One out of every 25 of your UAE neighbours is a millionaire

The UAE has the world’s ninth highest density of millionaires in the world, the Boston Consulting Group (BCG) has said in a new report, with one out of every 25 households in the country dollar millionaires.

The UAE’s GCC peer Qatar has the world’s highest density of millionaires, where 143 out of every 1,000 households had private wealth of at least $1 million, followed by Switzerland (116), Kuwait (115), Hong Kong (94), and Singapore (82).

In the UAE, 40 out of every 1,000 households boast of private wealth of at least $1 million, according to the report.

In Maintaining Momentum in a Complex World: Global Wealth 2013, its thirteenth annual study of the global wealth-management industry, BCG addresses the current size of the market, the performance levels of leading institutions, and the state of offshore banking. The report also provides a thorough analysis of the key trends shaping the business landscape.

In addition, the UAE also features among the world’s Top 15 multi-millionaire households, with three out of every 100,000 households in the country being ultra-wealthy, or with investible wealth of more than $100 million.

In fact, five GCC countries (excluding Saudi Arabia) feature among the list of countries with densest millionaire populations: Qatar (14.3 per cent of all households are millionaires), Kuwait (11.5 per cent), Bahrain (4.9 per cent), the UAE (4 per cent) and Oman (3.3 per cent).

“Qatar ranks first in the world with the highest density of millionaires, with 14.3 percent holding private wealth of at least $1 million. Kuwait ranks third with 11.5 per cent, while Bahrain (4.9 per cent) and the United Arab Emirates (4 per cent) ranks seventh and ninth, respectively,” said Markus Massi, Partner and Managing Director at BCG Middle East.

The report asserts that private wealth in MEA will grow to an estimated $6.5 trillion by the end of 2017, with a projected CAGR of 6.2 percent. This increase will largely be driven by new wealth creation linked to strong GDP expansion in oil-rich countries. 

“The growth of private wealth in the region has been largely driven by a buoyant GCC equity market and an improvement in the global equity markets overall. Additionally, the recovery of the local real estate markets has helped to free up additional liquidity for financial investments. Wealth held in equities saw strong growth in 2012, although individual markets in the GCC region posted sharply different results. The Dubai Financial Market Index enjoyed growth of 19.9 per cent and the Abu Dhabi Exchange improved by 9.5 per cent, while other GCC exchanges have seen moderate growth (6 per cent for Tadawul) or as low as 2 per cent in the case of the Kuwait Stock Exchange,” Massi added. 

The Middle East also ranks highly by ultra-high-net-worth households, defined as households with more than $100 million in private wealth. Qatar ranks fourth in the world, with 8 out of 100,000 households falling into this category. Kuwait ranks seventh and UAE comes in fifteenth with 7 and 3 households per 100,000 in this segment, respectively.

Globally, private financial wealth grew by 7.8 percent in 2012 to a total of $135.5 trillion. The rise was stronger than in 2011 and 2010, when global wealth grew by 3.6 percent and 7.3 percent.

While the US had the largest number of billionaires in 2012, the highest density of billionaire households was in Hong Kong (15.1 per million), followed by Switzerland (9.4 per million).

More broadly, the wealthy will continue to get wealthier globally, the report highlights.

The total number of millionaire households reached 13.8 million globally in 2012, or 0.9 per cent of all households. The US had the largest number of millionaire households (5.9 million), followed by Japan (1.5 million) and China (1.3 million). China should surpass Japan in 2013, the report reckons.

India features among the world’s top 15 millionaire households, with 164,000 households laying stake to that claim, bit with a population of more than 1.3 billion, it is nowhere to be seen in the list of countries with the densest millionaire population.

In the Middle East and Africa (MEA) region, the report highlights that, despite the Arab Spring and tensions in Syria, private wealth grew by 9.1 per cent to reach $4.8 trillion in 2012.

Wealth held in equities in the MEA region grew by 18.3 per cent (although significant country differences existed), compared with increases of 9.2 per cent in bonds and 5.2 per cent in cash and deposits. Equity markets in the region posted sharply different results: for example, the Moroccan equity index fell by 15.1 per cent, while the Egyptian equity market rebounded by 50.8 per cent.

With a projected CAGR of 6.2 per cent, private wealth in the MEA will grow to an estimated $6.5 trillion by the end of 2017, with most of the increase coming from new wealth creation linked to strong GDP expansion in oil-rich countries.

According to the BCG report, global private financial wealth grew by 7.8 per cent in 2012 to reach a total of $135.5 trillion. The rise was stronger than in either 2011 or 2010, when global wealth grew by 3.6 and 7.3 per cent, respectively.

The growth of private wealth varied considerably by region in 2012, as in previous years, once again highlighting the differences in how the year’s economic forces affected the traditional, mature economies of the ‘old world’ and the rapidly developing economies of the ‘new world.’

Wealth increased measurably in the old-world regions of North America, Western Europe, and Japan, while stronger, double-digit growth characterized the new-world regions of Asia-Pacific (excluding Japan), Eastern Europe, and Latin America. Wealth in the Middle East and Africa (MEA) saw near-double-digit growth.

Overall, private wealth grew by 5.9 per cent in the old world in 2012 (representing just over half of the total increase in global wealth), compared with 12.9 per cent growth in the new world. In terms of newly created wealth – stemming primarily from rises in gross domestic product (GDP), income, and savings rather than from returns on existing wealth – the old world accounted for roughly one-third of the increase in global wealth, with the new world accounting for roughly two-thirds.

North America and Western Europe remained the wealthiest regions in 2012, with total private wealth of $43.3 trillion and $35.8 trillion, respectively. Asia-Pacific (excluding Japan) was the third-largest market, with wealth of $28 trillion. Growth in overall wealth in 2012 amounted to nearly $10 trillion, from $125.7 trillion in 2011 to $135.5 trillion in 2012.

 

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