Thursday, June 23, 2011

UAE loses 13,500 millionaires to recession: Wealth report

The number of UAE’s high net worth individuals (those with $1 million or more in financial assets, not including the house in which they live) declined by 3.5 per cent to 52,600 in 2010, on top of an 18.8 per cent decline in 2009, according to the 15th annual World Wealth Report, released yesterday by Merrill Lynch Global Wealth Management and Capgemini.
The population of UAE millionaires fell from over 66,000 in 2008 due to a decline in the market capitalization of firms listed on the stock markets, coupled with the falling values of property in the country, which saw 1,900 UAE millionaires lose the coveted status in 2010 along with over 11,600 less millionaires in 2009, taking the total tally of UAE individuals losing the 'millionaire' status to more than 13,500 in two years since the onset of the global economic slowdown.
Elsewhere in the region, the number of millionaires in Saudi Arabia and Bahrain grew in 2010. Saudi Arabia had 113,300 millionaires in 2010, an increase of 8.2 per cent from 2009. In Bahrain, there were 6,700 millionaires in 2010, up 24 per cent from 2009.
Overall, the number of world’s high net worth individuals and the wealth they possess expanded in 2010, surpassing 2007 pre-crisis levels in nearly every region.
The Middle East had the second highest global growth rate in the number of millionaires, after Africa, with the number of regional rich rising by 10.4 per cent to 440,000, the report said, adding that the combined wealth of regional millionaires increased by 12.5 per cent to $1.7 trillion in 2010.
Globally, the number of millionaires grew 8.3 per cent in 2010 to 10.9 million, and their wealth increased by 9.7 per cent to reach $42.7 trillion (compared with growth rates of 17.1 and 18.9 per cent, respectively, in 2009). The global population of ultra-rich (those with more than $30 million in financial wealth), grew by 10.2 per cent in 2010 and their wealth by 11.5 per cent.
“The past few years have seen great fluctuations in [the millionaires’] wealth and population,” said Tamer Rashad, Head of Middle East, Merrill Lynch Wealth Management. “In 2010, we saw growth rates slow down from the higher double-digit levels of 2009 when many markets were quickly returning from significant crisis-related losses.”
The global millionaire population remained highly concentrated in the US, Japan and Germany, which together accounted for 53 per cent of the world’s millionaires. The US is still home to the single largest rich individuals segment in the world, with its 3.1 million millionaires accounting for 28.6 per cent of the global millionaire population.
“While over half of the global [millionaire] population still resides in the top three countries, the concentration of [millionaires] is fragmenting very gradually over time,” said Karthikeyan Rajendran, Sales Director, Middle East, Global Financial Services, Capgemini.
“The concentration of [millionaires] among these areas will continue to erode if the [millionaire] populations of emerging and developing markets continue to grow faster than those of developed markets,” said Rajendran.
Asia-Pacific beats Europe for the first time
Asia-Pacific posted the strongest regional rate of millionaire population growth in 2010 among the top three markets. While millionaire wealth had already overtaken Europe in 2009, Asia-Pacific has now surpassed Europe in terms of millionaire population, expanding 9.7 per cent to 3.3 million, while Europe grew 6.3 per cent to 3.1 million.
Asia-Pacific millionaires’ wealth gained 12.1 per cent to $10.8 trillion, exceeding European millionaires’ wealth of $10.2 trillion, an increase was 7.2 per cent in 2010. Asia-Pacific is now the second largest region for both millionaire wealth and population, second only to North America.
Also of note in the Asia-Pacific region, India’s millionaire population became the world’s twelfth largest in 2010, entering the top 12 for the first time.