Mood of gloom on economy: Survey

A Muscat-based economist said the mood reflects the negative outlook investors have about economic growth, in light of oil prices

MUSCAT: A mood of pessimism seems to have settled upon the majority of high net worth individuals (HNWI) in Oman, as many say the Sultanate’s economic state is worsening.

About 67 per cent of HNWI in Oman said the economic situation is worsening, while only 25 per cent say it is improving, as only 8 per cent of this group said there has not been any change, according to the GCC Wealth Insight Report published by the Emirates Investment Bank.

It also was reported that the majority of Gulf Cooperation Council (GCC) country HNWIs agree that the global economic situation is worsening, as 53 per cent cited political instability as one of the major reasons,and 45 per cent blaming the economic woes on the decline of oil prices.

Negative outlook

A Muscat-based economist said the mood reflects the negative outlook investors have about economic growth, in light of declining oil prices.

“Investment is a trade-off between risks and returns. At present, it would appear natural that the expected returns from the market may not adequately compensate the risks in equity investment. But, it should also be borne in mind that economies go through boom and bust cycles,” the economist said.

The economist also added that, at the moment, commodi- ties are in a downward trend triggered by declining prices of most commodities,such as oil, steel, coal and others.

Meanwhile, Anchan CK, an investment advisor, said that HN-

2016 WIs expect to increase the proportion of their wealth invested into their own businesses and in real estate, with a belief of seeking greater control in managing their investments.

“In Oman, most HNWIs prefer keeping their assets closer to home. The investment world is becoming increasingly complex with wider choices, whether geographical or selecting asset classes in or- der to deliver desired returns,” the investment advisor added. Commenting on the regional economic situation, Khaled Sifri, CEO of Emirates Investment Bank, said, “With the global economy currently going through a period of significant volatility and with depressed oil prices, it comes as no surprise that this year’s report is more sombre than in previous years.”

Confidence in markets

“However, confidence in markets, such as the UAE and Qatar, remains very strong and, when taking a longer-term view, HNWI’s say they are optimistic about the Gulf region, as a whole. Consistent with previous years, the majority of GCC HNWI investors prefer to invest in the region over global markets, despite any geopolitical concerns,” Sifri added.

The GCC Wealth Insight Report 2016 is based on a survey of HNWIs from the United Arab Emirates, Qatar, Kuwait, Saudi Arabia, Oman and Bahrain. Faceto-face interviews were held in each country between September and November 2015 among nationals, as well as expatriates. HNWIs are defined as individuals with US$2 million or more in investable assets.