Asset managers in the Gulf will remain “somewhat resilient” to the twin-shocks of the coronavirus-induced economic slowdown and volatility of oil prices, due to their strong track record and continued relationship with an affluent client base, according to Moody's Investors Service.
Despite economic headwinds, established players in the industry have seen a continued inflow of funds since the beginning of the pandemic, according to the ratings agency. Larger managers with a diverse mix of assets and strong digital platforms are better positioned than the smaller players.
Assets under management have dropped since mid-February, which is largely a reflection of lower market valuations. However, positive fund inflows for GCC asset managers contrasts with net outflows for some of their western counterparts.
"The GCC [asset management] sector's resilient inflows partly reflect its exceptionally strong performance last year, but we expect risk appetite to remain subdued and some diversification away from the region," Vanessa Robert, a vice president at Moody's, said in a research note on Monday.
In the future, inflows for asset managers will be supported by “bespoke mandates from a range of affluent clients, including high net worth individuals, family offices, sovereign wealth funds and other government institutions, which generally have higher risk tolerance and [a] longer investment horizon,” Ms Robert said.
Asset managers in Saudi Arabia and the wider GCC region have grown their AUM in recent years, despite “heightened geopolitical tensions and oil price-related growth fluctuations”, Ms Robert said.
Given the current economic backdrop, Moody’s expects risk appetite to remain subdued and sees regional money managers diversifying their asset portfolios going forward.
GCC asset managers have already reported a shift in client assets towards lower risk strategies such as money market investments, fixed-income and sukuk since the start of the coronavirus crisis.
Some investors have also redirected equity investments towards companies with stronger cash positions, and industries with more predictable cash flows.
“We expect GCC investors to maintain a risk-averse stance in the months ahead," Ms Robert said. "Flows into equities and multimarket funds are likely to fall furthest amid continued market volatility."
Moody's expects investors to diversify their portfolios "away from the region to reduce risk, [as] currently the [asset management] sector is highly concentrated within the region".
The ratings agency also expects demand for alternative investments including the real estate sector to continue to be a key feature of the regional market.
The outlook for investment flows into the GCC asset management industry in 2020-21 is “somewhat uncertain”, however it will pick up momentum as the pandemic comes under control and economies bounce back.
Smaller asset managers, which typically do not benefit from the support of larger parent companies, will be more vulnerable to increased competition during the pandemic.
“As a result, we expect some consolidation within the industry, although this is likely to be slow,” Ms Robert said.
The specs
Engine: 2.9-litre, V6 twin-turbo
Transmission: seven-speed PDK dual clutch automatic
Power: 375bhp
Torque: 520Nm
Price: Dh332,800
On sale: now
COMPANY%20PROFILE
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GIANT REVIEW
Starring: Amir El-Masry, Pierce Brosnan
Director: Athale
Rating: 4/5
The specs
Engine: 3.8-litre V6
Power: 295hp at 6,000rpm
Torque: 355Nm at 5,200rpm
Transmission: 8-speed auto
Fuel consumption: 10.7L/100km
Price: Dh179,999-plus
On sale: now
The%20specs
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Scoreline
Saudi Arabia 1-0 Japan
Saudi Arabia Al Muwallad 63’
Afro%20salons
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CHATGPT%20ENTERPRISE%20FEATURES
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Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster with a decades-long career in TV. He has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others. Karam is also the founder of Takreem.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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UAE currency: the story behind the money in your pockets
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
At a glance
Fixtures All matches start at 9.30am, at ICC Academy, Dubai. Admission is free
Thursday UAE v Ireland; Saturday UAE v Ireland; Jan 21 UAE v Scotland; Jan 23 UAE v Scotland
UAE squad Rohan Mustafa (c), Ashfaq Ahmed, Ghulam Shabber, Rameez Shahzad, Mohammed Boota, Mohammed Usman, Adnan Mufti, Shaiman Anwar, Ahmed Raza, Imran Haider, Qadeer Ahmed, Mohammed Naveed, Amir Hayat, Zahoor Khan
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
Quick%20facts
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Turkish Ladies
Various artists, Sony Music Turkey
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
PREMIER LEAGUE TABLE
1 Man City 26 20 3 3 63 17 63
2 Liverpool 25 17 6 2 64 20 57
3 Chelsea 25 14 8 3 49 18 50
4 Man Utd 26 13 7 6 44 34 46
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5 West Ham 26 12 6 8 45 34 42
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6 Arsenal 23 13 3 7 36 26 42
7 Wolves 24 12 4 8 23 18 40
8 Tottenham 23 12 4 8 31 31 39
The five pillars of Islam
Match info
Premier League
Manchester United 2 (Martial 30', Lingard 69')
Arsenal 2 (Mustafi 26', Rojo 68' OG)
UAE currency: the story behind the money in your pockets
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