2020 economic growth outlook looks good
despite underlying geopolitical, market risks seems to be the overriding
consensus by the experts at the symposium
Dubai, United Arab Emirates-Monday 25 November 2019 [ AETOS Wire ]
As
the World Economic Outlook projects global growth to pick up to 3.4
percent in 2020, investors in the region are keen to understand how the
dynamic business and political landscape will impact their investment
decisions next year.
Fueled by an
improvement in economic growth in a number of emerging markets including
the Middle East, investors playing in the regional economies are
closely monitoring and analysing the macro trends while spotting the
right future opportunities to invest in.
This comes
against a backdrop of the never-ending standoff between two of the
world’s leading economies - China and the United States of America,
which analysts say could slow down the much-needed growth.
Speaking about key macro trends at an investor forum dubbed Global Investor Outlook 2020,
Anita Yadav, chief executive officer, Century Financial highlighted
slowing economies and ballooning global debt, which means the central
banks will not be able to raise interest rates as a factor directly
affecting the growth.
This,
according to Yadav, is primarily because a half percent increase in
interest rate will most likely give the same results as a two percent
increase in interest rate it gave 10 years ago, simply because the
magnitude of debt is more.
“The time of
double-digit interest rates is gone. As an investor, what this means is
that the risk-return on your portfolio is probably going to be in the
low single-digit in the next decade versus what you were used to before
which was either a high single-digit or double-digit. Therefore, get
used to low return on investments,” said Yadav.
An aging
demographic is another crucial area of concern for investors looking to
reap good returns in the future. In 2018, the number of 65-year olds and
above surpassed the number of five-year-olds in the world - a first in
history.
“In another
30 years, 17 percent of the global population will be over 65. 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. Sports channels, entertainment, healthcare and things that
come with innovation and biotechnology are probably the sectors that
will do well in the long-term,” added Yadav.
Yadav also urged investors to focus on sector trends that attract and will do well with an aging population.
Speaking at
the seminar, Michael Hewson, Chief Market Analyst, CMC Markets (UK)
singled out the US elections, an agreement with China and oil prices, as
three key risk factors that will determine the global growth outlook in
2020.
“While we are
optimistic about a good economic outlook in 2020, we cannot ignore the
underlying risks that could water down the gains. We know the dollar is a
key growth driver but the upcoming US elections and the long-awaited
China-US agreement are factors that investors are keenly monitoring. On
its part, it would be on OPEC’s best interest to keep the oil prices
stable because the global economy cannot absorb higher oil prices
vis-a-vis the global growth trajectory,” said Hewson.
According to
Hewson, a Brexit deal in January will also significantly boost the
European markets, cushion economies from its burgeoning debt levels and
lack of coordinated fiscal policies within the European Union region as
well as lack of reforms in the banking sector.
Other key
macro trends that are expected to play a role in global economic growth
included oil prices, a high-yielding US dollar, fin-tech,
cryptocurrency, technology, globalisation of services and information
and age-old trade agreements that need to be relooked at.
The Global Investment Outlook 2020 seminar was organised by Century Financial at the Address Dubai Mall on 19th
November 2019 and brought together some of the UAE’s best global and
local investment experts and over 350 investors to share their views,
perspectives and knowledge/insights.
About Century Financial
Century
Financial Consultancy L.L.C. is the region’s leading investment service
provider. Since inception, Century has been committed to providing a
superior, personalized customer experience; empowering clients through
education, training, and support.
Century
operates on the world’s leading investment platform, providing a wide
range of financial instruments. Across 100 global markets, customers
have access to multiple asset classes; Currencies, Stocks, Commodities,
Indices, Metals, Energies, and ETFs. Century assists local and
expatriate clients, helping them to meet diverse trading and investment
needs.
For more information, please visit https://century.ae/
Contacts
Namita Thakkar – namita@matrixdubai.com
Krishika Mahesh – krishika@matrixdubai.com
Or call 04-3430888
