Qatar also ranks fourth in the world by ultra-high-net-worth (UHNW) households, defined as households with more than $100mn in private wealth, with eight out of 100,000 households falling under this category, the Boston Consulting Group’s (BCG) annual global wealth management report said.
“Qatar ranks first in the world with the highest density of millionaires, with 14.3% holding private wealth of at least $1mn. Kuwait ranks third with 11.5%, while Bahrain (4.9%) and the UAE (4%) rank seventh and ninth, respectively,” said Markus Massi, partner and managing director at BCG Middle East.
The report asserts that private wealth in MEA (Middle East and Africa) will grow to an estimated $6.5trn by the end of 2017, with a projected compound annual growth rate (CAGR) of 6.2%. This increase will largely be driven by new wealth creation linked to strong gross domestic product expansion in oil-rich countries.
“The growth of private wealth in the region has been largely driven by a buoyant GCC (Gulf Co-operation Council) equity market and an improvement in the global equity markets overall. Additionally, the recovery of the local real estate markets has helped to free up additional liquidity for financial investments,” the report said.
Wealth held in equities saw strong growth in 2012, although individual markets in the Gulf region posted sharply different results.
The Dubai Financial Market index enjoyed growth of 19.9% and the Abu Dhabi Exchange improved by 9.5%, while the other GCC bourses have seen moderate growth (6% for Tadawul) or as low as 2% in the case of the Kuwait Stock Exchange,” Massi said.
Globally, private financial wealth grew by 7.8% in 2012 to a total of $135.5tn. The rise was stronger than in 2011 and 2010, when global wealth grew by 3.6% and 7.3%.
The total number of millionaire households reached 13.8mn globally in 2012, or 0.9% of all households. The US had the largest number of millionaire households (5.9mn) overall, followed by Japan (1.5mn) and China (1.3mn).
“Globally, we anticipate that the affluent segment will continue to grow their assets. Over the next five years, wealth among households worth $5mn to $100mn will grow by a projected CAGR of 8%, while the ultra-high-net-worth segment is expected to see a CAGR of 9.2%,” Massi said.
The report said offshore wealth – defined as assets booked in a country where the investor has no legal residence or tax domicile – rose 6.1% in 2012 to $8.5tn. While offshore wealth is projected to rise modestly over the next five years, reaching $11.2tn by the end of 2017, wealth is increasingly moving onshore due to the intense pressure that tax authorities are exerting on offshore centres.