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Standard Chartered reveals 27% of UAE investors changing strategy due to high global inflation

© Omar Bakri

The changes in investment preferences of more than 15,000 emerging affluent, affluent, and high net worth (HNW) investors in 14 nations, including the UAE, are examined in Standard Chartered’s Wealth Expectancy Report 2022, along with the ensuing moves in key asset classes. According to survey findings, 61% of local investors are more actively managing their capital and altering their investment philosophies in light of the current economic difficulties.

Inflation risks on the horizon

The top three worries for investors in the UAE were inflation (30%), the possibility of a recession (21%), and an unsteady global economy (20%). International investors are also concerned about the global economy (22%), a recession (27%), and rising inflation (34%).

Local investors have made financial adjustments over the previous year, including cutting back on spending (29%) and reevaluating their portfolios (27%), which will cause changes in the key asset classes.

61% of investors worldwide, compared to 71% in the UAE, want to lower their cash holdings in order to outperform inflation. According to investor reactions, Standard Chartered forecasts that global cash allocations would decrease from 26% in 2022 to 15% in 2023.

As market volatility rises, investors are also reevaluating their equity holdings, albeit this asset class will still play a significant role in portfolios. According to survey results, among those who are currently invested in stocks, the allocation of equities in investor portfolios in the UAE is expected to decrease from 10.1% to 6.9% during the course of the following year.