Middle East Private Wealth Set To Grow To 11.8trillion Dollars By 2020

Private wealth in the Middle East and Africa region is set to reach $11.8 trillion by 2020 - and the UAE, Saudi Arabia, and Kuwait's contribution will account for 22.7 percent of that total, according to a new report.

The Boston Consulting Group (BCG) said in the report that private wealth in the UAE grew by 10.2 percent in 2015, with growth expected to continue over the next five years. The report said the growth of private wealth was driven primarily by cash and deposits which increased by 16.7 percent between 2014 and 2015 across the nation, compared with 0.7 percent for bonds, and 3.8 percent for equities.

Based on BCG's study, the UAE is set to show solid growth in the next five years, with the wealth breakdown anticipated to be 19.2 percent in equities, 12.1 percent in cash and deposits, and 4.8 percent in bonds.

In terms of wealth distribution, private wealth held by ultra-high-net-worth (UHNW) households (those with above $100 million) in the UAE grew by 6.3 percent in 2015, the report said. However it added that by 2020, private wealth held by this specific segment is expected to increase by a healthy 20 percent.

Private wealth held by the upper high-net-worth (HNW) segment (those with between $20 million and $100 million) grew at a rate of 11.8 percent in 2015 and is projected to grow by 18.2 percent over the next five years.

The report also said that private wealth held by the lower HNW segment (those with between $1 million and $20 million) witnessed the highest growth in 2015, soaring by 13.6 percent in 2015 and with a projected CAGR of 16.5 percent over the next five years. 

The total number of millionaire households (those with more than $1 million in net investable assets) in the UAE went up by 8.5 percent in 2015. Looking ahead, it is set to grow by another 7.9 percent by 2020, the report added.

Global private financial wealth grew by 5.2 percent in 2015 to a total of $168 trillion, according to the report. The rise was less than a year earlier, when global wealth rose by more than 7 percent. All regions except Japan experienced slower growth than in 2014. The report said that private wealth booked in offshore centres grew by a modest 3 percent in 2015 to almost $10 trillion.

 

SOURCE : ARABIANBUSINESS

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