30 Jan 2017
Investors should have a balanced and well-diversified portfolio with a multi asset class mix.
This is the view of Kamran Butt, managing director, head of advisory, SEDCO Capital, who was one of the speakers at the Arab News Business Dialogue.
Butt also said: “A consequence of low-interest rates will be positive for the global real estate market (ex-UK) and possibly gold so the search for yield will be very important for investors portfolio.
“For the Middle East, one of the biggest opportunities from the Brexit could be for the GCC to seek a possible Free Trade Agreements with the UK this would be beneficial, as the GCC states have so far failed to agree this with the EU.
“If Europe can reform after this then this could be seen as a positive in the stability of the European Union over the long-term, but with the so-called article 50 still not triggered by the UK, German elections scheduled for next year, Italian banking concerns and French labor law reforms the near term could be more volatile than we expect.”
He added: “A consequence of low-interest rates will be positive for the global real estate market (ex-UK) and possibly gold so the search for yield will be very important for investors portfolio.”
Butt also said: “Going forward, we believe that one of the consequences of Brexit will be a robust reflationary policy response from the major Central banks and governments, with not only monetary but also fiscal policy at the forefront. This would also ensure that worldwide interest rates remain low.
“Real estate in the UK was entering a late cycle anyway particularly in Prime London, but we do see some value in second tier cities. However investors should hold-off until we have an understanding of the negotiations that will take place, it is going to be bumpy ride in the coming year or so,’’ he said.
He said: “We expect the sterling currency to come under pressure, as we expect the Bank of England to cut interest rates in August and the UK economy to possibly enter into a recession later this year, so we do expect UK assets to become cheap, the question here is when does it become good value. And here we believe we have to wait and see what the new relationship to the EU looks like first to forecast what good value is.
SEDCO Capital is an asset management company headquartered in Saudi Arabia, with operations around the globe. SEDCO Capital has been in operation since 1976 and in early 2010 was relaunched as a standalone asset management company.