The post-Covid-19 recovery is hanging in the balance as investors weigh hopes that vaccines will release consumers from lockdown against fears that a European third wave will set back the recovery yet again.
That makes now a tough time to decide where to invest. Should you target stocks and sectors that will fly when the economy springs back to life, or stick to defensive mode in case the pandemic drags on and on?
If you are looking to invest, say, $10,000 (Dh36,725) over the next quarter, here are three investment trends to consider right now.
The first will help you take advantage of a recovery in the banking sector, the second is that old favourite of safety seekers, gold, while the final one targets one of the world's most exciting sources of clean energy.
While this may be a good time to buy into these sectors, as with any investment, you must consider both the risks and rewards, and aim to hold for the long term.
Going back to the banks
The banking and financial sector has underperformed since the financial crisis as lenders battled to repair their balance sheets and reputational damage.
Low interest rates have made a bad situation worse by squeezing net interest margins, the difference between what banks pay depositors and charge borrowers.
However, banks could enjoy a prolonged boost as bond yields rise, says Vijay Valecha, chief investment officer at Century Financial in Dubai.
In the US, 10-year government bonds, or Treasuries, currently yield around 1.69 per cent, up more than three-fold from 0.51 per cent in May last year.
This allows banks to shift deposits into higher-yielding loans and other assets. “If yields rise higher, banking stocks could rally.”
Banks are much stronger than before the financial crisis as regulators have forced them to adopt more conservative accounting practices and build fatter capital cushions.
This protects them from the continued economic slump, but they will benefit if mass vaccination triggers a rapid bounce back, Mr Valecha says. “If that happens, some of their projected loan losses might never happen, and banks should see a huge rise in profits.”
He suggests investing in a cross-section of banks through an exchange-traded fund (ETF). His favourites include Financial Select Sector SPDR Fund, iShares US Financial Services ETF, PowerShares KBW Bank Portfolio and SPDR S&P Regional Banking ETF.
UK and European banks look particularly cheap, says Russ Mould, investment director at investment platform A J Bell. “Many investors are worried about unpaid bad debts due to the pandemic but lenders provisioned very aggressively in 2020, so the worst may already be known, especially if the global economy shows positive momentum,” he adds.
Many banks cancelled dividends during the first lockdown last year but are now looking to resume them, which will attract investors seeking income.
Mr Mould says banks still face major challenges, such as tighter regulations, competition from FinTech start-ups and the massive global debt pile, but is optimistic. “Japanese banks managed some big share price rallies during Japan’s multi-decade downturn, and UK and European banks could do the same.”
Gold and gold miners
Gold has been one of the best investments of the millennium, rising an incredible 563 per cent in the past 20 years. Last year’s pandemic gave it a further boost, as investors rushed to this traditional safe haven.
The gold price flew to a record high $2,084 an ounce last August, but has fallen more than 15 per cent since to $1,730.
Traditionally, the precious metal is seen as a hedge against inflation, which many analysts now expect to return in force.
The rebounding US dollar and rising bond yields are holding back the gold price for now, says Fawad Razaqzada, a market analyst at Think Markets.
Gold is priced in dollars and as the greenback rises, the precious metal gets more expensive for those buying with other currencies.
Rising bond yields are a threat, because gold pays no interest or dividend. "The opportunity cost of holding gold rises as investors can make more money by investing in government bonds,” Mr Razaqzada says.
However, today's low price could be a buying opportunity for long-term investors who want to add gold to their portfolio but thought they had missed their chance when the price shot past $2,000, he adds.
Many investors are worried about unpaid bad debts due to the pandemic but lenders provisioned very aggressively in 2020, so the worst may already be known, especially if the global economy shows positive momentum
Mr Mould says the best time to invest in an asset for the long term is when prices are low, rather than high. “This could be an interesting time to pick up some inflation protection and hedge against an unexpected financial wobble by getting exposure to this neglected, unloved sector.”
He suggests buying shares in gold miners, rather than the precious metal, whose share prices are stagnating “even as they record bumper profits, generate copious cash flows and pay out higher dividends”.
Selecting individual gold miners can be risky as they are at the mercy of factors such as geology, weather, regional politics and local taxation. Mr Mould suggests actively managed fund BlackRock Gold & General.
Alternatively, invest in an ETF tracker such as Van Eck Vectors Gold Miners ETF. More adventurous investors might consider the Van Eck Vectors Junior Gold Miners ETF, which targets smaller mining stocks.
Hydrogen
The world has embarked on a transformational shift towards key clean energy, as countries race to meet their 2050 net-zero carbon commitments.
Randeep Somel, manager of the M&G Climate Solutions Fund, says this offers massive opportunities, particularly in hydrogen where investments will total $38 billion a year this decade, according to the International Energy Agency.
Hydrogen could prove essential in sectors that will struggle to electrify, such as heavy-duty vehicles, air travel and shipping, which account for 19 per cent of global emissions, and steel and cement production, which account for another 16 per cent. “We require a high density, non-fossil based fuel to take over from oil and coal. The emerging alternative is hydrogen,” Mr Somel says.
While some methods of producing hydrogen require carbon, others use wind and solar power.
UK-based ITM Power is the leader in proton exchange membrane (PEM) electrolysers that convert renewable energy into carbon-free green hydrogen, Mr Somel says. “Oil major Shell is its largest customer, as it looks to build hydrogen-refuelling stations in anticipation of the phasing out of combustion vehicles.”
Another UK company, Ceres Power, has drastically reduced fuel cell costs, he says. Chinese industrial conglomerate Weichai, German firm Robert Bosch, and Japanese motor companies Honda and Toyota all license its innovative technology.
Mr Somel says the green hydrogen market today totals just 2 gigawatts but that is changing fast. “The EU alone is targeting 40GW by 2030.”
As with any emerging technology, investing in individual companies is risky, so most people should invest in a renewable energy fund or ETF.
The recently launched Defiance Next Gen H2 ETF invests in a range of firms including Plug Power, FuelCell Energy, Ballard Power Systems and ITM Power.
In February, Legal & General Investment Management launched the L&G Hydrogen Economy UCITS ETF targeting technologies and firms producing cheaper, clean forms of hydrogen.
This is a high-risk, high reward investment, so make sure you understand the potential downside, as well as the upside.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
More coverage from the Future Forum
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
COMPANY%20PROFILE
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What the law says
Micro-retirement is not a recognised concept or employment status under Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations (as amended) (UAE Labour Law). As such, it reflects a voluntary work-life balance practice, rather than a recognised legal employment category, according to Dilini Loku, senior associate for law firm Gateley Middle East.
“Some companies may offer formal sabbatical policies or career break programmes; however, beyond such arrangements, there is no automatic right or statutory entitlement to extended breaks,” she explains.
“Any leave taken beyond statutory entitlements, such as annual leave, is typically regarded as unpaid leave in accordance with Article 33 of the UAE Labour Law. While employees may legally take unpaid leave, such requests are subject to the employer’s discretion and require approval.”
If an employee resigns to pursue micro-retirement, the employment contract is terminated, and the employer is under no legal obligation to rehire the employee in the future unless specific contractual agreements are in place (such as return-to-work arrangements), which are generally uncommon, Ms Loku adds.
Killing of Qassem Suleimani
Killing of Qassem Suleimani
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
HUNGARIAN GRAND PRIX RESULT
1. Sebastian Vettel, Ferrari 1:39:46.713
2. Kimi Raikkonen, Ferrari 00:00.908
3. Valtteri Bottas, Mercedes-GP 00:12.462
4. Lewis Hamilton, Mercedes-GP 00:12.885
5. Max Verstappen, Red Bull Racing 00:13.276
6. Fernando Alonso, McLaren 01:11.223
7. Carlos Sainz Jr, Toro Rosso 1 lap
8. Sergio Perez, Force India 1 lap
9. Esteban Ocon, Force India 1 lap
10. Stoffel Vandoorne, McLaren 1 lap
11. Daniil Kvyat, Toro Rosso 1 lap
12. Jolyon Palmer, Renault 1 lap
13. Kevin Magnussen, Haas 1 lap
14. Lance Stroll, Williams 1 lap
15. Pascal Wehrlein, Sauber 2 laps
16. Marcus Ericsson, Sauber 2 laps
17r. Nico Huelkenberg, Renault 3 laps
r. Paul Di Resta, Williams 10 laps
r. Romain Grosjean, Haas 50 laps
r. Daniel Ricciardo, Red Bull Racing 70 laps
Killing of Qassem Suleimani
Company profile
Company name: Suraasa
Started: 2018
Founders: Rishabh Khanna, Ankit Khanna and Sahil Makker
Based: India, UAE and the UK
Industry: EdTech
Initial investment: More than $200,000 in seed funding
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
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Mary Beard
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ESSENTIALS
The flights
Emirates, Etihad and Swiss fly direct from the UAE to Zurich from Dh2,855 return, including taxes.
The chalet
Chalet N is currently open in winter only, between now and April 21. During the ski season, starting on December 11, a week’s rental costs from €210,000 (Dh898,431) per week for the whole property, which has 22 beds in total, across six suites, three double rooms and a children’s suite. The price includes all scheduled meals, a week’s ski pass, Wi-Fi, parking, transfers between Munich, Innsbruck or Zurich airports and one 50-minute massage per person. Private ski lessons cost from €360 (Dh1,541) per day. Halal food is available on request.
Champion%20v%20Champion%20(PFL%20v%20Bellator)
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Januzaj's club record
Manchester United 50 appearances, 5 goals
Borussia Dortmund (loan) 6 appearances, 0 goals
Sunderland (loan) 25 appearances, 0 goals
Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
Greatest of All Time
Starring: Vijay, Sneha, Prashanth, Prabhu Deva, Mohan
Everything Now
Arcade Fire
(Columbia Records)
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
The%20pillars%20of%20the%20Dubai%20Metaverse%20Strategy
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UAE currency: the story behind the money in your pockets
Killing of Qassem Suleimani
The years Ramadan fell in May
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
'Munich: The Edge of War'
Director: Christian Schwochow
Starring: George MacKay, Jannis Niewohner, Jeremy Irons
Rating: 3/5
PROFILE OF SWVL
Started: April 2017
Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh
Based: Cairo, Egypt
Sector: transport
Size: 450 employees
Investment: approximately $80 million
Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani
THE SPECS
Jaguar F-Pace SVR
Engine: 5-litre supercharged V8
Transmission: 8-speed automatic
Power: 542bhp
Torque: 680Nm
Price: Dh465,071
The specs: 2018 Nissan Altima
Price, base / as tested: Dh78,000 / Dh97,650
Engine: 2.5-litre in-line four-cylinder
Power: 182hp @ 6,000rpm
Torque: 244Nm @ 4,000rpm
Transmission: Continuously variable tranmission
Fuel consumption, combined: 7.6L / 100km
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.
COMPANY PROFILE
Name: Akeed
Based: Muscat
Launch year: 2018
Number of employees: 40
Sector: Online food delivery
Funding: Raised $3.2m since inception
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
The Pope's itinerary
Sunday, February 3, 2019 - Rome to Abu Dhabi
1pm: departure by plane from Rome / Fiumicino to Abu Dhabi
10pm: arrival at Abu Dhabi Presidential Airport
Monday, February 4
12pm: welcome ceremony at the main entrance of the Presidential Palace
12.20pm: visit Abu Dhabi Crown Prince at Presidential Palace
5pm: private meeting with Muslim Council of Elders at Sheikh Zayed Grand Mosque
6.10pm: Inter-religious in the Founder's Memorial
Tuesday, February 5 - Abu Dhabi to Rome
9.15am: private visit to undisclosed cathedral
10.30am: public mass at Zayed Sports City – with a homily by Pope Francis
12.40pm: farewell at Abu Dhabi Presidential Airport
1pm: departure by plane to Rome
5pm: arrival at the Rome / Ciampino International Airport
La Mer lowdown
La Mer beach is open from 10am until midnight, daily, and is located in Jumeirah 1, well after Kite Beach. Some restaurants, like Cupagahwa, are open from 8am for breakfast; most others start at noon. At the time of writing, we noticed that signs for Vicolo, an Italian eatery, and Kaftan, a Turkish restaurant, indicated that these two restaurants will be open soon, most likely this month. Parking is available, as well as a Dh100 all-day valet option or a Dh50 valet service if you’re just stopping by for a few hours.
UAE currency: the story behind the money in your pockets
