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South African investors are very optimistic about their economy but worry about the rand's value and national debt levels, new UBS survey finds

06 August 2019 UBS

In South Africa, 71 percent of high net worth individuals and business owners take an optimistic stance on the state of their economy, according to UBS Global Wealth Management's new quarterly Investor Sentiment survey. Similarly, three quarters of South African investors are bullish on regional stocks.

By comparison, investors globally expressed lower levels of optimism on their domestic economies and stock markets. Fifty-nine percent were optimistic on the domestic economy in the most recent quarter, and 55 percent expressed bullish views on local stocks.

Nevertheless, South African investors remained reluctant to put money to work in the market, holding 23 percent of their assets in cash on average. UBS Global Wealth Management's Chief Investment Office recommends investors continue to put money to work in a diversified portfolio, holding a positive overall stance on stocks for the rest of 2019.

The survey, which polled more than 3,800 wealthy investors and entrepreneurs in 17 countries, shows South African investors rank the value of the South African rand as their top concern, with over two thirds of respondents seeing it as a major worry. Similarly high levels of concern were expressed for national debt levels and the country's politics.

Ali Janoudi, Head of Central and Eastern Europe, Middle East and Africa at UBS Global Wealth Management, said: "According to our survey, most South African investors have a favorable view of their economy and local stocks, but interestingly seem reluctant to stay invested and put their money to work, preferring instead to hold too much cash.

Amongst global investors, the current trade war was one of the most prevalent top concerns, as cited by 46% of respondents – up 7 percentage points quarter over quarter – on par with local politics, also cited by 46% of respondents. Cyber security was the third most common worry with 43 percent.

About the survey

UBS surveyed 3,899 investors and business owners with at least $1M in investable assets (for investors) or at least $250k in annual revenue and at least one employee other than themselves (for business owners), from June 3 - July 6, 2019. The global sample was split across Brazil, China, Germany, Hong Kong, Indonesia, Italy, Japan, Malaysia, Mexico, Philippines, Singapore, Switzerland, Taiwan, Thailand, the UAE, the UK, and the US.

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