By Shane McGinley
Investor confidence hit by Dubai World uncertainty; faith in real estate sector low.
GCC investor confidence fell for the second month in a row and the real estate sector is forecast to decline even further over the next six months, according to research from a Dubai-based investment bank.
SHUAA Capital’s GCC Investor Confidence Index measures investor confidence on a scale from 0 to 200. A number greater than 100 represents positive sentiment while a number lower than 100 represents negative sentiment.
The index found that confidence levels in the six-nation GCC declined for the second month in a row, with February down 8.9 points on average. The report said that uncertainty around the Dubai World debt restructuring was at the heart of investors’ continued pessimism.
The UAE declined the most and dropped 11.7 points, followed by Saudi Arabia (down 8.7 points) and Qatar (down 5.8 points). The UAE Index now stands at 84.4 points, below the critical 100 point mark and just 1.9 points off of its all-time low following the Dubai World “standstill’ announcement in late November last year.
UAE investors were also less enthusiastic about the economic prospects for the next six months, with only 17.5 percent predicting the outlook will improve and 25 percent believing it will worsen.
By comparison, in Saudi Arabia 42 percent of investors surveyed believe things will improve and only 2.5 percent foresee a decline. On average, 30 percent of investors in the GCC see economic conditions improving over the next six months.
In terms of individual sectors, 47.5 percent believe the real estate and construction sectors will decline further over the next six months.
“The GCC is operating under a cloud of uncertainty as the professional investment community awaits the next move regarding the Dubai World restructuring efforts,” said Oliver Schutzmann, chief communications officer of SHUAA Capital and author of the report.
“As such, it comes as no surprise that investors are erring on the side of caution and are not over confident towards the UAE and wider GCC.”
I love this article. probably one of the few true articles that will make it for public consumption. Suffer the greedy.
Amazed and flabbergasted at how you comfortably allow yourselves to drop such an economically-sensitive headline over what is clearly in my opinion some really questionable research... Did you ever care about verifying whether this survey is representative enough and cared to put it all in perspective for us your esteemed readers?? SHUAA is a respectable organization but it doesn't automatically mean that all its personnel and operating procedures are 'crystal clear'!? I'd really be surprised if this so-called investor 'mood' result didn't just emanate from a couple of hundred blurry answers and a nicely inflated mechanism... It'd be nice if you attempted to gather the names and figures, and run a small check; I'm sure you would find the result very interesting... CREDIBILITY, gentlemen, is what news is all about; Raise the bar!!
Skeptica's comment seem to be directing ire towards the reporter, when clearly s/he is feeling anger towards SHUAA. I think SHUAA's reports are reliable, and the report author is quoted. I'm sure you could talk to him, and to suggest that GCC investors are feeling a little wary is hardly off the mark, is it? You have to move on from taking a factual report as some sort of personal slur. I, for one, look forward to reading SHUAA's findings next month. But they only represent the opinion of a small handful of people. I'm sure we can all make our own judgements based on all the information available to us at any time.
The whole point of my comment is about credibility, which Willster clearly doesn't seem too concerned about. No one is disputing the general GCC investor sentiment - hell, my 5 yr-old can tell you that - but the concern here is publicity around 'shady surveying' (this is not an a typical document produced by shuaa's research department), and subsequently a questionable sense of authority...
@Skeptica do you care to explain how this is any more questionable than the press releases, I mean "research", coming from real-estate sector companies that claim that turnaround is coming and the market has bottomed... First, it is already established that AB will publish anything sent to them by a company (or at least they will not challenge anything they publish). Second these guys at least have some methodology something we can not say about any of the CEO-talk from RE companies that they publish routinely. Confidence polls have been around for a long time, I can not talk about how this one was executed, but at least you have a differential across countries that you can use to gauge expectations. If you do not like the news, that is another story.