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GCC asset managers forecast surge in AUM on higher oil prices – Moody's

GCC asset managers forecast surge in AUM on higher oil prices – Moody's
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Mubasher: Asset managers in the Gulf region expected that higher oil prices would boost their assets under management (AUM) and attract larger fund inflows, according to Moody's 2022 survey of chief investment officers (CIOs) from eight GCC fund firms.

In spite of the global market downturn, respondents to the survey were bullish towards the forecast AUM levels as high oil prices would support the value of their portfolios and attract net new cash inflows. This will also help in facing the adverse effect of fickle markets, higher inflation, and rising interest rates.

Meanwhile, two-thirds of respondents expected a moderate increase in fee income, while another 25% believed the hike would be significant. Furthermore, about 75% of respondents predicted that costs would rise, and around 62% projected at least a modest surge in competitive pressure.

Alexandra Aspioti, VP-Senior Analyst at Moody's Investors Service, noted: "This will support fee revenues, although the sector also faces headwinds from more volatile markets, higher inflation, and rising interest rates."

Aspioti indicated: "Respondents expect continued strong demand for Sharia-compliant investments, but foresee more moderate growth in investments that meet environmental social and governance [ESG] criteria."