UBS Investor Sentiment: World’s Wealthy Sticking With Stocks Despite COVID-19, With Close To Half Of UAE Respondents Planning To Invest Even More
Wealthy investors and business owners are remaining optimistic aboutthe longer term despite a sharp dip in short-term confidence due to the coronavirus,according to the new quarterly Investor Sentiment survey from UBS, the world’s leading global wealth manager.
According to the survey, which polled 4,108wealthy investors and business owners in 14 markets in April, 70% of respondents said they are optimistic about the long-term economic outlook for their region, virtually unchanged from the prior survey three months previously. Forty-six percent expressed optimism on the short-term outlook, down from 67%.
The share of investors expressing short-term optimism fell most sharply in the US, from 68% to 30%, and least sharply in Europe outside Switzerland, from 58% to 50%. In Asia, it fell from 71% to 55%; in Latin America, from 60% to 49%; and, in Switzerland, from 47% to 28%.
Globally, 47% of investors expect to keep their stock market investments the same in the next six months, while 37% plan to invest more. Additionally, 23% believe now is a good time to buy stocks, and another 61% see an opportunity to buy if stocks fall another 5-20%.
In the UAE, 33% of investors don’t plan any adjustments to their portfolio, while 43% plan to invest more. However, only 13% believe now is a good time to buy stocks, with 69% waiting to buy until stocks drop more.
In general, business owners across the globeare also positive on the longer-term outlook and express a continued desire to invest in their own firms. Sixty-one percent are optimistic about their businesses, down from 73% in the prior survey. Twenty-sevenpercent plan to hire more versus 17% who plan to downsize. The gap between those planning to hire and downsize was biggest in Latin America (+22 percentage points) and lowest in Switzerland (+2 percentage points).
Both investors and business owners cited COVID-19 as their top concern, at 57% and 60% of respondents, respectively.
Paula Polito, Divisional Vice Chairman, UBS Global Wealth Management, says: “Ninety-six percent of investors worldwide say COVID-19 has affected their lifestyle. Most are practicing social distancing, avoiding crowds, and refraining from travel. However, they have diverging views on when the worst of the crisis will be over, with a third citing June, a third citing the fall, and a third citing the end of the year or beyond.”
Ali Janoudi, Head of Middle East and Africa, UBS Global Wealth Management, says: “In close to 50 years that we’ve been present in the Middle East, we have seen numerous crises. While the current pandemic is of course uncharted territory, we know this is a region that has successfully adapted to dramatically changed circumstances in the past. We remain deeply committed to this strategic growth market.”
Niels Zilkens, Head Arabian Gulf, UBS Global Wealth Management, says: “COVID19 has clearly had an impact on the local economy and understandably clouded our clients’ shorter term view on economic perspectives. However, we also know that our local clients and prospects are resilient and fundamentally optimistic, with 43 percent even considering investing more.”
US
Only 35% of US investors are bullish on US stocks over the next six months, down from 64% three months ago. However, US investors are the most likely to believe now is a buying opportunity (at 33%). Forty percent of US investors believe COVID-19’s worst impact will be over bythe end of June, with a further 28% saying by the end of September.
Latin America
Forty-two percent of Latin American investors plan to invest more in the next six months – higher than the global average (37%). Forty-seven percent feel optimistic about their stock market, the second highest percentage worldwide, while 42% feel COVID-19’s worst impact will be over by the end of June, the most of any region.
Europe
Forty-six percent of European investors feel optimistic about European stocks, down from 57%, but43% plan to invest more – the most of any region. Forty-one percent expect COVID-19’s worst impact will be over by the end of June, the second highest percentage globally.
Switzerland
Like their peers in the rest of Europe, Swiss investors grew more cautious. Thirty-five percent were planning to invest more in the next six months, while 30% felt COVID-19’s worst impact would be over by the end of June, below the global average.
Asia
Fifty-one percent of Asian investors were bullish on the six-month outlook for stocks in their region – the highest of any region surveyed. Eight-five percent said the virus would be over by the end of either June, September, or December, one of the highest percentages globally.