Regional investors look to gain growth stimulus in 2020
LOW UNEMPLOYMENT RATES WILL DRIVE GROWTH IN GLOBAL MARKETS
As stock markets look to end a tumultuous 2019 on a high note, analysts worldwide foresee a story of stability at home and abroad in 2020 which investors should hope to bank on.
The bygone year was dominated by US-China trade tensions, fears of a hard Brexit and a global slowdown, but indices worldwide are set to close at record highs as concerns around these geopolitical risks eased, setting a positive tone for the year ahead.
The synchronised easing by 23 central banks since mid2019 too supports a view among economists that global activity will stabilise in the first half of 2020, although signalling that the pace of recovery may be slow at first.
“Global equity markets in 2020 are likely to have a muted first half or even some possible declines as economic growth globally slows somewhat,” said Anita Yadav, Chief Executive at Dubai-based Century Financial.
“However, boosted by easing monetary policy, possibility of fiscal stimulus from governments, possibility of favourable trade resolution between the US and the China, and general cyclical uplift in consumer demand due to low unemployment rates, we expect markets to remain stable or improve in the second half of the coming year.”
Bruce Kasman, Global Head of Economic Research at JP Morgan, too agreed that market growth next year will start at a “subpar” pace, before it picks up by mid-2020. “Political drags will likely fade and business sentiment should firm with a trade deal and more clarity on Brexit.”
Boost for local investors
Analysts said regional investors are closely monitoring macro trends and are set to gain as they spot the right opportunities to invest in.
“In the UAE, we expect equity market to largely remain stable,” Yadav said. “Though lower interest rates and Expo 2020 related
Global equity markets in 2020 are likely to have a muted first half or even some possible declines as economic growth globally slows somewhat.” Anita Yadav | Chief Executive, Century Financial
activities are likely to provide good boost to the non-oil sector economic growth in the country, pressure on oil prices remain, which in turn will probably see government spending to remain constraint.”
Dubai property broker Appello Real Estate said the coming year will see a flurry of activity in the UAE property market as new developments come to fruition, new regulations begin to have a positive impact, and the country gears up for a huge influx of investors for Expo 2020, starting in October.
Also, the UAE’s fintech sector is poised to enter 2020 with robust deals as more investors and start-ups explore investment opportunities. The UAE is home to one third of fintech start-ups in the Middle East and North Africa (MENA) and the number of fintech companies in the region are expected to reach 1,845 by 2022, a survey indicated, surging from 559 in 2015.
Interests of elderly
The third quarter of 2019 witnessed continued funding of Mena-based start-ups and the figures are still ahead of 2018, with a slight increase in the number of deals as well, said Philip Bahoshy, the founder and CEO of MAGNiTT, a platform that connects Mena entrepreneurs with investors.
An ageing demographic is another crucial area for investors looking to reap good returns in the long run, with the number of 65 year olds and above currently overtaking the number of five year olds for the first time in history.
“As investors, this means that in order to get favourable return on investments, you will need to invest in areas that elderly people have interest in,” said Yadav, when speaking earlier at the ‘Global Investor Outlook 2020’ in Dubai.