MEIC PRE-CONFERENCE SURVEY: MIDDLE EAST & NORTH AFRICA MARKET ISSUES March 2013
CFA Institute
SURVEY RESULTS
CFA Institute
POLITICAL STABILITY & GOOD GOVERNANCE WOULD HAVE THE MOST POSITIVE IMPACT ON ECONOMY
50%
19%
6% 6% 6% 5% 4% 4%
0%
10%
20%
30%
40%
50%
60%
Politicalstability and
goodgovernance
Increasedinvestment ininfrastructure
Increasedinvesting in
SMEs
Developmentof a private
sector
Improvedcapital
marketsregulation
Regionaleconomic
integration
Increasedinvestment in
education
Other
What do you think would have the most positive impact on the Middle East and North Africa (MENA) economy in 2013?
(N=188)
CFA Institute
SAUDI ARABIA AND QATAR LIKELY TO EXPERIENCE THE STRONGEST ECONOMIC GROWTH IN 2013
34% 33%
23%
3% 2% 2% 1% 1% 1% 1% 1% 0% 0% 0%
10%
20%
30%
40%
50%
60%
Which of the following countries in the MENA region do you think will experience the strongest economic growth in 2013?
(N=187)
CFA Institute
49% PREDICT DECREASED ECONOMIC GROWTH RATES FROM THE ARAB SPRING OVER THE NEXT FIVE YEARS
Increased economic growth rates
38%
Decreased economic growth rates
49%
No change in economic growth rates
13%
What do you think the economic impact of the political change occurring from the Arab Spring will be for the MENA region over
the next five years? (N=188)
CFA Institute
CHINA TO HAVE THE MOST POSITIVE FOREIGN ECONOMIC INFLUENCE ON THE REGION OVER THE NEXT FIVE YEARS
46%
24%
12% 9%
3% 2% 0%
3%
0%
10%
20%
30%
40%
50%
60%
China United States EuropeanUnion
India Russia Japan Brazil Other
Which country or region do you think will have the most positive foreign economic influence on the MENA region over the next
five years? (N=188)
CFA Institute
FREEDOM OF LABOUR & CAPITAL AND REGULATORY ALIGNMENT WOULD HELP STIMULATE INVESTMENT
56%
47%
34%
19%
11% 11%
4%
0%
10%
20%
30%
40%
50%
60%
Freedom oflabour and
capital across theregion
Regulatoryalignment acrossthe MENA region
Creating aneconomic trading
union
A single capitalmarket
A single currency Other None
Which of the following, if any, do you think would stimulate investment in the MENA region? Select all that apply.
(N=188)
CFA Institute
57% THINK THE PRIMARY FOCUS FOR REGULATORS IN 2013 SHOULD BE THE PROTECTION OF INVESTORS
Protection of investors 57%
Reduction of systemic risk 35%
Other 8%
What should be the primary focus in 2013 for regulators of securities markets in the MENA region?
(N=187)
CFA Institute
ONE-QUARTER OF RESPONDENTS THINK EQUITIES ARE THE MOST UNDER-VALUED OVER THE NEXT 12 MONTHS
25%
18% 15%
11%
5% 2% 2%
22%
0%
10%
20%
30%
40%
50%
60%
Equities MENA MarketEquities
GCC MarketEquities
Real Estate Commodities Corporatebonds
Governmentbonds
None of theabove
In the MENA region, which of the following, if any, do you think is currently most under-valued (as of February 2013), when looking
ahead over the next 12 months? (N=186)
CFA Institute
SEVERAL AREAS OF THE INDUSTRY ARE EXPECTED TO EXPERIENCE GROWTH IN EMPLOYMENT IN 2013
39% 38% 35%
28% 26% 24% 22%
18%
5% 2%
6%
0%
10%
20%
30%
40%
50%
60%
Which area(s) of the financial services industry in the MENA region, if any, do you think will experience growth in employment opportunities
over the next 12 months? Select all that apply. (N=187)
CFA Institute
INVESTOR TRUST & CONFIDENCE WOULD INCREASE WITH IMPROVED CORPORATE GOVERNANCE PRACTICES & TRANSPARENCY OF FINANCIAL REPORTING
1%
30%
33%
41%
43%
46%
46%
46%
47%
70%
70%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Other
Increased levels of industry knowledge for those working infinancial services but outside investment roles
Improved regulation and oversight of global systemic risk
Improved auditing practice and standards
Adoption of a code of ethics and professional conduct for allprofessionals managing investments
Improved enforcement of existing laws and regulations
Improved market trading rules on transparency and frequencyof trades
Stronger deterrents to prevent market and investor abuses
Improved investor education among clients
Improved transparency of financial reporting and othercorporate disclosures
Improved corporate governance practices
What do you think would improve investor trust and confidence across markets in the MENA region? Select all that apply.
(N=188)
CFA Institute 12 Global Market Sentiment Survey 2013
ABOUT THE STUDY
CFA Institute
ABOUT THIS SURVEY To coincide with the 2013 Middle East Investment Conference held in Dubai on 20-21 March 2013, CFA Institute, in collaboration with member societies in the Middle East, conducted a survey to gather opinions on market issues in the Middle East and North Africa (MENA) region to raise the profile of members, societies, and CFA Institute and build meaningful dialogue within the region.
METHODOLOGY An online survey was conducted from 19 February to 3 March 2013. CFA Institute members, those with charters pending, and June 2013 Level III CFA Program candidates in 11 countries across the Middle East and Northern Africa were invited to participate in the survey, totaling 2,248. 188 responded, for an overall response rate of 8% and a margin of error of ±6.8%. The survey consisted of nine questions in total.
CFA Institute
RESPONDENT PROFILE
Middle East 91%
North Africa 9%
Region COUNTRY
UNITED ARAB EMIRATES 41%
SAUDI ARABIA 15%
BAHRAIN 9%
KUWAIT 9%
LEBANON 9%
EGYPT 7%
JORDAN 4%
OMAN 3%
QATAR 3%
MOROCCO 2%
TUNISIA 1%
CFA Institute
RESPONDENT PROFILE
No Charter 55%
< 2 years 17%
2-5 years 12%
6-10 years 9%
> 10 years 7%
Years with the CFA Charter
4%
4%
6%
6%
9%
10%
0% 10% 20%
Relationship Manager
Risk Manager
Consultant
Research Analyst
Chief-Level Executive
Portfolio Manager
Top Job Functions
CFA Institute
ABOUT CFA INSTITUTE CFA Institute is the global association of investment professionals that sets the standard for professional excellence and credentials. The organization is a champion for ethical behavior in investment markets and a respected source of knowledge in the global financial community. The end goal: to create an environment where investors’ interests come first, markets function at their best, and economies grow. CFA Institute has more than 110,000 members in 138 countries and territories, including over 103,000 CFA charterholders, and 138 member societies. For more information, visit www.cfainstitute.org.
QUESTIONS? Media inquiries: Nicole Haroutunian Public Relations Manager [email protected] Survey inquiries: Melissa Looney Director, Market Intelligence [email protected]
CFA Institute
APPENDIX
QUESTIONNAIRE 1. What do you think would have the most positive impact on the Middle East and North Africa (MENA) economy in 2013?
[RANDOMIZE] • Regional economic integration • Development of a private sector • Increased investment in education • Increased investment in infrastructure • Increased investing in SMEs • Political stability and good governance • Improved capital markets regulation • Other (please specify): [text]
2. Which of the following countries in the region do you think will experience the strongest economic growth in 2013? Drop down: Full list of MENA countries
3. What do you think the economic impact of the political change occurring from the Arab Spring will be for the MENA region over the next five
years? • Increased economic growth rates • Decreased economic growth rates • No change in economic growth rates • Not sure
4. Which country or region do you think will have the most positive foreign economic influence on the MENA region over the next 5 years?
[RANDOMIZE] • United States • China • Russia • Japan • India • Brazil • European Union • Other (please specify): [text]
5. Which of the following, if any, do you think would stimulate investment in the MENA region?
Select all that apply [RANDOMIZE] • A single capital market
• Creating an economic trading union • Regulatory alignment across the MENA region • A single currency • Freedom of labour and capital across the region • Other (please specify): [text] [ANCHOR] • None [CLEARS ALL OTHER] [ANCHOR]
6. What should be the primary focus in 2013 for regulators of securities markets in the MENA region?
[RANDOMIZE] • Protection of investors • Reduction of systemic risk • Other (please specify): [text]
7. In the MENA region, which of the following, if any, do you think is currently most under-valued (as of February 2013), when looking ahead over
the next 12 months? [RANDOMIZE] • Equities • Government bonds • Corporate bonds • Real Estate • Commodities • GCC Market Equities • MENA Market Equities • None of the above [ANCHOR]
8. Which area(s) of the financial services industry in the MENA region, if any, do you think will experience growth in employment opportunities
over the next 12 months? Select all that apply [RANDOMIZE] • Sovereign Wealth Funds • Private Equity • Commercial Banking • Investment Banking • Insurance • Real Estate • Hedge Funds • Asset Management • Alternative Asset Management • Other (please specify): [text] [ANCHOR]
• None [CLEARS ALL OTHER; ANCHOR] 9. What do you think would most improve investor trust and confidence across markets in the MENA region?
Select all that apply [RANDOMIZE] • Improved enforcement of existing laws and regulations • Improved regulation and oversight of global systemic risk • Improved transparency of financial reporting and other corporate disclosures • Improved market trading rules on transparency and frequency of trades • Improved corporate governance practices • Improved auditing practice and standards • Stronger deterrents to prevent market and investor abuses • Improved investor education among clients • Increased levels of industry knowledge for those working in financial services but outside investment roles • Adoption of a code of ethics and professional conduct for all professionals managing investments • Other (please specify): [text box] [ANCHOR] • Not sure [CLEARS ALL OTHER; ANCHOR]
OPEN-END COMMENTS 1. What do you think would have the most positive impact on the Middle East and North Africa (MENA)
economy in 2013? (Other-specify) Country
Political stability LEBANON liquidity and foreign ownership OMAN Don't see anything positive SAUDI ARABIA Less Imperialist Meddling UAE Increased credit to various sectors UAE clear immigration policy UAE a one year timeframe is completely random UAE
4. Which country or region do you think will have the most positive foreign economic influence on the MENA region over the next five years? (other-specify)
Country
Asia Pacific ex Japan BAHRAIN None of the above KUWAIT none UAE irrelevant UAE Africa UAE
5. Which of the following, if any, do you think would stimulate investment in the MENA region? Select all that apply. (other-specify)
Country
when they stop mixing politics with religion BAHRAIN Political Stability EGYPT
its the political stability again for a country like Egypt (also Tunisia, Iraq, Syria, Lebanon). for GCC, it’s the government, so oil prices
EGYPT
Political stability JORDAN Decreased government and donor crowding out and participating in markets JORDAN Transparent regulation that favors foreign capital flows KUWAIT
Political stability KUWAIT Stability LEBANON allowing foreign ownership of capital assets OMAN Decreased political risk QATAR Freedom of capital SAUDI ARABIA aiming for more foreign involvement in the capital markets SAUDI ARABIA Reduced Imperialist Meddling UAE Legislative improvements UAE Increased transparency UAE Increase markets transparencies and corporate governance UAE immigration policy UAE Foreign Ownership limits relaxed/removed UAE Foreign Ownership Laws (land, enterprise) UAE End to hostilities UAE
6. What should be the primary focus in 2013 for regulators of securities markets in the MENA region? (other-specify)
Country
Markets Stability BAHRAIN Reduction of restrictions to investment while enforcing equitable rules to all types of investors EGYPT better corporate governance, BOD authorities and responsibilities JORDAN corporate disclosure and governance OMAN Improved Market Liquidity QATAR Refining Regulations SAUDI ARABIA Open up some of the closed markets for foreign investments SAUDI ARABIA reducing trading costs, enabling easier access for smaller firms UAE Prevent: Derivatives, Short Selling, Margin Trading, Excessive Corporate Debt UAE need more listed securities UAE Issue licenses for IFAs. This will promote portfolio management by individuals which currently is zero. UAE Increase markets efficiencies by allowing free foreign capitals to flow in and out freely UAE
improved governance and transparency UAE implementing the current laws UAE Amending IPO rules to encourage new listings UAE
8. Which area(s) of the financial services industry in the MENA region, if any, do you think will experience growth in employment opportunities over the next 12 months? Select all that apply. (other-specify)
Country
Microfinance JORDAN non-banking Fin. Inst. SAUDI ARABIA Private banking UAE Brokerage UAE
9. What do you think would improve investor trust and confidence across markets in the MENA region? Select all that apply. (other-specify)
Country
Reduced Imperialist Meddling UAE enact ability to conduct hostile takeovers UAE
Please provide any additional comments related to MENA market issues: Country MENA stock markets lacks liquidity and suffers from high bid ask spread. BAHRAIN
Major threat, market instability due to political turmoil making government dysfunction and ineffective to provide for needed favorable environment to support economic growth and social stability of its citizens.
KUWAIT
low liquidity, deterrence to foreign ownership in the domestic economy, weak regulation and corporate governance, large concentration of ownership by govt. and hence low free float.
OMAN
Move to semi-annual dividend payments to break strong seasonality in markets which should also improve liquidity and investor participation in markets year round. / Lower issuance thresholds for smaller business in debt and equity finance to build a deeper listed securities market, this may involve some disintermediation of the banking sector. / Improved market access by streamlining account processes for international investors. It should take no more than 3 days to establish and begin trading an account if there is a passport system for recognition out of well-established jurisdictions.
QATAR
One possible announcement in the Saudi exchange market (Tadawul) can provide substantial liquidity this year; that is allowing foreign investors to enter the market.
SAUDI ARABIA
Curbing speculation and inclusion of UAE and Qatar to Emerging market indices would improve investor confidence.
SAUDI ARABIA
Predominantly oil economies and those with untapped consumer potential should continue to be attractive for foreign investors (leading among them being Saudi Arabia). Those with limited / diminishing oil reserves but that enjoy strong foreign linkages (such as Qatar and UAE) will flourish if alternative industry sectors continue to be encouraged and perform well and profitably. Governance is obviously a key issue (the UAE being an exception - which has been hailed for its good governance practices). Investor participation (especially the retail investor's participation) in the equity markets is constrained by a number of factors such as limited knowledge, lack of sufficient public issues, limited marketing of issuances, lackluster performance of some of the stock market heavyweights (which are mostly huge public sector / royal family owned companies) whose ratings and performance are inextricably linked to the strength and fortunes of their respective governments / rulers. More private sector participation is also needed in some of the economies.
UAE
Political stability, well regulated labor market, protection of human rights, maintaining rule of law, well regulated debt & equity markets, etc. will ensure a sustainable growth in MENA region.
UAE
need to have more listed companies for equities / UAE
MENA region is really plagued by corporate governance issues. Whistle blowers are not only at risk of being isolated, they can be threatened due to political regimes' lack of freedom. Arab spring has just been a step backward.
UAE
MENA markets are promising region when the political instability resolve, the heavily oil dependent economies might face a challenge with more alternative energy sources are being developed. / Those countries with less oil concentrated economies (especially Arab Spring countries) might offer a good chance to invest for long term. / Political risk is an issue in the meanwhile, but stability in the years to come might reward those who held positions now
UAE
MENA market has huge potential among local populations. Islamic investments would be of great appeal to this segment of the market. I feel this is an untapped market, which has huge potential.
UAE
Investor protection and transparency are key UAE
Top Related