Arab Spring Hits Investor Confidence

A majority of the investment professionals in the Middle East- 76 per cent- believe that the Arab Spring will decrease investor confidence in regional markets over next twelve months, according to a survey conducted by the CFA Institute. However, 66 per cent of the respondents said that the effects of the unrest will soon reduce and that confidence will return to the regional markets over the next three years.

While 32 per cent of the respondents said that improving transparency of investment decisions and accountability would improve trust in the region’s investment industry; another 22 per cent called for increasing the regulation of markets and a further 20 per cent said that improved financial reporting was essential.

The majority of the respondents said that diversification of investments, fiscal policy, demand for new Sukuks and bonds and oil prices will continue to increase throughout the year.

On the other hand, most respondents also felt that liquidity, real estate prices and levels of trust will continue to decline in 2012.

The survey was conducted by the CFA Institute in the build-up to the 2012 Middle East Investment Conference, and included the responses from 117 investment professionals in the region.