LONDON (Reuters) – High net worth individuals in the Middle East have become the most risk averse among wealthy emerging market investors after the oil price crash, a Barclays manager said BARC.L Private bank.
The wealthy clients of banks in emerging markets are shifting to supposedly safer investments like dollar investments, dividends in stocks or selective fixed income securities, but risk aversion is not as great as it was during the global financial crisis, said Salman Haider, Barclays Private Bank’s head of global growth markets.
In the Middle East, on the other hand, caution is more evident.
“In the Middle East, the willingness to take risks has fallen significantly,” he said in an interview. “The focus is much more on local liquidity, much more on maintaining liquidity.”
While global stocks have regained some of the lost ground after a loss in March sparked by fears over the economic cost of the pandemic, oil prices remain low despite a surge this month.
Haider said risk sentiment had also fallen in Russia, another oil-rich economy, while appetites were subdued in India. In other parts of Asia, customers were a little braver, he said.
Private bank customers typically have more than £ 20 million ($ 24.7 million) in fixed assets available.
“There has been a lot of focus on ensuring that their companies are able to meet their liquidity needs, working capital, etc.,” said Haider from London.
There is broad consensus among clients to shift portfolio flows into sectors like healthcare and technology and away from areas more exposed to the pandemic like travel and entertainment, he said.
The larger family offices and mega-rich in the US and Europe had an appetite for investments in distressed assets, ranging from bank loans to health and technology facilities, Haider said.
“We have aroused interest in examining specific direct investment opportunities. This could be direct investment in healthcare and technology companies that can provide direct equity equity access, ”he said, adding that interest in real estate has also resumed.
Reporting by Tom Arnold; Adaptation by Susan Fenton