Sunday 25, February 2018 by Jessica Combes

Geopolitics most significant challenge facing regional investment industry


CFA Society Emirates unveiled the results of the annual Middle East Societies Market Sentiment Survey, a quarterly snapshot of the 2018 outlook for investment management, according to CFA charterholders from the UAE, Bahrain, and Kuwait. 

Released ahead of the first MENA Investment Congress, hosted by CFA Society Emirates in Abu Dhabi on 22 February 2018, the survey is an indicator of sentiment among investment management professionals in the region. 

Respondents believe that global and regional investors will continue to keep an eye on two key factors: geopolitical developments in the Middle East and in investment opportunities in Saudi Arabia. Economic diversification, efforts to remove barriers to entry and the positive impact of continued fiscal prudency on liquidity have brought the latter market into sharp focus for regional and international investors alike. 

“The regional investment management industry is entering an era of innovation and transformation, and professionals are required to quickly adapt to changing industry dynamics. Interestingly, most CFA members who participated in our annual survey this year said that their firm was not investing in AI capabilities. This is despite global trends which suggest that there are increasing levels of AI adoption in investment management due to the cost and efficiency benefits which technology affords. The statistics in this survey suggest that the region is bucking the overall trend, and AI will not have significant implications locally in the near-term,” said Amer Khansaheb, CFA, president of CFA Society Emirates.

The top five findings from the survey are:

  • Respondents indicated that regional equities and venture capital/private equity will be the most attractive asset classes in the Middle East during 2018.
  • Around 70 per cent of CFA members said that their organisation was not investing in Artificial Intelligence for internal purposes.
  • Improving ease of doing business and continued fiscal prudency from the government to improve liquidity conditions are the top areas of interest for GCC and international investors in regards to Saudi Arabia.
  • Greater transparency of investment decisions and accountability through corporate governance is the most important factor for the development of the investment management profession in the region.
  • A total of 70 per cent of respondents said that geopolitics is the most significant challenge facing the regional investment industry.

As our members highlighted in the survey, improving corporate governance is a crucial element in ensuring the sustainable growth of the region’s financial services market since this will put interest the interests of investors first, whilst aiming to generate returns in an ethical and transparent manner. At CFA Society Emirates we are committed to upholding the highest standards of ethics in order to contribute to the development of the regional investment management industry, through greater market transparency and professionalism which increases competitiveness,” said Khansaheb.

In November 2017, CFA Institute confirmed its intent to open a CFA Institute office in the Middle East, in collaboration with Abu Dhabi Global Market (ADGM). The new office is set to open in Abu Dhabi this year, and will serve the Middle East and North Africa region to advance the CFA Institute mission to lead the investment profession by promoting the highest standards of ethics, education and professional excellence for the ultimate benefit of society.


Features & Analyses