Life is tough....
UAE has 68,100 millionaires
By Shakir Husain, Staff Reporter
Published: June 27, 2007, 23:33
archive.gulfnews.com
Dubai: A booming economy and high oil revenues helped create 9,100 new millionaires in the UAE last year, taking their total to 68,100, according to a global study on wealthy individuals.
But wealth creation in the country was tempered by a downturn in stocks as the markets plunged 57.3 per cent in 2006.
Globally, the number of high net worth individuals (HNWIs) - people possessing $1 million or more in investible assets - rose 8.3 per cent in 2006 to 9.5 million. The number of ultra-high net worth individuals - those with more than $30 million in liquid assets - grew by 11.3 per cent to 94,970.
The wealth of the world's rich increased 11.4 per cent to $37.2 trillion last year, according to the World Wealth Report, released by global asset management group Merrill Lynch and consultancy firm Capgemini yesterday.
"Real gross domestic product and market capitalisation growth rates accelerated through 2006, which helped to increase the total number of HNWIs around the world as well as the amount of wealth they control," Merrill Lynch said.
Seventy-one countries were covered in the annual study, which provided detailed analysis of the UAE and Saudi Arabia.
Saudi millionaires grew 11.8 per cent to 89,600, similar to the global average, but lower than the UAE's 15.4 per cent growth. While rising oil incomes and high public spending boosted wealth, a Saudi stock market slump of 49.4 per cent inhibited more people from becoming millionaires.
The report found that the rich around the world are diversifying their investments. It noted a decline in investments in alternative assets like hedge funds, private equity, derivatives and commodities, while more money went to real estate.
Global direct real estate transaction volumes reached $682 billion last year, 38 per cent more than 2005.
Investors are also seen shifting their investments away from the US by allocating more funds for European and Asian assets.
Investment by the rich in North America dropped one per cent to 43 per cent last year and is predicted to fall to 40 per cent in 2008. The Middle East, Europe and Asia are seen gaining more investor confidence.
The number of millionaires worldwide is forecast to rise by an annual average of 6.8 per cent until 2011.
"The Middle East will see the highest percentage change in wealth generation," said Imad Al Aawar, Merrill's resident executive director for the region.
Emerging economies saw continued growth in their millionaire populations and received strong investor cash flows.
The largest growth occurred in Singapore and India, where the increase over 2005 was 21.2 and 20.5 per cent, respectively. China's wealthy grew by 7.8 per cent and Russia's increased by 15.5 per cent.
Jonty Crosse, a resident director for Merrill in the Middle East, said wealth management firms should change their "cookie-cutter approach of one size fits all" and work on new products aimed at special investor groups like non-resident Indians and those looking for Sharia investments.
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