Dubai: The number of high networth individuals (HNWIs) from the Middle East and their total wealth surged last year, reporting the second highest growth rate in the world, according to the latest World Wealth Report published by Merrill Lynch and Capgemini.
The combined wealth of HNWI and ultra-HNWIs (individuals with more than $30 million [Dh110 million] assets) increased 12.5 per cent last year to $1.7 trillion.
In 2010, the Middle East had one of the highest growth rates after Africa, with the number of HNWIs with more than $1 million in wealth rising by 10.4 per cent to 440,000.
At the end of 2010, the number of HNWIs grew in Saudi Arabia and Bahrain but declined marginally in the UAE. In Bahrain, there were 6,700 HNWIs in 2010, up 24.0 per cent from 2009. Kuwait had the highest global growth rate of 25 per cent.
The decline in the number of wealthy in the country is attributed to relatively lower economic growth and depressed valuations of key asset classes such as equities and real estate.
"The UAE's real GDP expanded 2.1 per cent against a global average of 3.9 per cent in 2010. Market capitalisation witnessed a drop of 3.9 per cent in the UAE last year bringing down the wealth of many," said Tamer Rashad, Head of Middle East, Merrill Lynch Wealth Management.
The report said that the world's HNWIs expanded in population and wealth in 2010, surpassing 2007 pre-crisis levels in nearly every region. Global HNWI population and wealth growth reached more stable levels in 2010, with the population of HNWIs increasing 8.3 per cent to 10.9 million and HNWI financial wealth growing 9.7 per cent to reach $42.7 trillion.
While the Asia Pacific region's HNWI wealth had already overtaken Europe in 2009, the region has now surpassed Europe in terms of HNWI population, expanding 9.7 per cent to 3.3 million, while Europe grew 6.3 per cent to 3.1 million.
Karthikeyan Rajendran, Sales Director, Middle East, Global Financial Services, Capgemini noted that the concentration of wealth is moving from developed to emerging markets.