutions are concerned, 50 percent predicted the levels of institutional investor participation in the local and regional capital markets to increase, 31 percent believed it will stay the same and 16 percent predict a decrease. About 73 percent of those surveyed projected that inflation will increase across the region as a whole. “Many investment professionals are optimistic about reforms to improve the market infrastructure and this bodes well for the future,” said Da Silva. The survey also looked at the outlook towards further education and professional requirements and found that 51 percent feel that wages will not change, 42 percent believe there will be an increase and 4 percent say they will decline. A reported 48 percent thought that employment opportunities will increase while 37 percent believe it will stay the same.
