Optimism among high-net-worth investors dipped to early-pandemic levels on continuing concerns about the economic and market impact of inflation and the war in Ukraine, according to the latest quarterly Investor Sentiment survey from UBS. The survey of over 2,800 investors and 1,100 business owners across 14 markets found that investors are focused on their retirement savings, with some holding off on making big purchases. In the UAE, views of 200 investors and business owners were included.
With investor optimism waning, nearly three out of four investors are now worried about making bad investment decisions in the current environment and are holding onto cash. Despite this, they see potential investment opportunities if markets decline further, and are highly interested in energy security, smart mobility and automation, robotics as long-term investment themes.
“Investors across the globe are concerned about the combination of higher inflation, the war in Ukraine and the potential for a recession,” said Iqbal Khan, President of UBS Europe, Middle East, and Africa and Co-President of UBS Global Wealth Management. “In challenging times like this, it’s important that investors continue to seek expert guidance and perspectives to understand the environment and potential opportunities to support their liquidity, longevity and legacy needs.”
“UAE investors remain vigilant as volatility, inflation pressures and geopolitical risks continue to contribute to a sense of uncertainty. We are well-positioned to guide them through this period, and they have shown in interest in investment themes such as energy security, smart mobility, automation and robotics,” said Ali Janoudi, Head of UBS Wealth Management for the Middle East, Turkey and Africa. “Business owners in the region, while also concerned about rising prices and the cost of materials, are optimistic about the regional economy for the next year and plan to continue hiring.”
In contrast, business owner optimism has rebounded after the largest drop in two years, and most business owners plan to continue to hire workers and invest in their businesses over the next 12 months. Nearly half of business owners expect to raise prices in the next six months, driven by rising materials costs and concerns over wage inflation.
“Business owners’ increased optimism and steady focus on hiring and investing in their businesses is an encouraging sign given the current market environment, as they are a key driver of the global economy,” said Tom Naratil, President of UBS Americas and Co-President of UBS Global Wealth Management. “Thoughtful wealth management advice and solutions across business planning, portfolio diversification and exit planning will be critical for them as they navigate the market.”