Inflation a worry for global investors CFA survey finds

Inflation was one of a number of investor concerns highlighted in the survey. (Shutterstock)

• The study found that worries about corporate debtors not being able to pay their loans have increased among UAE investors

DUBAI: Inflationary pressures are likely to persist for one to three years, according to a survey from the CFA Institute.
A large majority (65 percent) of respondents to the survey from the global investment professionals body thought that monetary policy and supply-side constraints would combine to create pricing pressures.
But they were closely split on whether inflation would cause central banks to restrict monetary policy as a result (31 percent think central banks will switch to a restrictive policy, 34 percent think not).
“Across markets, we are clearly seeing signs of a multi speed recovery together with inflationary pressures, a potential for monetary stimulus addiction, tax hikes, emerging regulatory risks, and questions over the actual financial health of corporates,” said Olivier Fines, the CFA regional head of advocacy.”
Inflation was one of a number of investor concerns highlighted in the survey, which also included responses from the Gulf-based investment professionals.
It found that worries about corporate debtors not being able to pay their loans have increased among UAE investors.
The UAE led the list of countries where this concern was particularly high, at 89 percent, the report, which analyzed the impact of COVID-19 on financial markets, said.
“Emerging economies show more concern in general over credit default risk in the short term than advanced economies,” it said, listing South Africa, India, and Brazil along with the UAE.
But this concern was also observed globally, the report showed, with a majority of 56 percent saying credit default risk has increased in the short term.