Dubai: The GCC’s high networth individuals (HNWIs, with a minimum $2 million (Dh7,35 million) in investable assets) are much more positive about both regional and global economic conditions today, than they have been in the last three years, according to the GCC Wealth Insight Report from Emirates Investment Bank.
The GCC Wealth Insight Report 2019 is based on a survey of 100 HWNIs across the GCC, comprised of nearly 90 per cent GCC nationals and a little over 10 per cent of expatriates residing in the GCC. This year more than half of the survey participants were entrepreneurs and 64 per cent of the sample’s net worth was self-made.
Higher oil prices, at the time of the survey, and increased investment opportunities were highlighted as the main factors for optimism. Nearly half (45 per cent) of respondents believe the global economic situation is improving, and more than three quarters of HNWIs (85 per cent) are optimistic about the economic prospects for the global economy over the next five years.
The survey results showed more confidence in local and regional growth strengthening in 2019. Views of an improved economic and business environment in the GCC more than doubled among HNWIs leaping from 31 per cent to 71 per cent of respondents, with just 3 per cent instead of last year’s 41 per cent feeling that the situation is worsening.
The vast majority of HNWIs (96 per cent) surveyed are optimistic on stabilised oil prices, upcoming high-profile events, and the benefits of economic diversification and reforms to induce a robust environment for businesses.
“The size of home-grown wealth in the GCC region and the entrepreneurial culture it is known for gives the investment landscape in the region a unique characteristic. This explains the increased optimism and confidence we saw in this year’s findings, and the growing appetite among the region’s wealthy to grow their wealth instead of preserving it,” said Khalid Sifri, CEO of Emirates Investment Bank.
This positive sentiment towards opportunities within the region has prompted HNWIs to continue to keep their assets closer to home, in line with previous years, with an even further increase in wealth allocation towards their own businesses. Preference for investing locally was also prominent in this year’s report, where three quarters of HNWIs believe investment opportunities in their home markets are more lucrative than diversifying abroad.
This year’s report shows a significant increase in HNWIs’ tendency (91 per cent) to accumulate wealth, as opposed to preserving it, and yet 9 in 10 respondents categorise themselves as conservative investors.
While real estate continues to receive considerable exposure from GCC HNWIs (70 per cent), technology is emerging as a sector of interest for regional investors, with a quarter of them currently allocating wealth to technology and as many saying they will increase their exposure to this sector in the coming 12 months. Respondents cited the sector’s growing importance in the next phase of growth across multiple industries as the fundamental factor for this view.
“In addition to economic diversification plans and reforms, the approaching launch of flagship events, such as the Special Olympics World Games Abu Dhabi 2019 and Expo 2020 Dubai, is driving positive sentiment among regional investors, particularly in the UAE, which is offering incentives to investors and to high-calibre talent to partake in its transition to a knowledge-based economy,” said Sifri.