Khaled Sifri, CEO of Emirates Investment Bank (Supplied photo)
Dubai - High Net-Worth Individuals (HNWIs) in the GCC believe that the current global and regional economy is improving or staying the same, attributing their optimism to the perceived recovery from previous economic crises and increased political stability, said a new study released on Tuesday.
They also expect the positive global and regional economic trajectory to continue over the next five years.
HNWIs are defined as individuals with US$2 million or more in investable assets. Interviews for the survey were conducted between October and December 2017.
According to the survey by Emirates Investment Bank, positive economic sentiment in the GCC region has coincided with an uptick in preference for keeping assets closer to home and investing in GCC assets.
Confidence in the GCC's economic stability, together with the recognition of external risks, has prompted GCC HNWIs to mitigate risk and increase their exposure to regional markets.
This confidence in the regional economy is evident in HNWIs' strong endorsement for the GCC, and the UAE in particular, as an attractive wealth management location for HNWIs from the region and from the rest of the world.
They point to the UAE's tax efficient system and sustainable economic model as the main reasons they choose the UAE as a wealth management destination.
Alongside the optimism and positive outlook seen in this year's survey, the 2018 EIB report indicates that HNWIs are still somewhat cautious about the uncertainty in the economic and political environments. This is evident in the increase in HNWIs concerned with preserving wealth, as over a third say their priority now is to preserve wealth rather than pursuing a strategy of growing wealth, a notable increase from 2017.
It said the percentage of those focused on growing their wealth has dropped to less than two thirds of respondents, bringing wealth accumulation to a five-year low.
The distribution of HNWIs' wealth is broadly similar to previous years, with investing in their own business remaining the top choice. However, there does appear to be an uptick in allocation to real estate and a slight shift away from cash in comparison to last year.
Commenting on the Report, Khaled Sifri, CEO of Emirates Investment Bank, said, "2017 was certainly a surprising year. The global economy's strong performance has given HNWIs in the GCC a greater sense of optimism, both in the global and the GCC economy. Factors like the GCC's stability, attractive investment opportunities and the low-tax environment are seen as the main drivers behind the growing confidence in the region's economy, and the increased preference for investing in Gulf assets. This confidence was also evidenced by the strong appeal for the GCC, and the UAE in particular, as an attractive location for wealth management."