Oil Price Fall A Major Complication In Global Economy, Says NBAD Report

Entitled 'Investment Strategies in Today's Volatile Markets', the report analyzes the global investment climate and provides pointers for investors to deal with the economic environment for the rest of 2016.

Shutterstock.com

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

The volatilities in the global financial markets and economy seen in 2015 are expected to continue to cause a fair share of worry for countries in 2016, according to the Global Investment Outlook 2016 report released in February by National Bank of Abu Dhabi (NBAD). Entitled Investment Strategies in Today's Volatile Markets, the report analyzes the global investment climate and provides pointers for investors to deal with the economic environment for the rest of 2016. The report mentions oil price fall to be a key complication in the health of the world economy, with oil prices expected to trade in a range of $25-45 during the remainder of the year.

The report notes that while 2015's economy can be categorized "fragile," structural problems remain in 2016, and it is worrisome that many policy responses of recent years which helped support global demand were more of "quick fixes" by nature. The study believes that despite economic strains persisting in 2016, there is scope for attractive investment opportunities in selected emerging and frontier markets, especially within the commodities sector.

Related: AIM 2016 Hopes To Keep Dubai As An International Investing Hub

"The UAE seems to be weathering the storm better than other oil exporting nations," says the report. "The UAE has over the years taken steps to diversify its economy away from its previous reliance on hydrocarbons." In the case case of MENA, the report says, "For the past year and a half, MENA equity markets have corrected sharply and valuations are now beginning to look attractive, with some stocks trading on valuations that are looking rather bombed out." It names UAE as the first GCC nation to respond to the decline in oil prices and devise alternative methods to fund spending such as Value Added Taxes (VAT) and privatizations.

Commenting about the need to ride out this slump, Claude-Henri Chavanon, Head, Global Asset Management, NBAD, says, "Given the investment outlook as described in our report, investors will need to exercise patience and then have the requisite courage to decisively deploy funds when opportunities present themselves." NBAD's study also counts the economic impact of Europe's migration crisis and the uncertainty around impending US Presidential elections as two key risk factors of 2016 that global investors need to keep an eye on.

Related: Infographic: UAE SMEs Expect A Subdued 2015 To Make Way For A "Cautiously Optimistic" 2016

Related Topics

Thought Leaders

5 Small Daily Habits Self-Made Millionaires Use to Grow Their Wealth

We've all seen what self-made millionaires look like on TV, but it's a lot more subtle than that. Brian Tracy researched what small daily habits these successful entrepreneurs adopted on their journey from rags to riches.

Science & Technology

How to Build an App When You Have No Coding Knowledge or Programming Skills

The world is moving towards a no-code era. In this article, we'll discuss what no-code app builders are, how they work, and why founders and startups should opt for them to build an application.

Career

60 Second Business Tips: 3 Ways to Boost Confidence

Business development consultant Terry Rice on silencing self-doubt.

Technology

Ricky Ray Butler, CEO Of California-Based BENLabs, Will Explain How Artificial Intelligence Can Help Unlock Creativity At LEAP 2023's DeepFest

With over 18 years of experience in digital entertainment, Butler is known to have pioneered the use of AI technology within the entertainment and media landscape.

Growth Strategies

How Saudi Organizations Can Win The Competition For Next-Generation Talent

Saudi Arabia will continue to be a jobseekers' market for many years to come, with the competition for skilled workers across various industries becoming fiercer than ever.