Dubai: Six GCC countries figured in the top 15 countries globally in the ranking of proportion of millionaire households, according to The Global Wealth 2015 report by BCG.
While Switzerland topped the list with 13.5 per cent of the total households as millionaires, Bahrain and Qatar were in second and third positions with 12.3 and 11.6 per cent share, respectively.
While Kuwait was ranked at 5th position, the UAE, Oman and Saudi Arabia were ranked at tenth, 12th and 15th positions, respectively. In the UAE, according to BCG’s estimates 3.8 per cent of total households are millionaires. The study included both the national and expatriate households.
Overall, the Middle East and Africa (MEA) region showed strong growth trends with private wealth in region increasing by more than 9 per cent to reach nearly $6 trillion (Dh22 trillion) in 2014. With a projected CAGR of 9 per cent, the region’s private wealth will rise to an estimated $9 trillion in 2019 with the UAE at $1 trillion and Saudi Arabia $2 trillion as the largest markets.
While 2014 continued to see strong double-digit equity performance in the MEA, the year was also positive for onshore bonds with double-digit performance in the region.
In addition, the MEA region had the second-highest proportion of newly created wealth at 44 per cent, with the balance of the increase in wealth attributable to the market performance of existing assets.
“Solid savings rates and continued GDP rises in oil-rich countries contributed to the newly created wealth, while existing asset performance was solid despite the region’s volatile developments,” said Markus Massi, a Partner & Managing Director at BCG Middle East. “Overall, across the region, the drivers of wealth growth will have significant implications for wealth managers in the years ahead.”
The study noted that although there has been an increase in the proportion of onshore assets, in the region a significant portion of assets are held offshore and offer opportunities for wealth managers. To capture newly-created wealth that is driven mainly by GDP growth and savings rates, wealth managers must strengthen their asset-gathering and client acquisition capabilities through differentiated offerings, tailoring them to specific regions and client segments. To maximise the performance of existing assets, the focus will be on more creative investment strategies and product offerings, also customised by region and client segment. Moreover, following the high currency fluctuations witnessed in 2014, currency exposure will be a key consideration for future investment strategies.
In the MEA region, in 2014, the share of private wealth held in equities stood at 27 per cent — amongst the highest in the world. Similarly, the share of private wealth held in bonds was also quite high at 21 per cent.
