Dubai’s biggest bank favours investing in emerging markets and is bullish on potential growth of UAE stocks, as economic activity picks up in tandem with the Covid-19 vaccine rollout.
"For us, there is no question, it is emerging markets," Maurice Gravier, chief investment officer at Emirates NBD group, said on Sunday. "They move faster, they have been less affected by the crisis as a group, thanks to China in particular, and they will rebound stronger [from the crisis]."
Emerging markets assets, along with gold were the best performers for the lender in 2020. Emirates NBD has increased the weight of emerging market equities in its portfolio to 15.4 per cent this year from 9 per cent level in 2018. The weight of developed market stocks has gone down to 19.6 per cent in 2021 from 26 per cent in 2018.
"They, [emerging market stocks] are cheaper and have a huge valuation discount compared to developed markets, and they are less crowded."
Emerging markets investments are expected to return 8.3 per cent annual gains over the next 10 years, compared to 5.9 per cent returns from the developed markets, Anita Gupta, head of equity strategy at the bank said, citing Emirates NBD’s own Capital Model estimates.
Given the prospects of growth in consumption in economies such as India and China, Emirates NBD is bullish on the consumer sector and healthcare stocks. It also favours e-commerce firms, digital banks, telecoms firms with G5 capabilities and electric vehicles manufacturers. It favours financial sector stocks which stand to benefit from a recovering economy.
In terms of developed market equities, the bank is "agnostic" between the US, European and Japanese stocks.
"We see the next decade as the decade of growth for emerging markets, and healthcare and technology sectors … we see a strong upside," Ms Gupta, said. "It is a start of a super-cycle."
With valuations cheaper than the emerging market stocks, the UAE is the main pick among the GCC equities markets for Emirates NBD.
"We spoke about a waiting catalyst for the UAE and this catalyst is now in clear view," she said.
Rallying oil prices and the Expo 2020 – to be held in Dubai starting this October – along with attractive dividend yields and increased government spending, are all factors that support the investment case in UAE equities.
Emirates NBD is overweight on banking, telecoms and logistics sector stocks in the UAE, on the back of strong dividend yields and growth prospects. The lender is neutral on real estate stocks as it awaits the resumption of dividends from listed developers, Ms Gupta said.
"We have seen a very strong January for the UAE markets with both Dubai and Abu Dhabi indexes going up, and we expect further upside going into the year," she said.
"Our 2021 estimated return is 8 per cent for the US [market], around 14 per cent for emerging markets and again 14 per cent for the GCC [markets]."
US equity markets, which ended their longest bull-run in March last year amid the Covid-19 pandemic, saw a v-shaped recovery when the benchmark S&P 500 Index and the Dow Jones Industrial Average rose sharply after falling into bear territory.
Despite success on the vaccine front, which sent US and global stocks to new highs, Mr Gravier expects only modest returns this year amid greater market volatility.
"We expect positive returns but it is not going to be as good as 2020," he said.
"You have the usual risk of an economic cycle, recession, [and] geopolitics – you name it, but on top of everything, you have the risk created by the ‘magic money’."
Governments and central banks have provided more than $12 trillion in fiscal and monetary support to bolster economies to date. However, Mr Gravier said, this means inflation and a potential debt crisis are factors investors have to contend with when making longer term investment decisions.
Given the levels of interest rates and state of the global economy, investors should forget the high returns they were getting in bond markets, Mr Gravier said.
"Forget the almost 5 per cent that you used to get from government bonds. It is going to be 1 per cent to 2 per cent on average at best over the next 10 years," he said.
There has to be selectivity, "in sectors, themes and segments" where things are moving at a faster pace, he added.
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
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 who has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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Book%20Details
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Tips to stay safe during hot weather
- Stay hydrated: Drink plenty of fluids, especially water. Avoid alcohol and caffeine, which can increase dehydration.
- Seek cool environments: Use air conditioning, fans, or visit community spaces with climate control.
- Limit outdoor activities: Avoid strenuous activity during peak heat. If outside, seek shade and wear a wide-brimmed hat.
- Dress appropriately: Wear lightweight, loose and light-coloured clothing to facilitate heat loss.
- Check on vulnerable people: Regularly check in on elderly neighbours, young children and those with health conditions.
- Home adaptations: Use blinds or curtains to block sunlight, avoid using ovens or stoves, and ventilate living spaces during cooler hours.
- Recognise heat illness: Learn the signs of heat exhaustion and heat stroke (dizziness, confusion, rapid pulse, nausea), and seek medical attention if symptoms occur.
How much do leading UAE’s UK curriculum schools charge for Year 6?
- Nord Anglia International School (Dubai) – Dh85,032
- Kings School Al Barsha (Dubai) – Dh71,905
- Brighton College Abu Dhabi - Dh68,560
- Jumeirah English Speaking School (Dubai) – Dh59,728
- Gems Wellington International School – Dubai Branch – Dh58,488
- The British School Al Khubairat (Abu Dhabi) - Dh54,170
- Dubai English Speaking School – Dh51,269
*Annual tuition fees covering the 2024/2025 academic year
8 UAE companies helping families reduce their carbon footprint
Greenheart Organic Farms
This Dubai company was one of the country’s first organic farms, set up in 2012, and it now delivers a wide array of fruits and vegetables grown regionally or in the UAE, as well as other grocery items, to both Dubai and Abu Dhabi doorsteps.
www.greenheartuae.com
Modibodi
Founded in Australia, Modibodi is now in the UAE with waste-free, reusable underwear that eliminates the litter created by a woman’s monthly cycle, which adds up to approximately 136kgs of sanitary waste over a lifetime.
www.modibodi.ae
The Good Karma Co
From brushes made of plant fibres to eco-friendly storage solutions, this company has planet-friendly alternatives to almost everything we need, including tin foil and toothbrushes.
www.instagram.com/thegoodkarmaco
Re:told
One Dubai boutique, Re:told, is taking second-hand garments and selling them on at a fraction of the price, helping to cut back on the hundreds of thousands of tonnes of clothes thrown into landfills each year.
www.shopretold.com
Lush
Lush provides products such as shampoo and conditioner as package-free bars with reusable tins to store.
www.mena.lush.com
Bubble Bro
Offering filtered, still and sparkling water on tap, Bubble Bro is attempting to ensure we don’t produce plastic or glass waste. Founded in 2017 by Adel Abu-Aysha, the company is on track to exceeding its target of saving one million bottles by the end of the year.
www.bubble-bro.com
Coethical
This company offers refillable, eco-friendly home cleaning and hygiene products that are all biodegradable, free of chemicals and certifiably not tested on animals.
www.instagram.com/coethical
Eggs & Soldiers
This bricks-and-mortar shop and e-store, founded by a Dubai mum-of-four, is the place to go for all manner of family products – from reusable cloth diapers to organic skincare and sustainable toys.
www.eggsnsoldiers.com
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
More from Neighbourhood Watch:
Company profile
Name: The Concept
Founders: Yadhushan Mahendran, Maria Sobh and Muhammad Rijal
Based: Abu Dhabi
Founded: 2017
Number of employees: 7
Sector: Aviation and space industry
Funding: $250,000
Future plans: Looking to raise $1 million investment to boost expansion and develop new products
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
The White Lotus: Season three
Creator: Mike White
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THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
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Rating: 4/5
PAKISTAN SQUAD
Abid Ali, Fakhar Zaman, Imam-ul-Haq, Shan Masood, Azhar Ali (test captain), Babar Azam (T20 captain), Asad Shafiq, Fawad Alam, Haider Ali, Iftikhar Ahmad, Khushdil Shah, Mohammad Hafeez, Shoaib Malik, Mohammad Rizwan (wicketkeeper), Sarfaraz Ahmed (wicketkeeper), Faheem Ashraf, Haris Rauf, Imran Khan, Mohammad Abbas, Mohammad Hasnain, Naseem Shah, Shaheen Afridi, Sohail Khan, Usman Shinwari, Wahab Riaz, Imad Wasim, Kashif Bhatti, Shadab Khan and Yasir Shah.
The%C2%A0specs%20
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UAE currency: the story behind the money in your pockets
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Gulf Under 19s final
Dubai College A 50-12 Dubai College B
Fixtures:
Wed Aug 29 – Malaysia v Hong Kong, Nepal v Oman, UAE v Singapore
Thu Aug 30 - UAE v Nepal, Hong Kong v Singapore, Malaysia v Oman
Sat Sep 1 - UAE v Hong Kong, Oman v Singapore, Malaysia v Nepal
Sun Sep 2 – Hong Kong v Oman, Malaysia v UAE, Nepal v Singapore
Tue Sep 4 - Malaysia v Singapore, UAE v Oman, Nepal v Hong Kong
Thu Sep 6 – Final
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
