Middle East intermediaries optimistic on growth prospects

Financial advisors and intermediaries based in the Middle East are positive about their business prospects through this year and beyond, according to a poll conducted by asset manager Invesco.

Invesco’s sixth annual Dubai Investment meeting was attended by 329 intermediaries, more than two fifths (38%) of whom feel positively or very positively about growth prospects for 2012. One in five (19%) are being instructed by their clients to buy in these volatile market conditions.

Nick Tolchard, head of Invesco Middle East commented:”It is encouraging that clients are requesting their brokers to buy rather than sell, suggesting they believe there is value in markets today and they are embracing the current environment as a buying opportunity.”

According to the poll, nine out of ten (92%) utilise an equity income strategy, demonstrating how integral that is for many Middle East investors’ portfolios. Two fifths (37%) use equity income for diversification purposes and 35% as part of a total return strategy. One in five (20%) specifically use it to generate income.

In addition, almost half (43%) of the respondents view dividends to be the primary driver of total returns over the long term, in terms of dividend yield (for 29% of the intermediaries) and dividend growth (for 14% of the intermediaries).

Nick Mustoe, chief investment officer at Invesco Perpetual commented: “Dividends are an important part of total return. Income investing is about building portfolios which exhibit above market yield and underlying dividend growth, whilst taking advantage of the opportunities that exist in a low interest world. In these uncertain times, it can make sense to invest in companies that pay dividends.We believe there are attractive opportunities to be found through equity income investing, and by taking a global view, the potential diversification benefits are greater.”

 

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