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UAE ranks 12th in millionaire density in the world

Issac John
Filed on June 19, 2014
UAE ranks 12th in millionaire density in the world

According to the report, global private financial wealth grew by 14.6 per cent in 2013 to reach a total of $152 trillion.

The UAE has the world’s 12th highest density of millionaires with 33 out of every 1,000 households holding private wealth of at least $1 million, according to The Boston Consulting Group’s (BCG) 14th annual global wealth management report.

Qatar ranks first in the world with the highest density of millionaires with 175 households out of every 1000, boast millionaires. And general levels of wealth in the country are also impressive — robust wealth creation over the past years has led to a quantitative rise in millionaire households from 14.3 per cent in 2012, to 17.5 per cent in 2013. This rapid increase places Qatar first in the world in terms of millionaire households per 1,000.

UAE ranks 12th in millionaire density in the world (/assets/oldimages/lop_0617.jpg)Kuwait is fifth with nine per cent, or 90 households out of every 1,000 millionaires. Bahrain with 5.9 per cent millionaire density secured the sixth place. Oman and Saudi Arabia rank 10th and 13th, respectively.

Qatar also ranks sixth globally by ultra-high-net-worth (UHNW) households, defined as households with more than $100 million in private wealth. Kuwait, in turn, is in seventh place while Bahrain holds the 16th spot.

According to a report commissioned by the BCG, global levels of private financial wealth grew 14.6 per cent from $132.7 trillion in 2012, to $152 trillion in 2013. The report observes that the outlook for private wealth is extremely positive, and that those who already possess high levels of wealth will continue to get wealthier.

The study shows that Switzerland comes second, with 12.7 per cent of households having millionaires, and Singapore third, with 10 per cent. The USA comes seventh, with a proportional rating of 5.7 per cent millionaire households — though it ranks top in terms of the overall number of millionaire households, with 7.1 million.

On a regional level, the report ‘Riding a wave of growth: Global wealth 2014’ reveals that private financial wealth grew by 11.6 per cent to reach $5.2 trillion in 2013. Key drivers were generally high savingrates and continued strong nominal GDP growth in oil-rich countries, such as Saudi Arabia (13.4 per cent), Kuwait (13.6 per cent) and the UAE (12.8 per cent).

“As in all other regions, equities were the strongest contributor,” said Markus Massi, partner and managing director, The Boston Consulting Group.

“The amount of wealth held in equities rose by 30.5 per cent across major MEA markets, compared with 6.4 per cent for bonds and 5.7 percent for cash and deposits. With a projected CAGR of 6.5 per cent, private wealth in the region will reach an estimated 7.2 trillion by the end of 2018, approximately a 3.6 per cent share of total global wealth.”

According to the report,global private financial wealth grew by 14.6 per cent in 2013 to reach a total of $152 trillion.

The rise was stronger than in 2012, when global wealth grew by 8.7 per cent. The key drivers, for the second consecutive year, were the performance of equity markets and the creation of new wealth in rapidly developing economies (RDEs).

The total number of millionaire householdsreached 16.3 million in 2013, up strongly from 13.7 million in 2012 and representing 1.1 per cent of all households globally. The US had the highest number of millionaire households (7.1 million), as well as the highest number of new millionaires (1.1 million). Robust wealth creation in China was reflected by its rise in millionaire households from 1.5 million in 2012 to 2.4 million in 2013. The number of millionaire households in Japan fell from 1.5 million to 1.2 million, driven by the 15 per cent fall in the yen against the dollar.

“The growth of private wealth accelerated across most regions in 2013, although it varied widely by market,” said Massi. “As in 2012, the Asia-Pacific region — excluding Japan — represented the fastest-growing region worldwide, continuing the trend of high growth in the ‘new world’. But substantial double-digit growth increases in private wealth were also witnessed in the traditional, mature economies of the ‘old world’, particularly North America.”

Private wealth booked across borders reached $8.9 trillion in 2013, an increase of 10.4 per cent over 2012 but below the increase in total global private wealth of 14.6 percent. As a result, the share of offshore wealth declined slightly from 6.1 per cent to 5.9 per cent. Offshore wealth is projected to grow at a solid CAGR of 6.8 per cent to reach $12.4 trillion by the end of 2018, driven especially by investors in developing economies seeking higher levels of political and financial stability, greater depth in wealth management products and expertise, and geographic diversification.

— issacjohn@khaleejtimes.com

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