QFC releases the first Asset Management Barometer

by  — 4 May 2013

The annual survey related to asset management is about fee-based income of the players, marked by a risk-on approach of the managers, reports Aparajita Mukherjee.

After releasing the first edition of the Barometer, QFC Authority intends to publish it annually.

The Qatar Financial Centre Authority (QFC Authority) published the first edition of its MENA Asset Management Barometer at the Bloomberg Link event in April 2013, offering a comprehensive portrait of current market sentiment to be tracked over time, based on 45 Barometer interviews. Over 70 percent of Middle East and North Africa (MENA) asset managers remain confident about 2013 based mainly on the attractiveness of the GCC countries. This sentiment benefits from increased government investment and dynamic local equity markets, stated the first edition of QFC Authority’s MENA Asset Management Barometer.

The Barometer, which is intended to be published annually, found that asset managers are showing an increasingly risk-on attitude towards the growth potential in local equity markets. Additionally, asset managers are united by the need for clearer regulation and better distribution opportunities. 

Shashank Srivastava, chief executive officer and board member of the Qatar Financial Centre Authority said, “The QFC Authority is proud to launch its inaugural MENA Asset Management Barometer, providing industry practitioners with detailed insight into the regional asset management industry. The Barometer is a ground-breaking piece of research, which exemplifies the QFC Authority’s commitment to thought leadership, serving the financial services industry in the MENA region as well as in Qatar. The Bloomberg Doha
Conference, which brings many leaders of the asset management industry under one roof, is a fitting occasion for sharing the Barometer’s findings.” 

Qatar and the UAE seemed to offer the most potential the Barometer has stated. The findings were based on interviews with senior bankers, fund management firms, sovereign wealth funds and pension funds across the GCC countries, Egypt and Morocco.

The Barometer found that asset managers are showing an increasingly risk-on attitude towards the growth potential in local equity markets. 

The respondents said that the countries’ infrastructure spending programmes and successful attempts to build hubs for financial service firms would continue to pay off in 2013. The risk-on approach was chiefly characterised by asset managers moving from fixed income to equities, or at least reweighting portfolios to an equity parity or bias.

Different geographies agreed on the impact of regulation, with all participants predicting that new rules would have a measurable effect on MENA’s asset management sector. Though respondents strongly supported the region’s shari’ah-compliant sector, managers also said that the lack of unified regulation across MENA was damaging distribution and investment opportunities, as well as pushing up asset management overheads.

Commenting on the Barometer’s findings, Yousuf Mohamed Al Jaida, chief strategic development officer of the QFC Authority said, “The Barometer paints an optimistic yet realistic picture. It reveals confidence in the continued expansion of the GCC and MENA markets in 2013. Fund managers expect more weighting towards equities and away from fixed income, encouraged by government investment and progress in developing financial centres around the region.  They would also like to see more regulatory convergence. Regulation is seen as having the biggest impact on the conduct of business and as the major cost. There is strong support for shari’ah-compliant finance, but again fragmented regulation is a hindrance.”

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