#UAE financial analysts predict wave of business failures, 'hockey stick' recovery | ZAWYA MENA Edition

UAE financial analysts predict wave of business failures, 'hockey stick' recovery | ZAWYA MENA Edition:

The coronavirus pandemic has already been hard on everyone but the worse isn’t over yet, with financial analysts in the UAE predicting a wave of business failures and a period of flat spell prior to economic recovery.

In a member survey by CFA Institute, the global association of investment professionals, 40 percent of the respondents in the country said they expect “large-scale bankruptcies” as a result of the outbreak, although many of them (47 percent) are forecasting a medium-term “hockey stick” shaped economic recovery, which implies some level of stagnation for the next two to three years.

The majority of investment professionals in the emirates (94 percent) are also wary that the crisis could increase the chances of specific asset mispricing due to liquidity dislocation and the government intervention potentially influencing natural market pricing. Half of them also expressed concern that the pandemic could result in unethical actions in the investment management industry.

CFA’s survey is part of a new report and it seeks to analyze the impact of the pandemic on the global economy, the capital markets and the investment management industry. More than 13,000 members in various countries, including the UAE, have responded to the survey.