Investors in the Middle East are beginning to consider investing in risky assets after being cautious for about 12 months, says Firas Mallah, Middle East head of Belgium’s Dexia Asset Management.
“Low interest rates globally mean that investors are now beginning to move back into riskier assets in a search for yield,” says Mallah.
He adds that Dexia’s Middle East clients, which include institutional investors and investments by wealthy families, had sold out of investments in hedge funds, private equity and listed companies because of the financial crisis.
“There are signs now that investors are interested in getting back into things like hedge funds,” says Mallah. “Generally, investors in the region have more appetite for risk than elsewhere.”
He also says there is a lot of interest in investing in bonds issued by regional corporates as a result of the increase in issuance this year.
Middle East institutions had issued $31bn of bonds by October, more than in any of the past three years (MEED 23:10:09). This higher level of bond issuance is expected to continue in 2010, says Mallah. “Bank credit is no longer the best way of funding a business in the Middle East, so more companies will look at bonds,” he says.