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'Most of our clients hold discretionary portfolios': Barclays PB

Barclay’s Middle East private banking head sees enthusiasm amongst clients but is cautiously optimistic for the rest of the year.

'Most of our clients hold discretionary portfolios': Barclays PB

During the global volatility, Barclays’ clients continued to invest through discretionary portfolio offering and remained interested in UK and French real estate, as well as private markets, Rahim Daya, head of Middle East private banking, has said.

In addition to European real estate, there is also an emerging trend of investors leveraging on market opportunities to build positions in gold and silver and increase exposure to tech and healthcare. Barclays has this far seen positive inflows into these asset classes.

‘Given the high uncertainty, disruption and dispersion, active management has scope to deliver alpha in the current environment. Every client is different. Most of our clients hold discretionary portfolios with us and are very pleased with the performance,’ Daya said.

The British investment bank continues to barbell US and emerging markets instead of Europe and Japan and maintains a bias towards quality. ‘Cheap value could do well in a recovery scenario, but it is difficult to time and unlikely to be long-lasting,’ he added.  

On a sector level, the executive is more inclined towards a mix of defensive and growth exposure. He sees opportunities in healthcare, communication services as well as select industrials and tech. Like many other investment houses, Barclays does not believe in timing the market. It prefers to remain invested, be active and be diversified.

In the coming year, the Middle East head plans to navigate this uncertain time by focusing on providing his clients access to both public and private markets through a range of investment themes and ideas.

Leveraging on its presence in Dubai, London and Geneva, Daya plans to work closely with the bank’s investment and corporate banking divisions to grow the Middle East private banking business.

Moving forward, Daya also plans to take advantage of global developing trends. ‘The private bank is focused on four main themes which we believe are transforming society and financial markets: the reversal of globalisation, demographic shifts, ‘smart-everything’ and building a sustainable world.’

With global growth expected to experience a contraction of 3.9% this year, it is difficult to remain positive. However, this outlook fluctuates as economies tackle the ramifications of the pandemic. The global economy has rebounded more strongly and quickly than anticipated, led by the US and China.

However, the lifespan, intensity and geographical spread of the virus will continue to play a crucial role in determining future growth. Economic activity will remain vulnerable to the development of a second wave. Additionally, the grave impact of lockdowns on economies make it difficult to see them being reinstated again.

‘Following the tentative reopening of economies and the vast level of stimulus instigated by policymakers, recovery is expected for 2021, with global growth forecasted at 5.2%. However, a V-shaped recovery seems unlikely at this point. While growth should rebound next year, it would still be difficult for advanced economies to reach the pre-Covid level of GDP by the end of 2021,’ Daya said.

According to him, the downside risk to this forecast is the potential for a damaging second wave. On the upside, there is also the potential for the development of a vaccine that is earlier than expected which could dramatically impact these projections.

Widespread vaccination against COVID-19 is seen to be something likely by the Q3 2021. Although the pace of growth is expected to slow in Q4, the global economy is expected to finish 2020 in better shape than seemed likely a quarter ago.

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