Exploring the 2024 Market Outlook
It should come as no surprise that the global economy has been less than ideal over the past few years, from pandemics to rapid inflation. This can leave you wondering, “What does the market have in store for 2024?” In this article, we’ll explore market predictions in four main areas: the housing market, global equities, government bonds, and venture capital.
Housing Market
Like many other economies, the Middle East continues to face turbulent housing market conditions. Prices for real estate in Dubai alone are expected to increase by 25% and inventory is scarce, as many new development projects are still in the works. Additionally, further increases in interest rates will make it difficult for many to enter the market as homebuyers in 2024, generating overcrowding in the rental industry.
Nevertheless, Dubai and other Middle Eastern countries still have room for investors to enjoy significant returns on investment, with high demand and expanding green initiatives. Countries like the United Arab Emirates continue to position themselves as technology and infrastructure leaders, contributing to the popularity of REITs and direct investments.
Global Equities
Many major markets have already experienced declines in stock prices following the pandemic, high interest rates, and global uncertainty. With the United States still knee-deep in a mild recession, emerging markets become more attractive. Direct foreign investment in Saudi Arabia is expected to grow 3.4% by 2025, while Abu Dhabi recently announced 100 new investment opportunities to propel industrial growth.
Branching out to include emerging markets in your portfolio will be essential to maximize returns and minimize market volatility. Trends in infrastructure, digital assets, ESG initiatives, and more will be at the forefront of appealing opportunities for investors and asset managers going into 2024.
Government Bonds
Similar to equities, government bonds are another trending investment in the finance sector, especially sustainability bonds. Green, social, sustainable, and sustainable-linked bonds (GSSSB) issuance is expected to continue growing during 2024 and in the preceding years. For example, Saudi wealth fund PIF recently raised $3.5 billion in the sale of Islamic bonds.
New offerings will continue to hit the market in 2024; however, not all bonds have been successful. Dollar bonds issued by Middle Eastern sovereigns were ranked among the worst bond performers, with Dubai’s bonds being worth a mere 84 cents on the dollar. Investors and finance managers should fully evaluate the growth outlook and return on bonds before making the decision to invest.
Venture Capital
Startups in the Middle East have been excelling in 2023, with the same trends predicted to carry over to 2024. In 2023, there was a 20% year-on-year growth in late-stage venture capital funding. There are up-and-coming countries looking for market share, including The Kingdom of Saudi Arabia and Qatar. Growth in venture capital funding will continue going into 2024.
Summary
Understanding where the market is headed can help you stay on top of investment decisions and capitalize on market movements. For more market insights, tips, and tricks, check out our other blog posts at BizConnectCo.
Sources
https://www.dubaihousing-ae.com/post/dubai-property-price-forecast-2024/
https://pitchbook.com/news/articles/middle-east-venture-capital-market-map-2023
