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HNWIs in Qatar focus on real estate.

According to a recent study by Barclays Wealth, 100 per cent of Qatari HNWIs indicated that they are currently invested in the real estate sector. Qatari respondents who participated in the survey expressed a positive outlook for the real estate sector with another 100 per cent stating that real estate would be a safe investment over the next 12 months.

Khurram Jafree, Head of Investment Advisory, Barclays Wealth MENA, said, "Qatari investors distinguish themselves among their peers by their enthusiasm for investments in real estate. This strategy must have rewarded them as they show the greatest contentment with their financial situation. As the report clearly illustrates, there are considerable differences among wealthy investors in Qatar and between Qatari investors and their counterparts in the region and the world. This is a timely reminder, if one was needed, that the wealth management industry needs to tailor its services at the individual level and that one-size fits-all approaches do not work."

The report, Risk and Rules: The Role of Control in Financial Decision Making , is based on a global survey of more than 2,000 HNWIs, and provides an in-depth examination of wealthy investors from a behavioural finance perspective. In addition to considering the different financial personality traits that exist amongst wealthy investors, the report shows their views on nine main asset groups: real estate; cash; alternative strategies (long/short funds, arbitrage etc); equities from both developed and emerging markets; bonds from developed governments, blue-chip corporations and high yield/emerging markets; and commodities.

Forty three percent (43 per cent) of Qatari investors believe that investment in cash is risky, while 24 per cent see cash as safe. Less than a third (32 per cent) of those surveyed currently hold cash investments. Qatari HNWIs also demonstrated ambiguous sentiments towards investment in alternative strategies. Nearly half (42 per cent) believe they are neither risky nor safe, 15.7 per cent perceive them to be risky while 37 per cent take the complete opposite view and think they are safe. Regardless of their views on the safety or riskiness of this asset class, alternative strategies were not particularly popular with Qatari HNWIs and only 16 per cent have such investments in their portfolio.

Equities further highlight mixed investment opinions among Qatari investors - 39 per cent of respondents find investments in emerging market equities risky, yet almost exactly the same proportion (35 per cent) find them safe. There is however a greater difference when it comes to developed market equities, as a clear majority (62.7 per cent) of respondents considers them a safe investment option for their portfolio.

Investments in developed government bonds are considered safe by over half of the investors (55 per cent). Corporate and investment grade bonds are also considered safe by 53 per cent of those surveyed, while only 10 per cent view them as risky. High yield and emerging market bonds are considered safe by a much lower proportion of investors (33 per cent).

With no respondents viewing commodities as very risky and less than 14 per cent of them seeing this asset class as quite risky, Qatari investors show more confidence in commodities than any other markets in the world. Qatari investors do not see commodities as particularly riskier than the average risk carried by all asset classes. 43 per cent of investors have commodities in their portfolio, making them the second most popular asset class after real estate, the country's favored investment.

2011 CPI Financial. All rights reserved.

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Publication:CPI Financial
Date:Jul 24, 2011
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