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Subscriptions to foreign funds rebound
Subscriptions by local investors to foreign investment funds increased 26 percent in 2020 to $798 million, registering a rebound from a downtrend in recent years, according to the Annual Report of the Capital Markets Authority. Subscriptions to local funds were also going through a downtrend which continued but at a slower pace and recorded a decrease of 12 percent to $238 million last year. The number of subscribers to foreign funds jumped by 31 percent in 2020 while the number of those subscribing to local funds inched down by, Director of Capital Markets at FFA Private Bank. The pre-crisis downtrend in subscriptions resulted from the fact that investors preferred to deposit their savings in banks because they were lured by high interest rates which are less risky than foreign portfolios of which they have little knowledge, according to Barbir. The banks were competing among themselves and were offering high interest rates in order to attract deposits especially that this enables them to share in the lucrative financial engineering transactions carried out by the Central Bank, he said.
