He confirmed that the world is on the threshold of the "Age of Magic Money"
Emirates NBD: The economy is recovering thanks to Corona vaccines
Emirates NBD: The economic and monetary stimulus responses were unprecedented and the most effective for investments.
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Morris Gravier: "Our investment portfolios achieved positive returns with double-digit numbers, which made us outperform our international competitors."
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Yesterday, Emirates NBD revealed its global investment forecast for 2021 under the title "The Age of Magic Money".
The bank's chief investment officer, Maurice Gravier, and his team, expressed to media representatives their confidence in the imminent economic recovery, thanks to the spread of anti-Coronavirus (Covid-19) vaccines, and the financial stimulus strategies launched by governments in light of low interest rates in support of high economic expectations. .
Gravier explained his investment strategy against the backdrop of the unprecedented events that the world witnessed during the year 2020 in light of the outbreak of the pandemic, which dealt a painful blow to the entire global economy.
Take profits
"On the tactical level, the general outlook appears somewhat positive in the short to medium term," Gravier said. "In what is expected in 2021 will revolve around profit-taking in the fixed-income market and increasing capital in stocks that record strong earnings growth.
He added: “In the long run, the investment scene has changed strategically, and we are today on the threshold of the so-called (magic money era) that carries long-term consequences, as low returns and new risks, whether through inflation or debt accumulation.
In response, we are working to include a higher proportion of emerging markets in the strategic investment mix, as they are faster growing and have supportive factors that drive their recovery after the pandemic, and are characterized by lower costs and fewer populations.
Multi-asset funds
Gravier discussed the multi-asset funds that the bank recently launched, and are managed from Dubai, namely: “The Distinguished Cautious Emirates Fund”, “The Moderate Premium Emirates Fund”, and “The Distinguished Bold Emirates Fund”, which are available in dirham, euro and dollar currencies, pointing out that the funds managed from Dubai, based in the Luxembourg-based authority, will be subject to continuous monitoring and internal controls applied by the bank, and will be available to a wide range of the public, with a minimum minimum of $ 1,000 for initial investment and daily liquidity.
And Gravier continued: “We were wrong at first when we believed in February 2020 that the virus was a temporary and confined case in Asia.
Weeks later, we managed to reduce the risks to the lowest level in our history, at a time when the markets were still maintaining their positivity since the beginning of the year.
We also revised our scenario and our fair values, repurchased aggressively in the midst of the March crash, and have maintained our investment ever since.
As a result, our three investment portfolios have achieved positive returns with double digits, which exceed our long-term allocations, and put us ahead of our international competitors. ”
"Magic money"
Emirates NBD stated, in a report, that the investment scene has changed strategically, as we are currently at the threshold of the so-called "magic money era" that central banks created without any advances to finance the increasing government expenditures, warning that it carries long-term consequences. As sources of revenue become scarcer, as expected levels fall;
It also does not protect against risks.
The bank continued: “In response to this, we are working to include a higher percentage of emerging markets in the strategic investment mix,” pointing out that “selectivity” is another response, as the bank seeks, this year, to add more sustainability standards to its platform.
Unprecedented responses
The bank's report pointed out that the unprecedented events during the year 2020 in light of the spread of the "Covid-19" pandemic, resulted in unprecedented responses as well, as front-line workers fought valiantly, and those concerned launched the first vaccines in history for the Corona virus within a standard time frame. Extremely.
He added that the economic and monetary stimulus responses were unprecedented as well, and more effective with regard to investments, noting that the $ 10 trillion amount allocated to the first months of the crisis is three times greater than the total amount allocated to address the major financial crisis in 2008.
The report stated that governments spent huge sums of money to support the economy, and avoid catastrophic damage.
On the monetary front, interest rates fell to unprecedented levels, and about 100 countries resorted to some form of liquidity injection, which provided an abundance of money.
“These responses explain why 2020 is a great year for the financial markets,” the report said.
"These responses may seem far from the current devastation, but they are not so for the future recovery: the vaccine developed supports recovery plans, especially if combined with financial incentives, while lower interest rates support the economic outlook."
Outlook for oil, gold and real estate
A report by Emirates NBD expects that the average price of Brent crude will be $ 50 in 2021. The report said that next year is the year of fixed income, and the recovery of interest payments, as prices and margins are not expected to decline significantly, indicating the preponderance of the scale to investing in gold To hedge risks, this trend may strengthen as the economy recovers.
He added that gold and cash are the best defensive assets, especially against government bonds in developed markets.
With regard to the real estate market, the report said that opportunities are specific;
However, at the beginning of this year, we are closer to the long-term distribution of real estate assets.
• The bank’s funds will be available to a wide audience, with a minimum of $ 1,000 for an initial investment.
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